The incoming Mexican President-elect Andrés Manuel López Obrador has terminated a long-planned expansion of the Mexico City airport, alarming nearshore leaders who see the expansion as a symbol of growth and stability.
The decision to halt the construction of the airport, following the result of a referendum, has been described by nearshore leaders as “very disappointing” and will produce increased instability for the country and business owners.
The incoming president takes office in December and said that the money, which was estimated to cost $13bn, would be used to improve existing facilities, according to the BBC.
The impact on the industry
Anurag Kumar, CEO of iTexico, called the decision “very disappointing”.
“Personally, I am very disappointed,” he said, “Maybe it is a good political move but it definitely is not a good economical move and I hope they reconsider.”
Despite this, he doesn’t think it will have an effect on the IT outsourcing industry in the country, but said it wasn’t a good indicator.
“I saw a lot of companies and customers not just from the US, but from Canada and Europe have started to look at Mexico as an option for IT technology and software, and it may indicate that Mexico is not that open for business,” he said. “It might make people pause to consider Mexico as a place to do business.”
“I think Mexico is losing an opportunity,” said Kumar.
Worrying for foreign investment?
Ana Laura Monroy Morales is the founder and director of Welcomex, a company that provides advice to foreign companies who work in Guadalajara.
She believes the decision has given the country, and herself, a lot of instability.
“I’m already looking at some changes, especially in the next couple of months in general in business – not only my business but the rest of business is talking about in Guadalajara for example, everything has completely stopped,” said Morales.
Morales said that foreign investment into Mexico has grounded to a halt. A lot of the companies she works with have projects that have been stopped or completely cancelled.
“They [foreign companies] do not want to make a decision or proceed with any decision from here until the beginning of the year, or December 1st when our future president comes into power,” she said.
Morales underlined that Mexico is facing a complete change, internally and externally, and she is waiting to see what will happen once Lopez Obrador comes into power.
IT has nothing to worry about
Angel Alban, the president of Zventus, has a more positive outlook.
“As we are in business services and we primarily are a B2B type professional services organization we don’t really see a big impact to our business at this time,” he said.
Alban believes companies looking to invest in Mexico will continue to invest.
“The challenge on a global basis is to find talent, to find strategic locations on the globe where you can deliver your services more efficiently and more effectively to your end clients,” said Alban.
He added: “I think technology is a skill and a talent sought after around the globe and Mexico is producing great IT talent and I don’t think there will be an impact there – in fact I believe there is going to be more investment into Mexico to leverage its IT capabilities.”
Alban thinks the event will have a greater impact on the global markets and for the government’s ability to raise capital. It will therefore have an impact on large infrastructure type projects in the country.
“I think when you think about foreign investment in Mexico, at least from our experience, there are so many levels of that foreign investment taking place in Mexico. Raising capital on the government’s behalf – there will be some challenges there,” he said
Overall, he thinks it is too early to use this project’s cancellation as a sign of the future.
“I think we are going to have to watch this space,” said Alban.