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In a little more than a decade since the introduction of the Popular Health Insurance Scheme, Mexico has made vast strides in extending coverage and is now closer than ever to attaining universal coverage. Nonetheless, rapidly changing demographics have boosted demand for medical services and put significant pressure on the sector, which is now faced with the task of increasing capacity to effectively meet health care needs, while expanding access in rural and remote areas where infrastructure is lagging. But even though health expenditure has increased in the past few years, at 6.3% of GDP it remains below the OECD’s average of 9%. The past few years have also seen a marked expansion of the private sector, along with significant growth in sub-sectors such as pharmaceuticals, medical devices and medical tourism. A sector reform already announced for 2014 is expected to increase integration and reduce the fragmentation that has beset the sector.

For the past decade the agriculture sector has grown marginally – at an annual average rate of 0.9% – as the rest of the economy continues to industrialise. Its contribution to national GDP was estimated at 3% in 2013, down from 3.4% the previous year. The prevalence of small-scale farmers, limited financing options and widespread rural poverty are some of the factors behind the slow pace of expansion. In the past three years adverse climatic conditions have also affected the sector. While some segments of the Mexican agricultural sector, such as fruits and vegetables, have benefitted from the North American Free Trade Agreement (NAFTA) since 1994, others, namely grains, have been adversely affected by increased competition with highly subsidised and efficient US producers. Efforts to diversify export markets, coupled with production-oriented policies and an agrarian reform to be announced in 2014, could bring some much-needed dynamism to the sector. This chapter includes an interview with Luis Rebollar González, President and General Manager, DuPont México, Central America & Caribbean.

Selected by the current government as a pillar for growth, the tourism sector contributes more than 8% to national GDP and is the fourth-most-important source of foreign currency. With the exception of 2009, tourist arrivals have increased steadily from 22.9m in 2008 to 23.7m in 2013. Foreign exchange inflows generated by the sector also registered an increase of 8.5% in 2013, reaching a record $13.8bn, 3.4% higher than the previous record of $13.37bn in 2008. However, despite positive growth in the past few years, Mexico’s tourism sector has lost competitiveness in the international arena. A combination of internal insecurity and a deficient transportation network remain its most significant challenges. Nonetheless, with the current administration’s policies to diversify both the tourist offering and source markets, the sector should be able to regain some of the competitiveness lost in recent years and develop segments, such as cultural tourism, which until now have been underexploited. This chapter includes an interview with Claudia Ruiz Massieu, Minister of Tourism.

As new constitutional reforms start to take shape, Mexico is investing heavily in its transport and logistics infrastructure. Increased economic activity has put pressure on the existent road and rail networks, prompting the current government to assign a bigger slice of the federal budget to the improvement of connections by land, sea and air. Total investment (public and private) in the transportation and communications sectors is expected to reach $99.45bn between 2013 and 2018. Between 54% and 57% of all of Mexico’s cargo depends on road transportation. In the coming years the government plans to add some 19,000 km of roads to the existing 377,000 km, alongside improvements to urban transportation, airports, ports and rail system. With its eyes set on becoming a regional transport hub, the government hopes a new public-private-partnership law, published in early 2012, will help attract more private investment into the sector.

Mexico’s construction industry had a difficult year in 2013. After growing 4% in 2011 and 1.9% in 2012, the accumulated losses for the sector during the first nine months of 2013 amounted to a 4.5% reduction in construction activity. An acceleration of government spending before the end of the year allowed the sector to finish with a more modest reduction of 2% in construction activity, with the sector accounting for 7.6% of GDP in 2013. The homebuilding sector has been the worst affected. Reeling from a crisis that left some of the country’s largest home builders in bad shape, the real estate sector is finding ways to grow in other segments. Investment coming through new property trusts is pushing the sector to rally around more profitable markets, while demand for office, industrial and commercial space continue to sustain the real estate sector. This chapter includes an interview with Alonso Quintana Kawage, CEO, Empresas ICA.

The telecoms industry, which includes fixed and mobile communications as well as pay TV, saw its revenues expand from $26.6bn in 2009 to $34.7bn at the end of 2013. After years of underinvestment and a market structure that has stifled service penetration, a reform to reduce the influence of dominant players in the telecoms market is set to increase competition, facilitate wider access and put downward pressure on prices. The IT sector now accounts for 6-7% of GDP and is expected to grow rapidly as constitutional reforms reshape the industry. Exponential growth has attracted international players and allowed for the emergence of an established domestic IT industry. However, asymmetric market conditions have made Mexico one of the least-connected countries in the region. There are approximately 40m internet users in Mexico, but only 17% of its 117m people currently have internet access at home. For telecoms firms in particular, the untapped market for additional services is increasingly attractive. This chapter features interviews with Gabriel Oswaldo Contreras Saldívar, President Commissioner, Federal Institute of Telecommunications; and Ankur Prakash, Executive Vice-President, TCS Latam.