As of the third quarter of 2022, Mexico registered a record of over $32 billion in foreign direct investment. Moreover, the country’s business leaders expect Mexico to lead Latin American direct foreign investment in 2023.
Mexico is the door to Latin American investment
According to business representatives interviewed by the Spanish news organization EFE, Mexico could become the investment center for the entire American continent
“Mexico can be a great door (investment) for North America and South America,” said Francisco Cervantes, the president of the Business Coordinating Council (CCE), in the context of a meeting of the business council of the Pacific Alliance that was recently held in Mexico City.
At the meeting, Mexican business leadership, which contributes significantly to the country’s gross domestic product, indicated that Mexico must increasingly build confidence in its security situation and climate for business so that foreign direct investments “continue landing.”
Cervantes also considered that it would be vital for investments to increase in the south-southeast sector of the country where there is greater economic need.
He commented that it is anticipated that the primary beneficiaries of the realignment of supply and value chains in the world are Mexican micro, small and medium-sized enterprises (MSMEs), which will be able to take advantage of Latin American investment in “nearshoring” (outsourcing) to grow.
Record of leading Latin American investment
According to data from the Mexican Ministry of Economy, as of the third quarter of 2022, Mexico successfully captured a record 32.1 billion dollars of foreign direct investment.
The president of the Employers’ Confederation of the Mexican Republic (Coparmex), José Medina-Mora, observed that Coparmex members signed the Guadalajara Declaration with business organizations in Latin America, which, among other activities, promotes the flow of investments between Latin American countries. Mexico’s active participation in these international efforts is critical to maintaining its leading Latin American investment record.
“In addition to Mexico, the Guadalajara Declaration was signed by business organizations representing Chile, Peru, and Colombia. These are the nations that form the Pacific Alliance. In addition to these three nations, there is interest from other countries that are currently observers of the Alliance. These include nations such as Ecuador, Argentina, Uruguay, Paraguay, and Brazil”, he shared.
Medina-Mora expressed that it is necessary to establish a new regional model characterized by inclusive development, “not just for Mexico, but for Latin America.”
We are convinced that economic development is necessary, but more is needed from the business sector to attract more Latin American investment. Economic growth for the region has to go hand in hand with social development,” Medina-Mora said.
Within the framework of the meeting of the business council of the Pacific Alliance, the Mexican Secretary of Economy, Raquel Buenrostro, assured that “those companies that look to Pacific Alliance countries as a prosperous destination for their investments will find the conditions are in place for expanding their bottom line.”
She stated that member countries of the Pacific Alliance are eager to “carry out foreign direct investment projects by facilitating their landing and expansion in Latin America. “We are interested in the prosperity of the companies that settle in our countries and that share with us in this common objective,” added Buenrostro.
In an interview with EFE, Pedro Furtado de Oliveira, director of the International Labor Organization (ILO) for Mexico and Cuba, considered that the new labor laws in Mexico establish a solid base to attract foreign direct investment that generates more decent jobs. As a result, he anticipates that Mexico will continue to be the leader in Latin American investment.
Recently, not only has there been interest expressed by companies in South and North America, but Mexican businessmen themselves have raised their hands to, in the same way, promote increased investment in the country to keep its position of leadership in capturing Latin American investment
Mexico seeks investment in wind energy
This is the case of the Mexican Wind Energy Association, which indicated an opportunity and investment in wind infrastructure in the country of approximately 15 billion dollars in the coming years. Wind projects are aimed at decarbonizing the Mexican economy.
Likewise, the Confederation of Industrial Chambers ( Concamin ) assured the landing of the necessary investment to install factories that produce lithium batteries. Projects of this type will promote the transition to electric vehicles, as the Mexican Government intends, declared José Abugaber, president of said organization.
According to the Mexican Ministry of Economy, more than 400 US companies in Asia could move their plants to Mexico. The “nearshoring” trend will drive this Latin American investment. In addition to foreign direct investment captured from US firms, the Mexican Ministry of Foreign Affairs anticipates additional FDI of more than 6 billion dollars from companies from China and South Korea.
