Luis Rubio
Opportunities are opportunities when they are taken advantage of and summarily assumed, because contrariwise they simply are not. At the same time, no governmental or national action constitutes a panacea. Nearshoring is a great potential opportunity if Mexicans know how to take advantage of it and convert it into an instrument for the accelerated development of the economy. But it will only materialize if we come to understand what it implies and accept the whole package as such.
Throughout all the months that the so-called “category 2” was the norm for Mexico on the part of the U.S. civil aviation authorities, the real issues that differentiated the perceptions of the authorities across the border were not practical (whether about runways or peripheral airport boundary walls, security procedures or flight controllers) but instead cultural. Mexican authorities in the matter did not perceive any need to accept the de facto jurisdiction that implied “category 1.” Not until it was understood that the complete package had to be accepted did the wheels begin to turn, which ended up reestablishing a functional relation between the aviation authorities of both nations.
The matter repeats itself in all ambits, each with its own characteristics and relevant actors. The U.S. constitutes a great opportunity for Mexico’s development because of its dynamism, size and wealth, as exhibited by the extraordinary engine of the Mexican economy that exports have become from the first Free-Trade Agreement (NAFTA) more than three decades ago. The neighborhood in which geography has situated Mexico constitutes an enormous opportunity, one that is at present magnified by the China—U.S. conflict, the latter conferring primacy on Mexico with respect to attracting investments, provided Mexico realizes how to take advantage of it: it will not materialize on its own.
Although there has been important growth in the installation of new plants in diverse points of the country, above all in the north, the truth is that the numbers are very small. The government has boasted about the growth of foreign investment, but the overwhelming majority of that growth has been the reinvestment of profits, not new investments. The question is what has been lacking.
The challenge resides in a basic option: accept the nature of the correlation of power between the two nations or pretend that Mexico can be successful on its own. In the case of nearshoring, the relevant actors are not governmental but business: those who would invest are hundreds or thousands of enterprises of diverse sizes that would be seeking the opportunity to improve their productivity, guarantee the quality of their products and count on the certainty that the entire process, from the investment to the delivery of the goods to the final consumer, is going to be perfect. This involves factors as simple as or as complex as: security, physical infrastructure (industrial parks, highways, border crossings), the availability of electricity (and many potential investors now demand clean energies), amply trained personnel (which implies an educational sector oriented toward the integral development of the people, not one devoted to their ideological evangelization) and transparent and reliable rules of the game (that is, judicial mechanisms for conflict resolution and making contracts be complied with). Above all, no differentiation between national and foreign investment, in that both assume risk in the same way.
Judging by the patterns of migration (from south to north), the expectations of those with relatives in the U.S., the remittances, the investments and the financial flows, the citizenry is not confused: the relationship with Mexico’s neighbor to the north is seen by all as an opportunity. Nearshoring raises that possibility in dramatic fashion due to the total and potential volume that it entails. If in addition the government dedicates itself in eliminating obstacles to investment and to the creation of an industry of Mexican suppliers committed to offering parts, components, services and so on, to the new investors, the circle could be virtuous and would involve millions of Mexicans who today do not perceive for themselves any opportunity at all. The point is that this concerns a prodigious potential opportunity, but only if we know how to seize it. And to seize it would imply a complete transformation of the manner in which the government perceives economic activity, foreign investment and the creative potential of millions of Mexicans who could end up being prosperous entrepreneurs.
I began by saying that nearshoring is not a panacea, but instead a mere opportunity if we know how to take advantage of the circumstance. Well-conceived, it could be a great opportunity to improve the access of many Mexicans, currently excluded, to the formal economy, open opportunities for new entrepreneurs who frequently find much better terrain for prospering in Chicago or in Los Angeles than they can in their own country. That is, this is an opportunity that ties in with the criteria of equity and fighting poverty and inequality, which comprise the essential thrust of the next administration.
Leonard Cohen seemed to be thinking about Mexico and nearshoring when he coined his famous phrase, “There’s a crack in everything. That’s how the light gets in.” The challenge is to convert the crack and the light because that’s where the transformative opportunity slips in.
@lrubiof