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News Article

Alianza Federalista and CONAGO: State Counterweight Movement

By Alessa Flores | Wed, 09/09/2020 - 15:56

On Sept. 7, the governors of 10 states announced their departure from the National Conference of Governors (CONAGO), which functions as "a permanent institutional space to achieve a greater balance and better distribution of the powers of the federal and state governments.” The reason for this is that governors believe that "CONAGO is no longer fulfilling its role.” Their departure led to the creation of Alianza Federalista (Federalist Aliance) and the Invest in Mexico Promotion Agency to attract investment to the country. 

According to CONAGO, its main responsibility is to promote the strengthening of states so they can contribute more to national development and have the resources, as well as, the capacity to respond to the demands of their communities without political distinction. Omar Fayad, Governor of Hidalgo and member of CONAGO, explained in a press conference the importance of unity among governors. "I believe in unity, I do not think we should be dividing, fighting or taking political sides to this issue. It is not a time to fight but to be united," Fayad said in a note from El Universal.

Alianza Federalista brings together José Rosas Aispuro, Governor of Durango (PAN); Enrique Alfaro of Jalisco (Movimiento Ciudadano); Silvano Aureoles of Michoacan (PRD); Francisco Javier García Cabeza de Vaca of Tamaulipas (PAN); José Ignacio Peralta of Colima (PRI); Miguel Ángel Riquelme of Coahuila (PRI); Jaime Rodríguez of Nuevo León (Independiente); Diego Sinhue of Guanajuato (PAN) and Martín Orozco from Aguascalientes (PAN). The rupture was not only because of CONAGO but also the result of a political division, since most of the governors representing Alianza Federalista belong to the PRI and PAN parties. Meanwhile, the governors who remain in CONAGO belong to MORENA, PRD, Partido Encuentro Social, as well as PRI and PAN. 

According to the National Foreign Investment Registry of the Ministry of Economy, foreign direct investment (FDI) in 1Q20 was US$10.3 billion. The investment came mostly from the US (38.9 percent) and other countries such as Spain (14.3 percent), Germany (9.4 percent), Canada (7.2 percent), the Netherlands (4.6 percent) and the remaining 25.6 percent from other countries. Manufacturing was the sector that received the most FDI since it concentrated 44.1 percent of the investment, followed by other sectors such as finance (24.9 percent), commerce (8.3 percent), energy (5.1 percent), mining (4.8 percent) and construction (4.4 percent).

In terms of investment, Mexico City, led by Head of Government Claudia Sheinbaum, has positioned itself as the state with the greatest attraction and concentration of FDI in the country, with more than US$7.8 billion entering the capital, according to figures from the Ministry of Economy. In second place was Nuevo Leon with an FDI of US$3.1 billion and in third place the State of Mexico with an FDI of US$2.95 billion. In addition to this, the Ministry of Economy highlighted that since 2015, Mexico City, the State of Mexico and Nuevo Leon have remained in the Top 5 in attracting FDI in the country.

Regarding the states' contribution to GDP, INEGI revealed that in nominal terms, Mexico City, the State of Mexico, Nuevo Leon, Jalisco, Veracruz, Guanajuato, Coahuila, Puebla, Chihuahua, Sonora and Baja California together contributed 66.2 percent of the national GDP. Mexico City once again positioned itself in first place in this area, as it accounts for 16.4 percent of the national GDP, followed by the State of Mexico (8.8 percent), Nuevo Leon (7.6 percent), Jalisco (7.1) and Veracruz (4.5 percent). It should be noted that the 10 states that represent the Alianza Federalista concentrate 31.5 percent of Mexico’s GDP contributions and the remaining is concentrated in the states belonging to CONAGO. 

Finally, in terms of employment, INEGI reveals that Mexico has more than 54 million employed. Of that total, Mexico City alone concentrates 7.8 percent of the employed population. This is followed by Jalisco, Veracruz, Puebla, Guanajuato, Chiapas and Michoacan. In addition, the best jobs in Mexico are in Baja California Sur, Nayarit, Michoacan, Sinaloa and Coahuila, because they concentrate more than 60 percent of well-paying formal jobs, according to the Employers' Confederation of the Mexican Republic (COPARMEX). 

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Alessa Flores Alessa Flores Senior Journalist and Industry Analyst