President Enrique Peña Nieto: Interview

Interview: Enrique Peña Nieto

How can Mexico capitalise on its unique strategic location to become a logistics hub?

ENRIQUE PEÑA NIETO: Mexico launched the National Infrastructure Programme to become a high-added-value global logistic hub. This broad development agenda –with record-high public-private investments of up to $500bn– foresees the construction of the New Mexico City International Airport and will almost double the capacity of our seaports, among other projects. Special Economic Zones in the south of the country. This measure will strengthen the business environment through incentives such as one-stop shops, job training, and labor certification, as well as special Customs regimes. mercial agreements with 46 countries and privileged access to $800bn worth of trade that gives us solid advantages. In the same way, with the recently agreed Trans-Pacific Partnership, Mexico consolidates as an attractive destination for foreign investment.

What effects could the drop in oil prices have on Mexico’s hydrocarbons industry?

NIETO: In the current global environment of historic low commodity prices, economic slowdown, and brisk currency fluctuations, Mexico’s energy reform allows us to share risks with the private sector that used to be carried on by our state productive enterprises. The reform also introduces private investment into the midstream and downstream subsectors. Hence, the Mexican refining industry becomes more attractive to foreign capital, considering the high revenue margins between low oil costs and domestic fuel prices. We are promoting an anticipated liberalisation of gasoline, diesel, and liquefied petroleum gas (LPG), fostering competition on national fossil fuel market. islation, foreign investment is already arriving to Mexico. It is estimated that the contracts assigned through Round One will account for $3bn of new investments and 90,000 extra barrels a day on production. When international prices continue displaying volatility and uncertainty, Round One is showing that Mexico is a competitive investment destination for oil and gas companies worldwide. The new hydrocarbons model sets the basis to develop a more resilient industry, capable of facing international economic shocks and continue delivering positive outcomes to our society.

How will the unprivileged segments of the population benefit?

NIETO: Building an inclusive nation is a top priority of my government and a major driver of the transformation we have started. The first positive effects of this process are already visible.

Thanks to energy and fiscal reforms, electric power tariffs decreased nationwide, and we stopped monthly increases in gasoline and diesel prices. Besides, as a consequence of the telecom reform, all national long-distance calls are charged as local, saving more than $1.48bn per year.

By reducing the cost of these basic goods and services, we are supporting household purchasing power of most Mexican families. However, to really improve inclusion we have to provide unprivileged people what they need to thrive.

For this reason, two years ago, we passed a reform aimed at increasing the quality of education. We emphasised the improvement of school facilities and their complete access to information and communication technologies. Undoubtedly, a better educated nation will be more capable to take full advantage of the new opportunities that have been created by the reforms.

What are the next steps forward?

NIETO: Over the last three years, Mexico has reached 13 structural reforms. Now we face the challenge of implementing them to increase and democratise productivity, improve competitiveness, and boost inclusive economic growth. Mexico’s transformation already laid the foundation of a more vigorous nation. In the near future, we will keep creating better opportunities for more Mexicans. We will introduce the Educative Infrastructure Certificates, which will continue to strengthen the education of millions of Mexican children and, when they turn 18, new development options will be available. For instance, we will back young entrepreneurs to obtain up to $9000 to open their own business, or up to $150,000 to consolidate an existing one. With high-quality education, improved business and entrepreneur environment, as well as access to the world’s most dynamic markets, we are enabling the next generations to write their own success stories.