It is the third time that our country has left the index since its launch, which occurred in 1998.
For the second consecutive year, the country is out of the 25 most attractive nations for foreign direct investment, according to the Confidence Index 2021 of the Kearney firm.
For the second consecutive year, Mexico was left out of the 25 most attractive countries as a destination for foreign direct investment (FDI), according to the Confidence Index 2021 presented by the Kearney firm on Wednesday.
The United States, Canada and Germany remain the three most attractive countries for FDI; China fell from eighth place to 12th.
In the 23-year history of this index carried out by the Kearney firm, Mexico has not entered the Top 25 on three occasions: 2011, 2020 and this year.
“Although Mexico has promoted and has benefited from some initiatives, such as the ratification of the USMCA and the effect of nearshoring; With all the trend of US-China trade tensions, it was not enough for investors to consider Mexico as one of the main investment destinations, ”said Ricardo Haneine Haua, partner and CEO of Kearney Mexico, in a videoconference.
“The factors of governance, innovation, technology and transparency in the rules is what is limiting the potential we have to bring investments to other sectors where they have already committed and there is a lot of uncertainty, in terms of continuing to make this type of investment”, added.
Rates and ease of paying taxes, technological and innovation capabilities, as well as research and development; In addition to the effectiveness of the legal and regulatory process and regulatory transparency and lack of corruption are the five most important aspects that are taken into account when deciding where to make an investment, according to the index.
The federal government of President Andrés Manuel López Obrador has initiated a change in energy policy, focusing all batteries on state companies: Federal Electricity Commission (CFE) and Petróleos Mexicanos (Pemex).
“Centralizing and for the CFE to make energy allocation decisions, according to what is probably convenient, but that in the medium term is not convenient and does not favor clean energy is what national and international investors are fighting and that limits investment flows to make a modern energy sector, with lower costs and towards clean energy “, warned Ricardo Haneine while ensuring that the electricity sector” is fundamental for the development of the industry and is the platform for all information systems and digital infrastructure.
The reform of the subcontracting scheme (outsourcing) is also one of the points that has subtracted points to attract FDI.
In 2019, Mexico was placed in 25th place in the Foreign Direct Investment Confidence Index, to then be left out in the last two years. In 2003 it came in third place, recalled Haneine Haua.
Public policy decisions are needed that are consistent with the development needs that the country requires, as well as to potentiate human capital with an improvement in the educational system and continuous training and also to strengthen the subject of research and development is fundamental.
The factors that had already turned on the ‘hotbeds’ of alert last year when the index was released, continued to be pronounced with the changes in the rules of the game in the energy sector and changes in the flexibility of the labor market when trying to eliminate outsourcing.
Mexico must redirect “its efforts to regain investor confidence, despite the fact that the country has promoted and benefited from some initiatives such as the ratification of the USMCA, and the effect of near-shoring, was not enough to that investors classify the country as one of the main investment objectives, ”explained the specialist.
To the extent that public policies are adjusted to reduce negative factors, a change will be seen, but in the meantime, their pronunciation reduces what positive factors such as the Treaty between Mexico, the United States and Canada (T-MEC) can do
For the country to return to the top 25 of attractive countries for foreign direct investment, it is necessary to be strategic in new technologies for the manufacturing sector integrated into North American value chains, as well as to open new sectors, the use, and promotion of energy clean and research and development; in this last sector, Mexico allocates less than 1% of GDP.