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México
Julieta Dorantes
Maria Porto
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Agenda.
Mexico: General information about the country.
Mexican Industry: quick review.
Industrial Policy: what are we doing.
Conclusion: study case.
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Location.
North-America North: USA South: Guatemala
& Belize East: Atlantic
Ocean West: Pacific
Ocean
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Characteristics.
• 1,973,000 km2
•Population: 97,014,867
Urban: 72,406,270
Rural: 24,608,597
•Official language: Spanish
•Religion: 89% catholic
•Currency: Mexican peso
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Political characteristics.
Representative & Federal Republic
Executive Legislative Juridical
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Macroeconomic indicators.
GDP: US $617.8 billion.
GDP per head: US $6, 368
Growth: 0.2 % (2002)
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Income distribution.
0%
10%
20%
30%
40%
50%
60%
70%
GINI coefficient
Eslovac Republic
Belaruss
Sweden
Ukrania
Poland
Germany
France
USA
China
Malaysia
Rusia
México
Ginea-Bissau
Kenya
Brazil
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Other indicators.
Inflation rate: 6.5% Unemployment: 2.46% Minimum wage: US $3 per day!!! Gross external debt:
11.8% Exchange rate: free- floatation
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Industry.
• Geographic distribution.
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Firm’s sizes according to sectors.
SECTOR MICRO SMALL MEDIUM BIG TOTAL
Agriculture & livestock 410 192 52 11 665
Mining 153 42 36 33 264
ManufactureTextil industry 28,403 10,116 5,295 2,484 46,298
Construction 11,403 3,271 672 108 15,454
Total 40,369 13,621 6,055 2,636 62,681
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Micro & Small firms.
0%
10%20%30%40%50%60%
70%80%90%
100%
Agriculture &livestock
Mining Manufacture Construction
BIG
MEDIUM
SMALL
MICRO
90% of the total established firms
42% of the GDP
64% of the employment
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Industrial Policy.
Human capitaldevelopment
Financing & taxation system
Regional integration
Technological change
Internationalization
Goal: Highest competitiveness, close the gap among Mexico and it’s international partners.
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Financing & taxation system.
Banking as a development instrument.
Credit support & technical assistance.
Development of secondary stock market.
Create venture capital as an alternative financing source.
Elimination of imports taxes. Reduction of sales tax.
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Human Capital development.
CONTIGO:
Social strategy. Goals: eradicate poverty
complete development of every single Mexican
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Technological change.
Soft and hard technology investment
Skilled labor force
Imitation of successful international enterprises
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Regional integration.
Incorporation of “productive chains”
Comparative & competitive advantages
Regional consolidation
Competitiveness & Internal market development
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Internationalization.
Mexico: an open economy
Strategic international alliances
NAFTA APEC
A perfect business partner:
Low –cost competitive inputs
Preferential access to world-wide markets
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Trade.
0 10 20 30 40
1
Imports (billion US$)
Taiwan
South Korea
China
Canada
Germany
Japan
USA
•Imports: US $168.3 •Exports: US $ 159.2
0 50 100
1
Exports (Billion US$)
Brazil
Venezuela
UK
Spain
Germany
Canada
USA
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Exporting sectors.
Exports:
1. Oil & mining
2. Agriculture
3. Manufactures:
Automobiles
Electronics
Household appliances
Textiles
1982 EXPORTS
6%
24%
70%
AGRICULTURE
MANUFACTURES
OIL & MINING
2001 EXPORTS
3%
89%
8%
AGRICULTURE
MANUFACTURES
OIL & MINING
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Network of free trade.
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NAFTA.
USA, Canada & Mexico Long-term agreement
1994 signed up - 2004 tariffs will be face out
10 years to create infrastructure for a “fair competence”
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APEC.
21 members 2.5 billion people 47% of world trade 70% of global
economic growth
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Conclusion Study case: Small textile firms.
35 years of specific targeting
Stimulate import of technology: by reducing import taxes.
Capital and input financial support.
Simplification of administrative affairs.
Results:
Export growth rate: 20.3%
92% of manufacture goods exports
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Industrial Policy.
Human capitaldevelopment
Financing & taxation system
Regional integration
Technological change
Internationalization
Goal: Highest competitiveness, close the gap among Mexico and it’s international partners.
Thank you.