Jaime Chalita Zarur, President for San Luis Potosí, Employers Union of the Mexican Republic (Confederación Patronal de la República Mexicana, COPARMEX): Interview

Interview: Jaime Chalita Zarur

How competitive is San Luis Potosí’s economy in handling external economic and trade shocks?

JAIME CHALITA: In 2018 the state’s economic growth was slightly over 3%. In addition to collaboration taking place between the public and private sectors in San Luis Potosí, the state holds a number of advantages to successfully address and overcome the current and future challenges that face the global economy. Thanks to internal migration from other states and cities in Mexico, we have a skilled and well-prepared human capital subset. The stability of the labour force, the work environment and the state’s connectivity have contributed to attracting many local and international investments over recent years. The state’s annual GDP growth, which is above the national average, and the unemployment rate, which is below Mexico’s average, have improved San Luis Potosí’s reputation among investors and demonstrated that the state is highly competitive at all levels. The synergy created through cooperation between the private sector and public institutions has promoted socio-economic growth. It has also facilitated a dynamic by which the state’s productivity and competitiveness can be strengthened regardless of the national political situation. Private sector institutions, along with industry institutions such as COPARMEX, have established a collaboration framework in San Luis Potosí that aims to foster growth no matter what political party is in power.

In what ways will the Alianza Centro-Bajío-Occidente bolster growth and contribute to the economy?

CHALITA: The region accounts for 16.6% of Mexico’s total population and 9.7% of its territory. Furthermore, the increasing human capital exchange between states has become an asset for the region. Therefore, once we start working together as allies and boosting each other’s strengths, we will contribute to attracting and retaining talent for not just one state, but the whole region. When we have established companies in the region from countries where the working culture and expertise are highly developed and sophisticated, our labour force will have the opportunity to learn and acquire the skills to make San Luis Potosí’s economy both productive and competitive. Additionally, if we combine the social, labour and economic elements in the region, and improve security, rule of law and services, the competitive advantages will be unparalleled in the country and arguably in Latin America. However, we are facing a significant demographic challenge. The fertility rate is decreasing, and the lack of young workers could hamper future socio-economic growth, given that some states might have an insufficient number of young professionals to fill the skills gap. In the case of San Luis Potosí, the government is implementing measures to attract and retain as much human capital as possible. For example, under the dual education system, the government is promoting a training programme that enables young people to stay at their host companies once their studies and internships are complete.

To what extent will the new BMW plant consolidate San Luis Potosí as an automotive cluster and its ability to attract more capital investment?

CHALITA: There are eight car manufacturer companies in the Bajío region, and in a 300-km perimeter there are over 800 car suppliers. In addition, the region is a seven-hour drive from the US border. Although the different states – San Luis Potosí in particular – have improved their connectivity and logistics infrastructure, industries must continue to work on making transport networks more efficient and competitive. For example, an expansion development project is being implemented to improve services at the airport.

Although this new plant will strengthen the region’s primary position in the automotive industry and be able to boost confidence amongst investors, the state has to ensure that the adequate infrastructure is in place so that growth is able to match the level of investment.