MEXICO - Diplomacy
Former President of Mexico and Director, Centro Fox
A graduate of Iberoamericana University, Vicente Fox gained a bachelor’s degree in business administration at its campus in Mexico City, and a diploma course in senior management taught by professors of Harvard Business School. In 1964, he joined the firm Coca-Cola de México as a route supervisor. He eventually became regional CEO of the company for Mexico and Latin America, the youngest person to hold such a position in the firm. In 2000, Mr. Fox became the 55th president of Mexico, serving until 2006.
Colombia is active now, and the government is positive about opening up markets. Up until now, it has only approved medical and not recreational use, but Khiron is leading in the medical segment; these are young millennials with an aggressive vision for the future, which is why I see it moving quickly. In all my visits, where it has been legalized, I see two leaders: Canada and Colombia. Mexico is a close third and has accelerated its pace with the change of government. The former government was hesitant and slow and put medical use under pressure. The new government is liberal and is clearly promoting a change.
In my time in government, there was no other choice than prohibition and illegal markets, so there was no evaluation of what happened before. It only developed the use for illegal purposes, which really complicated the situation in Mexico and generated extreme violence, especially given the product’s transit from Colombia, Peru, and Venezuela heading north, a migration that included all drugs. That brought a very tough war to Mexico. It was not until recent times, after I left government and became an activist promoting openness and the legalization of markets, that legalization as a trend has gained a lot of traction. Since this will not go backwards, we are all getting ready to accelerate the development of the market.
There are great opportunities ahead, especially with medical use because the investment in research of medicines and legal drugs is impressive, and billions of dollars are being invested to improve the different uses of the plant. This is bringing in new solutions and response to patients and consumers. Colombia and Canada are leading in medical usage, and this change of paradigm is moving it out of underground illegal crime and the hands of criminals and putting it into the hands of entrepreneurs, farmers, and businessmen, a total change for the better. That is the change you see when you move from prohibition to an open legal market as the investment flows become credible and companies are put under professional management. A veritable revolution has occurred, and people in the industry are behaving extremely well with a high sense of responsibility and imposing codes of ethics and standards of quality. After so many years underground, it is just like any industry today.
Once it is a part of a normalized economic sector, you get farming, harvesting, processing, manufacturing, commerce, and trade, all of which bring in job creation and space for innovation and creativity, not to mention a lot in tax revenue. Everything is proving to be great, and I have been recommending all those who are setting up the new NAFTA rules to consider this economic sector as a critical part of the pact, as it needs to be standardized. For those leading countries and economies that decide to take the step forward and participate in this business, more and more are getting public opinion support, and those who were once afraid are now accepting because we have been watching after the markets. In the countries that have opened up, only good things have happened.
Like everything else in economic development, you look at the markets that are already open and legal and chart their relative successes and failures. It is excellent to take advantage of all these experiences, and this is where I have been active. I would put a strong word of caution that this industry needs to be more responsible than others because one mistake or bad company could spoil it for everybody. The credibility of this industry has yet to be granted, so people must remain on their best behavior. I came to Khiron because of that. We have identified both of our positions in the industry and are like twin souls with strong principles, values, and ethics on the way that we look at it. We are not here only to make money and serve customers, but to solve patients’ problems. When you have that target then everything flows correctly, which is what is happening. Khiron has very strong ethical standards so we will work with all the producers with several purposes in mind. One is to keep a high reputation for the industry and make sure that we do not have bad corporations in the industry. Another purpose is to expand the industry at a very dynamic pace. We first need to grow the size of the pie and then each competitor will take its share. Right now we are working for the industry more than our own specific company. We have to confirm and organize the industry and have associations of producers, manufacturers, and retailers so that we have a common united front to work with the authorities. This is a highly regulated industry so it will need an organized industry to fight for the good things.
This is an irreversible trend and is not what it used to look like. The industry is vastly different when conducted by professionals and university graduates than by criminals. Third, I would tell leaders everywhere to be close to the markets and learn what is going on. In these 10 years, I have never heard of anyone dying from cannabis; on the other hand, billions have perished from alcohol, sugar excess, and cigarettes. This industry is working with a great sense of responsibility. What we need most is favorable public opinion.
Mexico is the most open country in the world, with 48 trade agreements. Our trade balance with the US and Canada is impressive, at nearly USD1 trillion, the largest in the world. We are an open economy and promote open trade with no restrictions. We have had the change with Trump, who came in and disrupted in a negative way by working with a completely ignorant economic position by forgetting that trade is a win-win situation for both economies. He is totally wrong with his position, which poses a serious threat to Mexico’s development. This is why we are already working with new partners on new trade deals. Fortunately, after negotiations and discussions we reached a new NAFTA for what will hopefully be the next 25 years, though merely a week later this crazy guy Trump was threatening everything again and saying he would close the border for automobile imports and impose tariffs. We have to be on guard at all times now and keep the diversification process.
We used to have a trilateral agreement between Mexico, Colombia, and Venezuela, which Venezuela unfortunately left. Fortunately, however, we still have our own agreement between Colombia and Mexico, and trade among us is growing trade every year. We have a great friendship and working relationship from which we are benefiting. Right now, for instance, Khiron is going to be using the model already tested in Colombia in Mexico, so I hope Colombia keeps its pace of growth. That is why Colombia, Peru, Chili, and Mexico will be Khiron’s target growth markets in 2019.
For next year we see possibly that the US economy will go down which immediately effects Mexico and all of Latin America. We do not have high expectations for growth next year because of that reason, although Mexico has a very strong economic position together with the United States and Canada. We also have the strongest and largest manufacturing cluster in the region, larger than the rest of Latin America. Mexico is very competitive, has a very strong economy that always respects the fundamentals with interest and inflation rates under control. This gives us the guarantee for a good future ahead but we have two big problems in corruption and violence. They are linked together because the cartels are so strong economically speaking that they can corrupt government authorities, municipalities, governors, and members of the armed forces. It is very difficult to compete with the powerful cartels that operate in Mexico, as they get from the US market USD55 billion. This makes them more powerful than many economies in Latin America, and we have to compete with that which is the challenge that Mexico has to overcome. Legalization will be very helpful in the fight against the drug cartels as taking the plant away from them is part of the solution and through legalizing cannabis we will be stopping crime, violence, and cartels.
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