The Business Year

Francisco N. González Dí­az

MEXICO - Economy

In Touch

CEO, ProMéxico

Bio

Francisco N. González Dí­az was appointed CEO of ProMéxico by President Enrique Peña Nieto on June 10, 2013. He graduated in Business Administration from Instituto Tecnológico Autónomo de México. He later obtained a Master’s in Business Administration from the Instituto Tecnológico y de Estudios Superiores de Monterrey and the University of Texas at Austin. His career spans more than 20 years in the public and private sectors. In the public sector, highlights include Chief of Protocol of the Uruguay GATT Round. He also served as Director of Innovation and Quality at Nacional Financiera and Deputy Director General at Strategic Planning at the Mexican Secretariat of the Interior. He served as Commercial Counselor for Germany, Central and Eastern Europe at BANCOMEXT, Regional Director for Europe, Middle East and Africa at ProMéxico, and Ambassador of the United Mexican States to the Federal Republic of Germany.

What will be the cornerstone of your incoming strategy aimed at strengthening Mexico’s participation in the international economy? In line with President Peña Nieto’s five-pronged government strategy for a peaceful, […]

What will be the cornerstone of your incoming strategy aimed at strengthening Mexico’s participation in the international economy?

In line with President Peña Nieto’s five-pronged government strategy for a peaceful, inclusive, educated, prosperous, and globally responsible country, ProMéxico aims to build a prosperous and globally responsible Mexico by boosting investment, trade, and the internationalization of Mexican companies. Therefore, the strategy is to continue pushing Mexico’s foreign trade, diversifying both the goods and services that the country exports, and their destinations. Moreover, another relevant topic of our strategy remains in fostering value chains in the export sector. The concept of global value chains implies that production processes are no longer carried out in one country. Every process, from producing raw materials to transforming them into finished goods, is carried out where the skills, materials, cost, and quality conditions are best. By this logic, statistics of imports versus exports become less important and the relevant goal is to become the country that adds the largest value to the products, especially in knowledge-intensive and complex manufacturing processes. To attend to the call of the Secretary of Economy, Ildefonso Guajardo, Mexico is favoring regional economic integration by strengthening its global supply chains. In this sense, we are promoting our ACT model, which is a Spanish abbreviation meaning “alliance with multinational corporations.” It is a strategic alliance that identifies Mexican suppliers and puts them in touch with original equipment manufacturers (OEMs) and multinational corporations that demand their products or services. Through this program, we are fostering the domestic market and promoting direct and indirect exports. On the other hand, ProMéxico is hard at work to become the best ally of companies seeking to export from Mexico or to transfer their operations and productive investments to our country. ProMéxico strongly supports investment projects that generate opportunities and well-paid jobs for Mexicans, and aims to be a strategic facilitator for every project that comes into the country. Therefore, ProMéxico will strengthen its collaboration with local states, the business sector, and the academic sector, working hand-in-hand to generate more opportunities for growth and development.

The flow of FDI and international trade are key components of Mexico’s economy. What are the main strengths attracting foreign investment?

Mexico has positioned itself as one of the most attractive and profitable destinations for business development worldwide. There are at least five reasons behind this, including our favorable macroeconomic environment, the existence of a legal and regulatory framework that favors investment, the availability of highly skilled and specialized talent, our strategic location, and competitive production costs. Furthermore, Mexico has a highly productive export sector that is founded on the intensive use of capital and technology offered in our country. Mexico has proven it is ready to support more innovation and high-technology activities, given its highly skilled human capital and experience, as well as an economy that exports sophisticated products. Therefore, the goal is to support every sector in the country to help them move forward in their transition to more advanced and high-tech manufacturing, with a focus on boosting those industries that are able to generate more technology and knowledge transfer, such as the automotive, auto parts, aerospace, IT, electric-electronic, medical devices, and renewable energy industries, to name a few. Mexico is already a very attractive destination for these sectors. The goal is to seize this opportunity and further the competitiveness of these industries, attracting even more foreign investments that foster our supply chain. In this sense, ProMéxico plays a relevant role in strengthening our supply chains, as well as having a particular understanding of the challenges faced by companies in their export and investment processes abroad.

How will you be adapting ProMéxico’s services to optimize the support provided to the business community both at home and abroad?

ProMéxico has 36 offices abroad located in 23 leading economies that, in turn, represent over 70% of GDP. Moreover, ProMéxico has 29 offices in México, where several services can be provided. We have to adapt our services and key programs for the business community on a permanent basis, in order to provide personalized attention to our customers’ needs. In this sense, ProMéxico has become a strategic partner to promote the country overseas in trade- and investment-related areas. From 2008 until March 2013, it confirmed 437 investment projects by foreign companies in Mexico for multi-annual investments reaching $54.71 billion. They have gone into sectors such as automotive, electric electronics, aerospace, and renewable energy, and have come from trading partners like Japan, Spain, the US, and Germany, to name only a few. Since its creation, the Investment and International Business Promotion Unit at ProMéxico has supported over 5,000 companies and will be increasing this figure even more.

What sectors of the economy do you think hold particular potential in terms of strengthening Mexico as a contender to become Latin America’s largest economy?

Mexico’s commitment to promote growth via economic openness and competitiveness has been an essential factor to it becoming a leader not only in Latin America, but worldwide. Mexico is growing in the right direction and the country’s business environment is full of certainty and trust among the international community. In fact, our country is today one of the major players in the international arena. The structural reforms that are being promoted by the federal government are boosting Mexico’s position at the core of the world’s competitiveness. Furthermore, as a result of the country’s commitment to economic stability and free trade, Mexico has become a strategic platform to reach key markets around the globe. This openness has changed Mexico’s economic model. Before Mexico joined the General Agreement on Tariffs and Trade (GATT), our economic model was based on import substitution and the domestic market; and our exports at that time were mostly raw materials. Today, high- and medium-tech products represent more than 50% of our exports. This is a very different profile compared to the rest of Latin America, which is focused on commodities. Mexico’s commitment to the free flow of goods and services, as well as investment, has transformed Mexican industry into a globally competitive manufacturing hub, in sectors such as aerospace, automotive, electric-electronic, medical devices, and IT—to name a few. These competitive advantages are already flourishing under President Peña Nieto’s government. In fact, Mexico recently achieved record-high exports. Also, our GDP has the largest expansion in North America, with 3.9% real growth from 2011 to 2012. We are a country with clear stability, low inflation, and enormous opportunities for business and investment. In short, this is Mexico’s momentum; it is a leader and a country that always looks forward, full of trust, growth, and development.

What would you say are the key challenges that need to be addressed to enable Mexico to optimize its potential as an economic hub?

Mexico should continue promoting its high-tech sectors, such as the automotive, aerospace, electronics, and IT industries, which provide an important platform for advanced manufacturing and R&D projects. Today, Mexico is the third-largest exporter among the G20 nations for medium- and high-tech manufacturers. The country is also the leading exporter of these products in Latin America. In order to become a key player and also an economic hub in these sectors, we have to implement policies that endorse more innovation, as well as research and industrial development in the country, just as a starting point.

What is your outlook for 2013?

I am very optimistic for Mexico’s future. Currently, the country is very well positioned and continues to improve its advanced manufacturing capabilities, strengthening its internal market and consolidating domestic production chains. All these strengths have led to great results: analysts, consultants, entrepreneurs, and specialized media around the world agree that we have a stable and growing economy. Goldman Sachs, Nomura, HSBC, Accenture, and PwC, among others, estimate that Mexico will be between the fifth and eighth largest economy in the world in the years to come; however, we are working hard to leverage Mexico’s future even further. Our present administration is focusing on promoting reforms to the country’s regulatory framework—mainly in the education, finance, telecoms, and energy sectors—in order to encourage investment and competitiveness. I strongly believe that with all these efforts we will boost Mexico’s momentum. Our country is ready to face today’s challenges, and I agree with the various analyses that say that the country will become one of the strongest economies in the world in the coming years. That is the main goal of the strategies we are implementing at ProMéxico.

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