Kirk LaughlinBy Jon TontiDespite Mexico’s PRI having a history of being pro-business, there is always a bit of uncertainty when administrations change. Enrique Peña Nieto now takes control of Mexico and is seen as “very aware” of the positive impact IT Services and BPO for export have on the country according to Alejandro Camino, VP of Marketing & Communications at Softtek, one of Mexico’s most influential IT consulting firms.
On May 20th Nieto visited Jalisco for the third time recently attending a conference on Foreign Trade with two sub events on education and emerging information technologies.
“Nieto was the only candidate that really approached the IT community, he went to the IBM campus in Guadalajara and held a meeting, listened to a lot of the concerns, he seems to be very aware about tech related constituencies,” said Camino.
That type of concern was not out of the ordinary for Nieto who enjoyed a good record of pushing tech progress in the State of Mexico (the countries largest) he governed from 2005 to 2011. “When he was the governor of the state of Mexico, the IT initiative became more robust program in terms of trying to create the entire ecosystem for it to flourish, bringing investment, etc.,” added Camino.
Building Blocks
During the Calderón administration Camino’s Softtek along with others were invited by the Mexican congress to participate in the construction of a roadmap to advance the three determined critical industries of IT, advanced manufacturing (including aerospace, medical devices and electronics), and automobiles. There was a focus on how those three critical industries can be leveraged to benefit one another; IT is an obvious critical player in that.
“These are types of initiatives that are very likely to continue because they are efforts that already have a mandate from congress,” he said. Camino also mentioned that PEMEX may follow the Petrobras model of allowing more foreign investment to stimulate the oil sector.
For those worried about the the PRI returning to its old way is has been said that the PRI is governing a very different Mexico where two other strong political parties, the Progressive Movement (PRD) and National Action Party that received 31.6 and 25.4 percent of the vote respectively, forces coalition building. That dynamic should keep the PRI honest.
There are Difficulties
Despite Mexico having a large presence of firms like Accenture, IBM, Wipro, Tata Consultancy, and others the country cannot praise high growth of late as the country grew at a lackluster average of 1.7 percent between 2000 and 2010 according to the Mexican National Institute of Statistics (INEGI).
Manuel Suarez-Mier, an economist at American University, was recently cited in the San Francisco Chronicle for asserting that drug-related violence in Mexico “shaves almost 1.2 percentage points annually off Mexico’s gross domestic product and the country could double its foreign investment, which reached $19.4 billion in 2011, if the cartels were brought under control…”
Nieto has brought in General Oscar Naranjo, former commander of the Colombian National Police force as his security adviser and promises to create a 40,000 man National Gendarmerie (special policing force modeled on those of France, Italy and Colombia) and expand the federal police by 35,000 while vastly reducing the army’s role in the fight. In a contribution to the New York Times, Nieto himself wrote. “I will consolidate the state and municipal police forces and provide greater federal oversight, to crack down on corruption within their ranks. I will propose comprehensive criminal law reform. I have already sought out the advice of Gen. Óscar Naranjo, who recently retired as Colombia’s national police chief and is one of the world’s top crime fighters.”
Camino acknowledges that the current way the Mexican government is fighting the Mexican Cartels (a term he thinks a misnomer as they are in fact international crime organizations) with 47,000 dead since 2007 has hampered growth.
Great article John!
I attended a session with Mr Peña Nieto before the election. He seems to be a pragmatic, pro-business individual. The hope of many of us in IT is that he and his team can negotiate agreements with other political actors to make Mexico more business-friendly and increase both the growth rate and job creation. I don´t see why Mexico couldn´t grow at much higher than historical growth rates. Mexico has the raw talent and at least for a while a great demographic bonus. Last year, the GDP growth of Mexico was higher than Brazil´s and the trend should continue.