Eduardo Ramírez
View from the Top

Msmes Priority for Future Development

Thu, 01/11/2018 - 10:39

Q: What is CMIC’s perspective of the construction industry in the years to come?
A: CMIC represents over 12,000 construction companies of all sizes across Mexico in 44 delegations. Approximately 95 percent of the companies affiliated with CMIC are MSMEs. One of the main goals of the chamber is to provide these companies with the tools necessary to develop and grow. Micro and small-sized businesses have more difficulty growing and expanding their reach than medium and large companies. We offer constant training to these businesses. Most of these are also extremely interested in public works, but the sector has shown more growth through private investment.
Years ago, approximately 5 percent of GDP was destined to infrastructure development. Today, the government is only investing 2.8 percent of the GDP, which totals MX$625 billion for the construction of public infrastructure. Private works have increased in the last few years and it is predicted that MX$2 billion will be invested by the end of 2018.
Q: What has been the main factor holding back the country’s construction sector?
A: It is very difficult for a country to develop sustainably without implementing the proper planning. The country desperately needs a long-term planning strategy. Government priorities mean an administration generally creates projects for its own political term only, leaving the country with unfinished projects. Infrastructure gives a country credibility in terms of productivity and competitiveness. CMIC believes that the country needs a National Infrastructure Council composed of academics, public and private sector players. Within this council, there should be a planning institute with a certain amount of autonomy in planning, not execution, of infrastructure projects. Most of the planning required for an infrastructure project should pass through this institute.
Government agencies are joining forces to develop this planning structure that will help improve the quality of the transport infrastructure and connectivity of the country. Companies need certainty that they will be able to grow in the future. These companies must be able to prepare themselves, obtain loans and innovate according to what will happen in the future. All construction companies that participate in public works provide 0.2 percent of their profits for training, which has permitted the creation of CMIC’s training institutes.
The chamber wants to invest as much as possible in creating specialized training and teaching institutes for the industry. There needs to be more communication between the different agencies, meaning the water, housing, energy, telecommunications and road infrastructure need to work more closely together. Today, there is no planning that aligns the goal of making the country more competitive through infrastructure development.
Q: What impact will MSMEs have in bridging the country’s infrastructure gap?
A: We want to work closely with local governments to continue promoting the development of MSMEs in the construction sector. If these companies have more work, they can spark a value chain that will not only increase the value of the industry but the economic power of that area. The construction industry creates more than 6 million direct and 2.8 million indirect jobs in Mexico. It is a strategic sector for the country’s growth but planning continues to be a hindrance.
Long-term planning will allow our MSMEs to truly develop to their full potential. For many years, some municipalities acquired huge debts and now the funds they have are allocated to paying off those debts. There is now a financial law that dictates the requisites a government must fulfill before obtaining credit. This will help organize the country’s finances. PPPs are also a ray of hope and will help bridge the country’s infrastructure financing gap. Mexico has complex problems it needs to solve, such as corruption and insecurity, but there are many business owners and citizens who are ready to put their best foot forward.