Federico Cerdas
Global Businesses Inc.
Expert Contributor

Main Challenges for Job Creation, Public Policies in 2021

By Federico Cerdas | Tue, 04/06/2021 - 09:12

The construction sector is one of the main creators of jobs in Mexico and one of the greatest contributors to Gross Domestic Product (GDP). Just in 2019, the National Institute of Statistics and Geography (INEGI) said there were over 6 million jobs related to the construction industry.

However, the poor performance of public policies when facing the health and economic crisis resulting from COVID-19 in Mexico led this and other sectors to stop their activities and, as a consequence, to lose millions of jobs.

After almost one year of the WHO releasing its statement on COVID-19 and several confinement periods, the questions are: How are we going to reactivate the construction sector where so many companies have had to close down for good? How are entrepreneurs of all sizes being supported so that they can recover their income and, therefore, create new jobs?

The health situation is complex but the economic situation is even worse. Without any immediate actions by the federal and state governments, we Mexicans won’t be able to pull through. Throughout 2020, it has been proven that business leaders have done their very best to keep their companies afloat.

More tax incentives are required to reduce the financial pressure on Mexican businesses and families. Moody’s recently stressed that, in the absence of material support from the Mexican government, income and employment levels will continue to fall, resulting in a higher number of bankruptcies; therefore, it is essential that both the government and business leaders work together.

In the construction sector, a faster issuance of permits would create not only more jobs but also lead to faster results. By means of this and other actions, we would provide certainty to a sector that wants to invest in several public and private projects.

Our work and greatest challenge is to promote the opening of the commercial banking system and create conditions of trust to attract investment. USMCA and the new administration in the White House mean a new opportunity since they are among the strongest tools we have.

With the COVID-19 crisis, investment previously earmarked for the Asian market has changed direction toward Mexico due to two main factors: investors realized that having manufacturing plants on the other side of the world was not optimal and that the logistics cost has no comparison given our proximity to the US.

The industrial real estate sector is and will continue to be one of the most favored segments after 2020, for which reason the construction of industrial parks and facilities will allow more national and international companies to position their production on Mexican territory.

Likewise, one of the biggest opportunities in Mexico is its demographic bonus, which leads to the strengthening of the housing segment, since the need for a home does not stop and we have a very large deficit that we must cover, taking into consideration the new requirements this pandemic has created.

However, this will not be possible if we are unable to create trust by means of public policies focused on the economic growth of the country, the safety of investments and the creation of jobs.

It is of utmost importance that when the López Obrador administration’s term is over, the successful policies, negotiations and/or projects already reached continue, since it is not healthy for ideas to change every six years. Clarity, and especially certainty, must be guaranteed if we wish to move forward.

Mexico is a great country with a bright future. We need to understand that there is no way to succeed if we are not able to deploy public policies aligned with the need of job and wealth creation. That is the only way to end our endemic poverty, insecurity and access to healthcare issues.

Photo by:   Federico Cerdas