Betting on Mexico’s Future Through Long-Term InvestmentWed, 11/15/2017 - 17:19
Even though Mexico is one of the largest emerging economies in the world, the global competitiveness of its infrastructure sector is rife with gaps that need to be filled, Carlos Méndez, National Vice President of Strategic Projects at CMIC, told the audience during his opening presentation on the second day of the Mexico Infrastructure & Sustainability Summit 2017 on Wednesday in Mexico City. “Infrastructure plays a crucial role in the economic growth of a country and its ability to attract investment,” he said at the Hotel Sheraton Maria Isabel. “The rise of the sector at a national level can help reduce production costs and boost the profitability of projects in the region.”
Méndez said there is a connection between a country’s development and the amount of capital it invests in infrastructure. “Between 1982 and 2016, the average growth rate in Mexico was 2.3 percent while China registered 9.8 percent, South Korea was at 6.4 percent and Chile at 4.3 percent. Mexico was also positioned at number 51 in the Global Competitiveness Index 2017-2018, released by the World Economic Forum,” he said. “These numbers show a lack of efficiency and productivity.” While the Inter-American Development Bank recommends Latin American countries invest at least 5 percent of their public budget on infrastructure, the region only invested an average of 2.6 percent.
The lack of infrastructure can also impact the cost of production. “In proportion to the cost of merchandise, infrastructure inefficiency can raise the costs of logistics. In this matter, Mexico is behind countries like the US.”
To combat and fill in the gaps in the industry, CMIC proposes a 2030 National Infrastructure Plan based on forums, studies and the integration of projects. “At the moment, very few projects are transexennial,” he said. “We want to help widen the vision of the sector and as part of the construction industry we are working on making this a reality.”
Through the long-term plan, the chamber hopes to show the country’s governing administration the importance of having better public policies in construction. “Aside from investing more in the country’s infrastructure, Mexico needs to improve its efficiency,” Méndez said. “There should be more transparency in contracts and the quality of projects need to improve through public policies based on an integrated diagnosis of the sector.”