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Mexico Tomorrow: 2012, Ideas for the future
 

Mexico Tomorrow: 2012, Ideas for the future

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Presentación de Ernesto Cordero Arroyo en la Conferencia "México Mañana 2012: Ideas para el Futuro" organizada por la asociación de estudiantes UChicago en Chicago, Illinois, EEUU.

Presentación de Ernesto Cordero Arroyo en la Conferencia "México Mañana 2012: Ideas para el Futuro" organizada por la asociación de estudiantes UChicago en Chicago, Illinois, EEUU.

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    Mexico Tomorrow: 2012, Ideas for the future Mexico Tomorrow: 2012, Ideas for the future Presentation Transcript

    • MEXICO TOMORROW:2012, IDEAS FOR THEFUTUREERNESTO CORDERO-ARROYOUniversity of ChicagoApril 21, 2012
    • 2 Economic Stability Has Translated into Growth • Mexico has enjoyed a solid economic growth since 2010. For 2012, the IMF growth forecasts has been revised upwards. • Interest rates are close to historical minimums. Growth Forecast 2012 Government Bonds (Percent change of constant prices) 12 (%) 1 año China 8.2 India 6.9 11 5 años Peru 5.5 20 años Colombia 4.7 Chile 4.3 10 30 años Argentina 4.2 Russia 4.0 Mexico 3.6 9 Korea 3.5 Australia 3.0 8 Brazil 3.0 South Africa 2.7 New Zealand 2.3 7 Turkey 2.3 United States 2.1 Canada 2.1 6 Japan 2.0 Norway 1.8 Average: 3.1 5 Austria 0.9United Kingdom 0.8 France 0.5 4 ene-07 sep-07 ene-08 sep-08 ene-09 sep-09 ene-10 may-07 may-08 may-09 jun-10 oct-10 feb-12 feb-11 jun-11 oct-11 Belgium 0.01 0 1 2 3 4 5 6 7 8 9 Percent Source: IMF. Source: SHCP
    • 3 The Exchange Rate and Inflation have remained stable Depreciation by Decade Inflation by Decade 12,576 15,062 12,500 450 15,000 1,200 400 1,000 350 300 800 250 221 600 200 401 150 400 100 200 50 31 55 0 0 81-90 91-00 01-10 81-90 91-00 01-10Source: Banco de México.
    • 4 Responsible Public Finances Total Deficit, 2010 International Reserves (% of GDP) (billion dollars) 32. 14 150 145 12 140 135 10 130 125 8 120 115 6 110 105 4 100 95 2 90 85 0 80 75 Rumania Grecia Lituania México Hungría Bulgaria Promedio otros Perú España Promedio BBB Túnez 70 Jan-08 Jan-09 Jan-10 Jan-12 Jul-10 Jul-08 Jul-09 Oct-08 Oct-09 Oct-10 Apr-11 Jan-11 Jul-11 Oct-11 Apr-08 Apr-09 Apr-10Source: S&P (December 2010), SHCP México.
    • 5Tax revenues have increased• There has been an important effort to substitute oil revenues with tax revenues to strengthen public finances.• In recent years, significant progress has been made in expanding the tax base. Non-Oil Tax Revenues Active Tax Payers (% of GDP) (Millions) 4010.5 10.4 36.9 35 33.5 10.0 10.010.0 28.3 30 25.9 9.5 25 23.9 24.5 9.5 9.3 20.5 20 9.0 9.0 15 12.3 8.6 9.4 10 8.5 8.4 5 8.0 0 2011* 2004 2005 2006 2007 2008 2009 2010 2003 2004 2005 2006 2007 2008 2009 2010Dic 2011 Source: SHCP. Source: SHCP-SAT.
    • 0 10 20 30 40 Noruega Din. N.Z. Islandia R. Unido Suecia Irlanda Australia Lux.Source: Revenue Statistics 2009, OECD Hungria Holanda Italia Fin. Austria Portugal  Tax revenues are close to the OECD average. Bélgica Grecia (% of GDP) Polonia Government Turquía Corea Central Government Tax Revenues Francia Tax Revenues of the Central México R. Checa Canadá Eslovenia España Average: 21.2% E.U.A. 6 Alemania Japón Suiza
    • 7 Social Security Contributions and Local Governments Revenues When Mexico’s social security contributions and local governments revenues are added to the central government revenues, Mexico falls to the last place of the OECD international comparison. Mexico’s social security contributions represent a third of the OECD average. Mexico’s local governments revenues represent one sixth of the OECD average. Tax Revenues: Social Security Local60 Local Government and Social Security Contributions Government (% GDP) (%GDP) Revenues (%GDP)50 Seguridad Social Impuestos locales Tributarios 8.440 Average OCDE: 35.8%30 6.2 19.520 2.8 110 2.8 16- 1 Turquía Portugal Lux. N.Z. Din. Holanda Grecia México Francia España Suecia Fin. Irlanda E.U.A. Corea Japón Bélgica Noruega Islandia Canadá R. Checa Alemania Italia Austria Hungria R. Unido Polonia Suiza Australia Eslovenia Average OECD MexicoSource: Revenue Statistics 2009, OECD Source: OECD
    • 8Property Taxes Mexico’s property tax collection is done by local governments. These receipts are low compared to other countries. % GDP5 Property Tax Collection, 2009. 4.64 3.5 3.13 México:2 1.7 1.3 0.91 0.7 0.2 0.30 Honduras Argentina Francia Alemania España Irlanda Ecuador Colombia Corea Portugal R. Unido Canada Grecia Bolivia Brasil México Venezuela R. Checa Perú Italia E.U. R. Dom. Source: Revenue Statistics 2009, OECD
    • 9 Expenditure Policy Programmed expenditure increased 55% between 2006 and 2012, which means that more money has been assigned to priority programs. Programmed Expenditure (Million pesos, 2012) 2,869,583 Programmed Expenditure Increase (real %) 55% 2006-2012 Education 21.6 1,846,375 Health and other social issues 38.4 Justice, National Security and Public 93.0 Order Issues Poverty* 76.6 Investment 133.7 *Includes 3 social development subfunctions: social protection, recreation, culture & environmental protection 2006 2012 Source: SHCP
    • Expenditure Policy Investment has increased as a share of programmed expenditure. Programmed Expenditure (Billion pesos, 2012) 1,864.9 2,869.6 15% 23% 84.9% 76.6% 2006 2012 Current Expediture Public InvestmentSource: SHCP
    • Current Expenditure Composition Social programs expenditure has increased as a share of current expenditure. Current Expenditure Composition (%) 5.2% 22.7% Social Programs 20.5% 31.4% (subsidy) 44.8% Pensions and retirement Operational Expenditure 21.1% Personal Services 29.5% 24.8% Source: SHCP
    • 12Deregulation and SimplificationMéxico is ranked along with Chile, Perú Mexico ranks 1st place in Latin Americaand Colombia as best countries to do in the Economic Complexity Index.business in Latin America. Ranking 2012 Doing Business The Atlas of Economic Complexity 78 Singapur 1 Chile 39 57 52 Perú 41 Colombia 42 30 México 53 20 13 Uruguay 90 1 2 México Panama Chile Brasil Japón EEUU Alemania Argentina Argentina 113 Brasil 126 Source: Doing Business. Source: Harvard, MIT
    • 13Exports Total Goods Exports for Selected Manufactured Goods Exports for Latin American Countries in 2010 Selected Latin American Countries in (Percentage) 2010 (Percentage) 100%100% 3% 5% 5% 90% 2% 6%90% 30% 10% 26% 33%80% 80% 50% 52% 22% 19%70% 62% 70%60% 81% 60% 7%50% 50% 45% 4% 6% 55% 37%40% 60% 40% 24%30% 45% 30% 47%20% 36% 15% 20% 21% 21% 16% 25% 9%10% 8% 10% 5% 1% 2% 3% 0% 9% Argentina Brazil Chile Colombia Mexico Peru 0% Other Transactions Primary Products Manufactures Argentina Brazil Chile Colombia Mexico Peru Natural Resource-Based Low-Tech Medium-Tech High-TechSource: Economic Commission for Latin America. Source: Economic Commission for Latin America.
    • 14 External Driver  Non-oil exports have increased since 1993.  Non-oil exports have recovered from the recent crisis and in 2011 registered 14.2% annual growth. Non-Oil Exports (monthly, adjusted, million dollars)30,000 México is the most competitive country in auto parts manufacturing (KPMG).25,000 One out of 7 cars circulating in the US is manufactured in México20,000 The Mexican aerospace industry occupies the first place in manufacturing15,000 investment in the world (Deloitte).10,000 México is the biggest producer of television sets (International Trade Center) and the third biggest producer 5,000 of smart phones (Global Trade Atlas). 0 Ene 07 Ene 93 Ene 94 Ene 95 Ene 96 Ene 97 Ene 98 Ene 99 Ene 00 Ene 01 Ene 02 Ene 03 Ene 04 Ene 05 Ene 06 Ene 08 Ene 09 Ene 10 Ene 12 Ene 11 Source: INEGI
    • 15 Domestic Driver The Mexican banking system is solid and there has been positive monthly growth in credit since the second quarter of 2010. Commercial and Development Bank Credit to the Private Sector (Annual change, %) Total Vivienda Consumo Empresas 40 30 20 10 0 -10 -20 -30 ene-08 abr-09 ene-11 nov-08 ago-10 dic-11 jun-08 oct-09 mar-10 jul-11 Source: Banxico
    • 16Development Bank Development banks have increased credit to Small and Medium Enterprises (SMEs) and rural producers. Nafin guarantees have contributed to increase by 89% (real terms) commercial banks loans to SMEs during President Calderons Administration. Banking Credit to SMEs Development Banks (Million Pesos) (Jan-Dec 07 vs Jan-Dec 11)  During 2011, 1.5 million SMEs were 135,491 supported by development banks, 85% more than in 2007.1 89%  FIRA and Financiera Rural have increased their loans to rural producers by 58%. 59,421  80% of home mortgages were awarded to poor families (earning less than 6 73,666 minimum wages), compared to 53% in 14,152 2007 2006 Jun-11 Loan with guarantees NAFIN Loan to SME 1/ Nafin and Bancomext with credit and guarantees (considers Source: NAFIN microcredits).
    • 17Infrastructure From 2002 to 2006, the annual average of budget investment in infrastructure was 3.6% of GDP, while from 2007 to 2012 it will be 4.6%. Infrastructure Investment Infrastructure 2002 – 2012 Investment 2000 – 2012 (% GDP) (Thousands of Millions of pesos, 2012) 5.5 5.0 OCDE Average 4.8 4.8 5.0 (2011) 4.5 3.3% 651.1 4.3 4.5 4.1 4.0 47.7% 3.9 4.0 3.5 3.5 3.5 440.7 3.1 3.0 2.5 2.0 1.5 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011a 2012a Average 2001 - 2006 Average 2007 - 2012Source: SHCP Source: SHCP
    • 18 • The unemployment rate in Mexico is lower than Spain, US and Canada. In Latin America is lower than Argentina, Chile and Brazil. • Expansion in employment has continued at a fast pace. Unemployment Rate, 2011 Workers registered at IMSS (%) (Thousands, 3-month moving average)25 15,500 20.7 15,30020 15,100 14,90015 14,700 14,500 9.1 14,30010 7.6 7.3 7.2 14,100 6.7 6.0 4.5 13,900 5 13,700 13,500 0 ene-11 sep-11 mar-09 mar-10 mar-11 jul-11 sep-08 nov-08 ene-09 may-09 sep-09 nov-09 ene-10 may-10 sep-10 nov-10 may-11 ene-12 nov-11 jul-08 jul-09 jul-10 Alemania España EEUU Canadá Brasil Argentina Chile México Source: IMSS Source: IMF, estimates.
    • 19Income and Equality GINI COEFFICIENT GDP per Capita PPP 2012* 20 18 17.61 15.68 16 14 12.30 12 10 9.20 8 6 3.97 4 2 0 India China Brasil México Rusia Source: IMF “World Economic Outlook - September 2011”, *Adjusted to purchasing power, IMF estimates.
    • 20Reduction in Extreme Poverty• Between 1996 and 2010, the percentage of the population living in extreme poverty was reduced from 37.4% to 18.8%.• Between 2000 and 2010, 47% of municipalities classified as “very highly poor” and 40% of municipalities classified as “highly poor”, left these classifications. Population living in extreme (food) poverty (Percentage) 40 37.4 35 30 25 24.1 21.4 20 18.8 15 10 5 0 1992 1996 2000 2010 Source: CONEVAL.
    • 21Multi Factorial Poverty in Mexico 18.00% 19.30% 4.50% 5.80% 33.00% 28.70% 33.90% 35.80% 10.60% 10.40% 2008 2010 Extreme poverty Moderate poverty Vulnerable by social need Vulnerable by income No poors No vulnerableSource: CONEVAL, 2010
    • 22 Education • Universal enrollment has been achieved in basic education. • Scholarships and investment in educational infrastructure have contributed to increase the enrollment in secondary and tertiary education. Enrollment in Basic Enrollment in Secondary Enrollment in Tertiary Education Education Education (%) (%) (%)100 70 35 100 66.7 94.1 66.3 97.9 65 58.6 30.9 30.1 60.9 95 30 60 25.2 26.7 55 90 25 88.9 50 48.4 21.6 85 45 20 2010/e 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010/e 2000 2003 2006 2008 2001 2002 2004 2005 2007 2009 2010/e Source: SEP.
    • 23 Health • In 2011, Mexico reached universal health coverage. - Seguro Popular affiliated more than 51 million Mexican with low incomes and who did not have access to health services provided through social security. • From to 2007 up to now, 2,874 new health units were constructed. Accumulated Investment in Hospital Seguro Popular Affiliation Infrastructure (Millon people) 55.955 51.5 (Billion pesos)50 35 31.145 43 3040 2535 31 2030 27 15 8.3 12.1 12.725 21 1020 3.3 4.3 15 5 0.715 11 010 ISSSTE ISSSTE Salud Salud IMSS IMSS 5 5 0 2004 2005 2006 2007 2008 2009 2010 Nov 2011 01-04 07-10 p/Source: Secretary of Health. p/ Proyected.
    • 24Housing• Between 2007 and 2010, 3.3 million home mortgages were assigned, of which 60% were given to low income families (earning below 4 minimum wages). Mortgages (Millions) 4.0 3.5 3.3 3.0 2.5 2.0 1.7 Assigned to low income families 1.5 1.0 0.8 2.1 0.5 1.2 0.5 0.0 95 - 98 01 - 04 07 - 10* Source: Conavi.
    • 25 Quality of housing • The percentage of homes without a cement floor was reduced from 13% to 6.2% between 2000 and 2010. • More than 90% of homes have access to: Running Water, Sewage, Electricity, Cement Floor, and Appliances. Homes without a cement Homes with Running Water and Sewage floor (%)16 (%) 95 2000 2010 91.5 13.2 90.3 90 88.812 85 8 6.2 80 78.1 4 75 0 70 2000 2010 Running water Sewage Agua entubada Drenaje Source: INEGI. Source: INEGI.
    • 26Human Development Index• Better social and economic conditions have improved Mexico’s quality of life. Índice de Desarrollo Humano Human Development Index 2011 Chile, 0.80 0.80 Mexico, 0.77 Russia, 0.76 Brazil, 0.72 0.70 China, 0.69 0.60 India, 0.55 0.50 0.40 0.30 1990 2000 2005 2009 2010 2011 Source: UNDP.
    • 27Sustainability and Inclusive GrowthGlobal DecelerationUS Exports Markets Diversification and Domestic MarketEurope Banking SupervisionStructural TransformationCompetitiveness Labor, Energy, Telecomm, Consumers …Political Reform Reelection, Legislative Reduction, Ratification, Second Round, ...Federalism Revenues, Health, Education, Security, Accountability, …Rule of Law Legal Certainty, Justice Procurement, Corruption, Enforcement, …
    • 28Sustainability and Inclusive GrowthPoverty and Inequality Productivity Reduction Education Infrastructure Innovation Cash Broader Tech IntensiveConditional Coverage Transport Transfer R&DPrograms Energy Improve Agencies andSocial Safety Quality Telecomm Funds Net Structural Transformations More Revenues used Effectively, Efficiently, and Transparently
    • MEXICO TOMORROW:2012, IDEAS FOR THEFUTUREERNESTO CORDERO-ARROYOUniversity of ChicagoApril 21, 2012