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21st-Century Challenges
A sense of optimism is sweeping Mexico, a country that is eager to showcase the opportunities it offers investors and is busy preparing its next generation of entrepreneurs and leaders.
Alberto Saavedra, a partner with law firm Santamarina y Steta, is optimistic about the outlook for Mexico. After 30 years of reform and opening up to international trade, the country is now in the enviable position of having excess capital that it is looking to invest across the region. With much
in common with its neighbors to the south, and extensive integration with the market to the north, Mexico is poised to forge ahead.
EMBRACING THE WORLD
Saavedra acknowledges that, 30 years ago, the Mexican economy “did not participate in the world. Mexico was
not so relevant in the world, and the world was not very relevant in Mexico.” The country was overly dependent
on crude oil exports and burdened with public sector companies, many of them highly inefficient. All of that changed in the 1980s. Starting with membership in the GATT (General Agreement on Tariffs and Trade) and culminating in NAFTA (North American Free Trade Agreement), Presidents Don Miguel de la Madrid (1982–88) and Carlos Salinas de Gortari (1988–94) brought Mexico into full participation in world trade.
As a result, Mexico today is a more mature economy, enjoying trade agreements with all of Western Europe, North and South America, and parts of Asia. If the TPP (Trans-Pacific Partnership) comes about, Mexico will have access to an even greater number of rapidly growing markets.
WALKING TOGETHER ...
The most important economic relationship is, of course,
the one with the United States, with billions of dollars’ worth of goods and services flowing between the two countries. Just as important, however, are the experiences that the two countries increasingly share, the result of a convergence of geography and history. Aside from the many Mexican-Americans on both sides of the border, there are more than one million U.S. citizens now living in Mexico. As Saavedra puts it, “these two countries are already walking together.”
... SAFEGUARDS INVESTORS
These ties have had a notable impact on Mexico, helping to make it a more diversified country, and one with a range of rules, treaties, and legal provisions that protect the rights of investors. The result has been that investors in Mexico are an integral part of the North American market, the region that leads the world in innovation, technology, and learning. Together, the rule of law and an independent judiciary reassure investors and underpin the democratic aspects of Mexico’s economic growth. “All the advances that
ALBERTO SAAVEDRA
Partner Santamarina y Steta
have occurred have been based on a process of negotiation and democratic consensus.”
While Mexico does have a very visible problem in its fight with the big drug cartels, the fact that these issues are being openly discussed in the press is a sign of the extent to which civil society has matured. And, it is important to keep a sense of perspective: “The reality is that 97 percent of this country lives in peace, with crime rates lower than those in very important U.S. cities.”
Mexico is, in many ways, still a third-world country, which means there is plenty of investment opportunity in most sectors of the economy, particularly the development of infrastructure, housing, and energy. “In the next five years, we are going to have a process of re-industrialization in Mexico ... I cannot think of a sector where there is not an opportunity to invest.” Saavedra puts out a call to entrepreneurs: “Their task is to invest, generate jobs and wealth, strengthen the economic process and invest in innovation, technology, knowledge.”
TEACHING FOR THE FUTURE
For Mexico to continue its rapid development, says Saavedra, three things are paramount: continuing to push on with education reform, remaining a democratic society, and maintaining the nation’s close economic ties with the rest of the world. With these priorities, the government can continue to strengthen the rule of law, work on education, and improve public services.
Above all, it is educational reform, “the empress of reforms,” that will leave Mexico and its people fully prepared to meet the challenges of the 21st-century
world. Teachers, parents, and the government must work together in “this extraordinary achievement that will be the great transformation of Mexico.” As Saavedra says, the generation that will benefit the most from these reforms and graduate in 20 years is the generation that is going to save the planet. “I hope I live long enough to see it!”
“The country has been progressing in a very accelerated way. What other countries have done in centuries or in decades is being achieved in much less time in Mexico.”
INTERVIEW: SANTAMARINA Y STETA
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