Overcoming the COVID-19 Pandemic By Building Differently
STORY INLINE POST
Globalization allowed companies to place each step of their production chain in a different country, which cheapens costs by benefiting from comparative and competitive advantages. However, these global production chains were unprepared for a world catastrophe, such as the COVID-19 pandemic. Governments shut down economic activities, causing millions of people to lose their income, disruptions in the global value chains, shortages in some products, and backlashes in some sectors. For example, there is still sub-production in semiconductors chips that has forced some automobile companies to use old technology to keep their production lines active. According to the World Bank, the world’s economy decreased 3.6 percent in 2020, and Mexico had its worst year since the Great Depression, with a fall of 8.2 percent in its GDP.
However, 2020 was not exclusively about bad news. For some sectors, such as health, digital industries, videogames and online sales, the situation represented an opportunity to grow. Moreover, the digital adaptation expected to take place in a decade accelerated as a result of the necessity to work from home, leading many people to acquire new computer equipment and companies to implement online platforms that allowed their employees to do home office.
From the last quarter of 2020, economies started to recover. Nevertheless, this recuperation is not bringing us back to the old status quo. Many companies are thinking of moving their plants to other countries, now considering not only costs but safety against disruptions in the global value chains. This situation, summed up by the new rules of the USMCA, presents a massive opportunity for Mexico to insert itself in global value chains and attract foreign investment.
With the purpose of attracting this reallocation of companies to Mexican territory, motivating investment that is already in Mexico to stay, and paving the way for entrepreneurs who are considering our country for their projects, since May 3, 2019, the Ministry of Foreign Affairs of Mexico has been responsible for carrying out economic promotion and investment attraction activities.
The mastermind behind the project that would embrace these new functions is Javier Jileta, my predecessor. His vision was finally materialized on June 14, 2021, as the General Directorate of Global Investment (GDGI), which I have the honor to lead with the support of Deputy Minister for Multilateral Affairs and Human Rights at the Ministry of Foreign Affairs of Mexico Martha Delgado and Minister of Foreign Affairs Marcelo Ebrard.
As such, GDGI assumes the faculties of the now-extinct ProMéxico for promoting Mexico’s strengths abroad, while the Ministry of Economy inherited the responsibilities of capitalizing on the opportunities from within.
GDGI is based on three pillars: economic diplomacy, foreign investment, and market diversification. With these, we seek to be the link between international and private sector organizations, the three governmental levels and the more than 160 Mexican diplomatic missions abroad to connect national companies with foreign commercial opportunities and facilitate the establishment of capital in our country. To take the best from our efforts, we identified six priority sectors: mobility, life sciences, aerospace, infrastructure, agribusiness, and digital industries, although our scope is not limited to these. GDGI also accompanies and guides companies in the process of internationalizing their projects.
I would like to highlight that we work together with the United Nations Development Program (UNDP), which helps us align these projects with the Sustainable Development Goals of the 2030 Agenda and support our strategies on principles of equality, inclusivity, human rights, and gender perspective.
Finally, GDGI designs and implements projects that facilitate economic promotion and investment attraction. We are working on six projects with different degrees of progress and implementation:
- Provision of vaccines and healthcare. Through the diplomatic channel, we continue the search for vaccine supply opportunities for the health system in Mexico. Likewise, we have a good relationship with COFEPRIS that has helped us increase clinical trials in our country, boosting pharmaceutical innovation and technology transfer.
- Atlas of prosperity. In a joint project with UN-Habitat, we mapped strategic sectors to identify investment opportunities and territories with the potential to participate in the global value chains. As of October, this information will be available for public use.
- California Economic Council. In the coming months, we will establish a mechanism for formal, systematic, continuous, and permanent dialogue between the central office in Mexico and the Mexican consulates in California to promote the commercial interests of our country among the business community in the US state.
- Study of automotive sector electrification. We will identify the requirements and critical steps to move toward the production of electric vehicles in Mexico. This information is aimed at governmental authorities, academia, and the Mexican and American automotive industry.
- Promotion of the priority projects for the Mexican government. Through diplomatic channels, we search for investors who want to bet on the priority projects of this government, mainly the Tren Maya and the Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT).
- Strategic attention plan for Europe and Asia. We pay special attention to some countries identified as priorities for their potential for economic activity with Mexico, through the appointment of a regional coordinator for each continent.
GDGI focuses on yielding international economic development opportunities for Mexico that, among other benefits, facilitate economic reactivation and bridging inequality gaps. We are open and eager to work with all companies interested in strengthening their links with global partners. This General Directorate will be an excellent ally for your business in Mexico and abroad.
Let me know your comments.
In collaboration with Marisol Torres