Puerto Vallarta (PVDN) – Inadequate infrastructure, ongoing security issues, and a limited supply of essential services like water and electricity are the main obstacles standing in the way of Mexico’s private sector’s potential to attract nearshoring investment.
José Abugaber, President of the Confederation of Industrial Chambers of Mexico (Concamin), emphasized that the sector’s leading requirement is ample electricity from eco-friendly sources. Legal certainty for investments and adherence to rules to protect incoming capital are crucial, he added.
“We are ideally positioned to benefit from the reshuffling of supply and production chains. The industry is more than ready to increase the domestic content of products labeled ‘Made in Mexico’,” Abugaber noted during the 2023 Industrial Meeting.
In a similar vein, the Business Coordinating Council (CCE) underscored the significant challenges that need to be addressed to bolster investment attraction and capitalize on nearshoring. Investment in infrastructure and reassurance for T-MEC partners ranked high on their list.
CCE asserted that strengthening infrastructure related to energy, water, customs, and connectivity in the short to medium term could exponentially enhance opportunities in the North and Bajío regions of the country. The same holds for the South-Southeast with the Transisthmic Corridor project.
The Confederation of Chambers of Commerce, Services and Tourism (Concanaco-Servytur) concurred that addressing security concerns and upholding the rule of law is a prerequisite to attracting investment to Mexico. Regulatory enhancement and the specialization of human capital via digital transformation are key to luring more Foreign Direct Investment (FDI), they argued.
“Robust infrastructure is pivotal in drawing investment and leveraging the advantages of trade agreements. The lack of sufficient infrastructure, particularly in the realm of energy, could mean missed lucrative investment opportunities, as companies need it to function at peak performance,” the business body clarified.
Meanwhile, Salvador Portillo, President of the National Chamber of Electrical Manufacturing (CANAME), predicted that Mexico could potentially attract about 50 billion dollars over the next 5 to 10 years from companies relocating. However, the insufficiency of infrastructure and services may hinder these opportunities.
“We have an enormous opportunity, but our infrastructure readiness to seize it is lacking. Businesses set up where they have access to electricity, water, and telecommunications… not where the authorities dictate,” Portillo remarked at the Concamin event.
He pointed out that firms currently located in China are looking to move to Mexico’s northern border, which needs adequate support considering its lack of electricity and water. “We have the technological means to remedy this, but it requires the resolve to do so,” he maintained.
Finally, Abugaber urged authorities to solicit their input on national issues. In light of recent reform initiatives, he appealed for a space for dialogue to fully consider their concerns and potential repercussions.
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