Prepare Local Business Or Others Will Step InBy Jan Hogewoning | Thu, 03/26/2020 - 17:50
Q: What are the administration’s priorities in terms of economic development for the state of Veracruz?
A: Our priorities are to lay the foundations for sustained growth. The primary focus is on large infrastructure projects that will support the state economy. The federal government has committed to significant investment in the Port of Veracruz, the Ixachi oil and gas field and the Tehuantepec Isthmus project. We want to complement those investments with our own. We also will work to ensure that these projects result in commercial opportunities for our local communities. The work on these infrastructure projects is starting this year, but we have already started to stimulate growth by improving customs services at our ports.
Q: What impact will the state’s new debt restructuring plan have on public finances and the state’s economy?
A: The last state administration had a track record of badly managed public resources. This produced significant debt and a drop in investor confidence in the state. The proposal to restructure the state’s debt, passed by a majority of the state’s Congress, will refinance 11 loans to be paid over 20 years. This has freed up resources for important public projects. We complemented the debt restructuring with an austerity bill and a planning bill. These aim to generate fiscal discipline and ensure that spending is coordinated going forward. Previously, many public investments, either at the state or municipal level, did not lead to anything. With the Plan for the Development of Veracruz, our goal is to bring parties from different levels together to avoid wasting resources and enact real change. Often municipal bodies do not have the resources or capabilities to get things done and the state can step in to help. Significantly, our plans have received bipartisan support in the state Congress. With this level of consensus, we hope to achieve long-term sustainable growth. For now, our efforts appear to be paying off with the state’s credit ratings already improving. The goal is to demonstrate to investors that we are on a different path and that there are many opportunities in Veracruz.
Q: How are you supporting SMEs in the state?
A: We are working with the Ministry of Economy and the Chambers of Commerce of Veracruz to train and finance small businesses in different trades and to prepare them for new opportunities that will come with the major federal projects. One potential client is PEMEX, which will need various services to support its new activities. If we do not prepare local businesses now, others will come from out of state. Training and financing are there to help lift the technical capabilities of our companies, as well as their production and storage capacities.
With respect to the economy as a whole, we believe it is very important to improve the regional roads that connect remote communities with principal highways. This will allow producers of all kinds, such as farmers, to transport their goods to their distribution points, from where they will be transported to big cities, to the US and to ports for export. Without these improvements, transportation costs will be more expensive, leading to higher costs of final products.
Another area is healthcare, which also goes hand in hand with good road infrastructure. For many rural areas, health centers are far away. Better roads will allow patients to reach health centers faster. At the same time, we have to build new centers closer to these areas and ensure that they are stocked with adequate medications and teams. Finally, we need to ensure the availability of drinkable water. Currently, we are looking at upgrading a lot of hydraulic infrastructure.
Q: What are your priorities for 2020?
A: We will continue to work on improving our financial indicators and regaining the trust of investors. We may have crafted an impressive debt restructuration plan, but we remain behind compared to states such as Chihuahua or Coahuila. However, it is only a question of time before our financial health improves. It is also very important to regain the trust of the people from Veracruz. Why would they be willing to pay taxes if they feel that the government will waste the resources? Our main challenge is to show them that we are committed to improving their lives.
José Lima has occupied different roles in Mexico City’s and Veracruz’s state administration, as well as in the federal government