WEF Competitivness ASA


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Monitoring the World Economy,Economic Outlook

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  • Por otra parte, el nivel de consumo de los hogares es muy superior en México en comparación con las economías BRIC y, de acuerdo a BCG, las perspectivas de crecimiento de la clase media es similar al de las economías BRIC y otras economías emergentes.
  • The GBPC often uses the metaphor of the global economy as a car engine, and three of the main cylinders —the United States, Europe and Japan—are not firing properly. They may not fully recover for some years, while China and India continue to fire strongly.
    Other emergent economies could help boost world growth. Brazil, Russia, India and Mexico had a combined GDP in 2009 of $4.9 trillion (roughly the equivalent of China's), but each of these countries faces challenges that are likely to restrain growth.
    A number of medium-sized and smaller economies, including South Korea, Turkey, Indonesia, Australia, Taiwan, Thailand, Chile and Malaysia, are growing healthily, and with the exception of South Korea have a demographic profile that promises many years of growth to come.
    Source: The great globalization shakeout. Martin Walker. AT Kearney
  • En varios informes de Goldman Sachs, se ha considerado que México es uno de los pocos países que pueden considerarse un rival potencial de las economías BRIC en los próximos 40 años.
    En un informe realizado por Goldman Sachs en 2007 se estimó que México podría convertirse en una de las cinco principales economías en el mundo, solo por detrás de China, EEUU, India y Brasil. Si bien en un informe similar realizado en 2008 la perspectiva se ajusto a la baja, la notable recuperación mostrada en los últimos meses han renovado el entusiasmo de los analistas respecto al potencial del país.
  • Since September of 2009, the Federal Government started a profound and historic Regulatory Reform.
    The goal is to reduce business transaction costs:
    We have eliminated almost 16 thousand internal norms in all the Federal Public Administration (that is almost 50% of the total) and more than 2 thousand procedures. Cutting that way red tape.
    Mexican Government implemented the web site www.tuempresa.gob.mx, to reduce 65% the costs to open a business according to the OECD and we reduced the time of complying federal requirements from 34 days to only a few hours.
    Now it takes nine days to open a business fulfilling all the federal and local procedures.
    The Program of Simplification of Foreign Trade is oriented to medium size enterprises and it is facilitating the access to industrial inputs at competitive prices through a progressive tariff dismantling scheme. This program has reduced business transaction cost generating important savings (USD 1 billion) .
    To support these measures, the SE and the Customs authority are working to implement a one-stop shop to fulfill all procedures regarding foreign trade operations. This new instrument will be operating by the end of 2011.
  • Nota: En lo relativo a la participación del sector automotriz en el PIB y en la Inversión Extranjera captada por México, es importante destacar que este nivel de participación convierte al sector automotriz en un sector de alta prioridad para el Gobierno de México.
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  • WEF Competitivness ASA

    2. 2. Integration is the Future. The Picture. Source: World Economic Forum. The Global Competitiveness Index: Basic Requirements. Some facts: The market, the economy
    3. 3. Industrial redistribution US Imports Market Share Source: USDOC
    4. 4. Exports as a Growth Driver US Non-petrol Imports Market share (January-August 2010) Source: USDOC Source: World Bank
    5. 5. Integration is the Future The Picture
    6. 6. Strong recovery and macroeconomic stability Macroeconomic Environment 2010-2011 (Score and Ranking) Emerging market overheating index, 2011 0 Argentina Brazil Hong Kong India Indonesia Turkey Vietnam Singapore Thailand Egypt Peru Philippines Chile China Colombia Poland Saudi Arabia South Korea Venezuela Russia South Africa Czech Republic Mexico Pakistan Taiwan Malaysia Hungary Source: World Economic Forum. The Global Competitiveness Index: Basic Requirements. 139 economies are considered. Source: The Economist 20 40 60 80 100
    7. 7. Looking for reasons? Despite the perceived economic slowdown in the World … Mexico is in a situation less vulnerable than other countries Y With a budget deficit of under 3% of GDP and a total public debt of less than 40% Mexico would meet the Maastricht criteria! Source: Countries' Central Banks and National Statistics Offices, JP Morgan and Global Competitiveness Report 2009
    8. 8. Household expenditures Expenditure of households on goods and services for individual consumption (USD, 2008) Forecasted growth of middle income households 1 (%, 2010-2015) Although income levels in Mexico are similar to those in emerging economies, the level of household consumption is higher. Source: Own estimations based on data from Global Purchasing Power Parities and Real Expenditures, 2005 International Comparison Program - World Bank (2008) 1/The original data are for 2005 and the estimations for 2008 were made using the observed growth rates from those countries. Source: Own estimations based on ata from Winning in Emerging-Market Cities, Boston Consulting Group (2010). 1/ Middle income households are those with annual income over $10,000 dlls.
    9. 9. Projected average annual GDP growth rate (% 2009-2050) In the long run, developing countries outpace G20 advanced economies Source: AT Kearney, 2010
    10. 10. GDP outlook Gross Domestic Product (Billion Dollars) 2010 Source: Goldman Sachs. The N-11: More Than an Acronym. Global Economics Paper No: 153. March, 2007. 1/ Estimaciones de Goldman Sachs 5th place 11th place It is estimated that by 2050, Mexico will become the fifth largest economy and its GDP per capita GDP per capita will be comparable with (US Dollars) 2006 2010 those of developed countries. 20501 20501
    11. 11. Competitiveness: market access Trade facilitation indicators: Trading across borders rank Mexico's rank (WEF market access sub index) = improvement Source: Doing bussiness Source: World Economic Forum 2010
    12. 12. Deregulation advances Reduction of norms in Federal Government (number) Time to open a business (days) 70 60 58 58 58 50 40 27 30 27 20 28 13 10 9 0 2004 Source: Ministry of Public Function Source: World Bank 2005 2006 2007 2008 Source: Doing Business 2011, World Bank. 2009 2010 2011
    13. 13. Foreign Trade? This speaks for itself
    14. 14. Trade and legal frameworks North America: the competitiveness agenda X: 84.2% M: 51.1% Europe: seize opportunities and deepen FTAs X: 5.3% M: 12.6% X: 3.3% M: 30.8% Latin America: promote regional integration X: 6.6% M: 4.6% Asia: selective and ad hoc approach Presence in forae: ( WTO, APEC, OECD, LAIA)
    15. 15. Mexico’s Trade Balance 2011 EUROPEAN UNION: -$18 billion USD NAFTA: +$101 billion USD ASIA: -$92 billion USD OTHERS*: -$3 billion LATIN AMERICA: +$11 billion *Includes Africa, Oceania and other European countries Source: 2011 Data. Mexico’s Central Bank and Global Trade Atlas.
    16. 16. Mexico is, in a nut shell A big market The Mexican economy has a GDP of roughly 1 trillion dollars, with a population of 112 million. The country’s GDP is expected to reach 1.4 Mexicodollars in 2015 trade hub Manufacturing costs: trillion has a …a (IMF). cost advantage of 18.2% business Mexico has 11 FTAs covering 43 countries, which represents more than 60% of world GDP. average (of 17 industries) relative to the US (Source: Alix Partners 2009). Mexico enjoys macroeconomic … cost efficient stability, responsibly managed state finances and is pushing reforms to further improve the business environment … and stable!
    17. 17. Demography is destiny (2030)
    18. 18. Attractive FDI destination Competitive advantages 1. Geographic Location Large U.S. border and coast both at the Pacific and Atlantic Oceans and easy access to South America 2. Preferential access to foreign markets 11 FTAs with 43 countries and an approved legal framework with major trading partners 3. Skilled and competitive labour force Skilled workforce at relatively low cost, managerial skills and cultural affinity 4. Demographic window In the next three decades, the number of economic dependents will reach a record minimum (2025)
    19. 19. Foreign direct investment inflows per capita (1990-2009) Facts: •BRICS get all the talk •In spite of the hype, Mexico gets at least as much per capita FDI as they do Source: Global Insight
    20. 20. Mexico is well positioned Russia India China B COUNTRY Brazil R I C Mexico Indonesia M I South Korea S Turkey T 1. Macroeconomic environment 2. Open economy 3. Economic complexity 4. Total manufacturing cost 5. Domestic market 6. Demography 7. Workforce quality 8. Engineering graduates (per capita) 9. Democratic system 10. Human Development Index Equal or above Mexico Below Mexico, but close Clearly under Mexico Source: 1. Macroeconomic Environment: WEF The Global Competitiveness Report 2011-2012, Macroeconomic Environment/ 2. Open Economy: Doing Business 2012, Ease of Doing Business/ 3. Economic Sophistication: The Atlas of Economic Complexity, Harvard University/ 4. Total Manufacturing Cost, Manufacturing Outsourcing Cost Index, Alix Partners/ 5. Domestic Market: WEF The Global Competitiveness Report 2011-2012, Domestic Market Size Index/ 6. Demographic Bonus: UN World Population Prospects. The 2010 Revision. Forecast of total dependency rate in 2025 (population <15 & 65+ years) (15-64)/ 7. Labor availability and quality of the DFI Benchmark, Automotive OEM, Skills, attitudes and productivity/ 8. Engineering Graduates (per capita): UNESCO Institute for Statistics, International Monetary Fund. Engineering, manufacturing and construction graduates per capita 2009/ 9. Democratic System: The Economist, Democracy Index 20 2011/ 10. Human Development Index: UN, Human Development Index.
    21. 21. Currency stability = risk mitigation RISK Expected Real Exchange Rate variation (2008-2012) Buy and manufacture where you intend Natural Hedging to sell Source: Global Insight
    22. 22. After NAFTA? Automotive leads the way
    23. 23. Proof: what Volkswagen is doing Source: Volkswagen de México
    24. 24. This is not due to chance
    25. 25. Mexico´s place in the automotive industry (2011) 5th Exporter of light vehicles (2.14 million units) 1 8th World´s largest vehicle producer (2.69 million units) 1 8th World wide producer of light vehicles (2.55 million units) 6th 6th Exporter of commercial vehicles* (95,175 units) 2 World wide producer of commercial vehicles (136,678 units) 2 Occupied workers4: 68,895 19 of the top leading automakers are located in 15 states of Mexico. The automotive industry in Mexico accounts for: 6% of the Foreign Direct Investment (FDI) in the country3 4% of the national GDP 4 20% of the manufacturing GDP 4 1 Source AMIA 23% of Mexican total exports 5 2 Source: OICA 3 Source: Ministry of Economics 4 Source: INEGI 5 Source: Business Monitor International States with automotive production
    26. 26. Aerospace Highest investment attraction in aerospace manufacturing during the last decade. 6th destination in the world for research and development investment. The level of exports tripled in 6 years, reaching 3.2bn dollars in 2010. More than 240 companies are settled in the Mexican aerospace industry, 270% more than those established in the country in 2005. Mexico is top 10 provider to the American Aerospace Industry, better than all BRIC countries.
    27. 27. What has been done to promote the IT sector in Mexico? PROSOFT 2.0: A long run public policy (2002 – 2013) 7 strategies Start, progress and goals
    28. 28. Testimonials Mexico is ranked as the fourth global player in the exports of IT services and BPO after India, the Philippines and China. Gartner Group Mexico is the only Latin American country that scored "Very Good" in the assessment of cost, while other countries have had only a grade of "Good." Gartner Group Mexico is set at position 6 in the Global Services Location Index 2011 , becoming the first North American country due to the availability of human capital and the financial attractiveness (costs). AT Kearney Mexico is ranked as the most competitive location allowing a cost savings of 53.4% in activities of Back Office / Call centers, 31.7% in Software Design and 34.1% in Web and Multimedia, compared to the location of U.S. operations. KPMG
    29. 29. What is ProMéxico? Soft Landing Ombudsman One stop shop Investor-Aftercare Cooperation, advice and information
    30. 30. Bilateral Business Summit Series
    31. 31. Where to get information http://wiki.promexico.de/ http://www.promexico.gob.mx/ http://mim.promexico.gob.mx/
    32. 32. Thank you for your kind attention!!! ADEL ABOUHANA