OBG talks to President Enrique Peña Nieto

Interview: President Enrique Peña Nieto

How would you describe Mexico?

PRESIDENT ENRIQUE PEÑA NIETO: Mexico is one of the world’s largest economies, with a population of over 119m people and a GDP of $1.2trn. Our country has benefited from a stable macroeconomic environment for years and remains one of the most open economies in the world. Mexico is also a country of hardworking people; it has a young, talented and skilled workforce. Furthermore, Mexico is already a leader in advanced high-tech manufacturing, and thanks to its strategic location for global production and trade, is an attractive investment destination. For 80 years, the country has experienced peaceful and orderly government transitions. Our mature democracy and institutional strength provide a good environment for sustainable economic growth and social development. Mexico is a country with valuable assets and great potential; this is why, we are undergoing a transformation to strengthen our institutional framework, boost economic competitiveness, and raise living standards for all Mexicans.

Can you tell us about Mexico’s reform agenda?

PEÑA NIETO: Last year, thanks to the political will of the main political parties and the hard work of legislators, Mexico laid the ground for its transformation. The goal of the reforms approved last year is to achieve sustained high growth for the benefit of Mexican families. First, the labour reform allows for a more flexible labour market making it easier for companies to hire workers. Secondly, the education reform will improve the quality of education, increasing Mexico’s human capital. Thirdly, the economic competition and telecommunications reforms will establish new standards in order to level the playing field, as well as eliminate barriers so that more companies can compete in all sectors. In regards to our tax system, the fiscal reform seeks to simplify the payment of taxes for recently created small businesses, and offers them a scheme to gradually join the formal sector with certain tax benefits. In addition, the financial reform will enable lending institutions to grant more credit at more favourable rates, making it possible for small and medium-sized enterprises to invest, grow and prosper. Finally, the energy reform will promote competition and attract major investments to increase oil and natural gas production. The state will keep the ownership of Mexico’s energy resources while allowing our state-owned energy firms to enter into contractual agreements with private parties. This reform agenda will transform Mexico into a more productive and competitive country, capable of attracting more investment in high-potential sectors.

What else does Mexico have to offer to investors?

PEÑA NIETO:Mexico is an increasingly competitive destination for foreign investment. It is the 14th-largest economy in the world and one of the most open economies as well; it has free trade agreements with 44 countries and a potential market of 1.1bn consumers. Mexico is committed to strengthening its position as a top investment destination by investing in ports, highways, airports and telecommunications coverage. Mexico’s National Infrastructure Programme 2014-2018 comprises over $500bn in public-private investments to improve connectivity, quality of infrastructure and mobility. Mexico is on the path to becoming a high-value-added global logistics centre. Therefore, we will continue to take advantage of our location by improving our infrastructure system, which gives access to the North and Latin American markets, and makes Mexico a bridge between Asia and Europe. By investing in infrastructure we are investing in Mexico’s future. Hence, Mexico is a country on the rise.

How can the living conditions of Mexicans be improved?

PEÑA NIETO: Transforming Mexico into an inclusive society with equal opportunities for all, is a national goal. For this, we have included measures in the reforms to increase the social safety net and the quality of public services for all Mexicans. For the first time in Mexico, there will be an unemployment insurance that will help workers during their transition between jobs, preventing them from joining the informal sector or falling into poverty. The Tax Reform also includes the creation of a universal pension plan for adults 65 years old and above. In addition, we have established a life insurance for single mothers so that children are protected until they finish their higher education. Thanks to the Education Reform, the quality of education will be improved so that our children are better prepared for tomorrow’s challenges. In this area, we have increased public spending in science and research by over 30%. We are taking steps to improve human capital and ensure the well-being of all Mexicans.