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Competition and Caveats— Where Does Mexico Rank?
Mexico has emerged as a highly competitive market, with rankings improving on a global scale while maintaining a prime spot near the top of the Latin American market. Amicable trade agreements and increased market competi- tion are bolstering the country’s position.
“Mexico’s institutions are improving,” says Adriana Lobo, the CEO of World Resources Institute México. She cites more transparency and less corruption, as well as growing, thriving, and safer cities. “I see lots of positive
movement in general, and I am very optimistic in terms of the changes we need to make.” Indeed, Mexico is emerging as a popular option in the global marketplace thanks to stream- lined requirements for establishing businesses, international trade agreements that emphasize legal certainty for all par- ties, and a healthy position in the global marketplace.
Miguel Treviño, the Director of strategic intelligence and risk control company RISKOP, concurs. “This is not a unique phenomenon—when a country achieves greater transparen- cy, the awareness of corruption increases, too, because people start to find out about it.” Treviño believes that constitution- ally chartered institutions will introduce anti-corruption is- sues to elections in Mexico all the way down to the local level, making the entire country more competitive.
THE NUMBERS
One reason Mexico is alluring to foreign investors is its rela- tively minimal requirements for business operations. It ranks well in number of procedures for starting a business, better
What makes Mexico competitive?
LOCATION! LOCATION!
LOCATION!
SPECIAL INSIGHT: COMPETITIVE ADVANTAGE
“It seems to me that Mexico is in a situation of compara- tive advantage. For example, if we compare our economy with those in Europe, they are still going to have sever- al years of uncertainty, with smaller growth and fewer prospects for young people.” —Manuel Galicia R., Found- ing Partner, Galicia Abogados
than China, India, or Brazil; and in days need- ed for starting a busi- ness, ahead of Germany, India, China, and Brazil. Especially high are its rankings in number of procedures and number of days needed for ob- taining a construction permit, ahead of much of the world. Creditors recover their credit at a high rate and in a rela- tively short time.
From a geographic perspective, Mexico is ideally situated to key markets around the world via major ports on
involves signed free trade agreements (FTAs) and economic partnership agreements (EPAs) with 46 countries, the most of any nation in the world. These agreements, plus numer- ous smaller pacts, together afford Mexico and its investors preferred access to robust markets throughout the world and provide healthy intellectual property protection, clear legal frameworks, favorable tariff policies, and fair competition.
POSITIONED FOR PROMINENCE ...
Mexico ranks 51 out of 138 on the World Economic Forum’s (WEF) Global Competitiveness Index—up from the previous year’s position at number 57. The organization cites market efficiency gains as the driving force behind Mexico’s improved position. The nation is also fortunate in its demographics; 45 percent of the population is under 25 years of age and ready and eager to enter the work force in the coming years. “We must orient our society to take the best advantage of our young people,” says Jorge Eduardo Familiar, the President of CEMEFI, a nonprofit organization that promotes civic partic- ipation throughout Mexico.
... BUT CAVEATS REMAIN
Mexico still lags behind the world in primary education and quality of institutions. In the WEF’s Executive Opinion Sur- vey, corruption ranked as the most problematic factor for do- ing business, according to 22.5 percent of respondents. The next two factors, crime and theft and inefficient government bureaucracy, scored 12.7 and 12.1 percent, respectively. In the same survey, however, government instability, public health, and work ethic all got good marks, with only 3.2 percent of respondents collectively naming those issues as problems.
Says Jaime Acosta, the CEO of BLN Spirits and Wines, “The Mexican entrepreneur has to invest more in training and tech- nology.” As this process takes place, investors and entrepre- neurs can expect higher wages and a better standard of living, as well as sophisticated and innovative business processes as Mexico makes the transition from an efficiency-driven econo- my to one powered by innovation.
both the Atlantic and Pacific Oceans. Ongoing port upgrades make shipping to and from Mexico even more convenient.
TRADING UP
Ultimately, Mexico is angling for full access to a market boast- ing more than one billion consumers, representing 60 percent of the world’s GDP. Prioritizing market diversification has been paramount for Mexico in reaching this goal. Its strategy
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The Mexico News
Foreign Investors buy into the Competitive Advantage
Investment
Needed
Training & Tech We can access
Markets of more than 1 billion
consumers.