In the prelude to a change of Government and the debate on a structural reform of the Judiciary in Mexico, the subregional office of the Economic Commission for Latin America and the Caribbean (ECLAC) advocates a change in the country’s public policies for productive development . After an analysis of more than two years with academics, spokespersons for civil organizations and public and private actors, the multilateral organization has published the document Key issues for designing and implementing a sustainable productive development policy in Mexicoa study that proposes a change in the industrial paradigm towards a State that is much more open to consensus with experts and companies, but which also strengthens its role as the guiding axis of efforts to achieve sustainable, more equitable and transparent development.
Jorge Mario Martínez-Piva (Alajuela, Costa Rica, 56 years old), official at ECLAC’s subregional headquarters in Mexico, explains that decades ago, industrial change had productive fragmentation, the market, and commercial and financial liberalization as its banner. However, he warns that a reconfiguration of these productive chains has already occurred due to relocation to nearby countries, as well as the technological revolution and climate change.
In a country where there are still more than nine million people in extreme poverty, according to official figures, the ECLAC spokesperson in Mexico recognizes the challenges on the horizon that the Government of Claudia Sheinbaum will face in economic and industrial matters, however, He is also confident that implementing a productive policy according to the local needs of each State or region will result in a better distribution of wealth. The document, signed by ECLAC, is not intended to remain on the shelves of the academy or stored in some drawer; on the contrary, the organization will look for the president-elect in the coming days to present these proposals in greater detail.
Ask. What were the main challenges in putting this new proposal for sustainable productive development policy in Mexico on paper?
Answer. In order to develop, Latin America must industrialize, abandon traditional forms of low-productivity production and move toward new ones. What we are doing now is updating the proposals of ECLAC. In this case, in Mexico, we started two years ago and given that productive policies are so complex, we decided to hold roundtable discussions with different actors from both the public and private sectors, and something very important was that in the document we focused on consensus.
P. What was the consensus they reached?
R. There is a consensus that it is necessary to carry out a productive policy in Mexico because doing nothing keeps the country on a path of inertia, and to get out of that inertia public and private interventions are required. It is a super opportune moment because the United States is doing it, the world is doing it and Mexico has never stopped doing productive politics, we only want to accelerate it, for example, the foundations have already been laid for the Isthmus of Tehuantepec, to talk about poles of development. And the new Government of Claudia Sheinbaum already proposes some priorities, for example, the energy transition, there is already a signal to the productive sector of what it should do and where it should go.
PDoes ECLAC’s productive policy proposal advocate a stronger State?
R. It proposes a different State. It does not necessarily have to be stronger, but rather an efficient State, with a vision, and that means a new way of doing things internally. It also means a challenge for the private sector in planning and in establishing a mechanism for dialogue with the State, because the transformation of the productive sector cannot be done through the public sector. The public sector provides the direction and regulations, but the participation of the private sector is necessarily required.
P. What was the mistake that the country made so that at this point it still does not have a robust productive development policy?
R. It is not necessarily a mistake, it was a test, it was a policy based on a consensus in which it was believed that the market could solve everything on its own and that the market would automatically generate the winning sectors and if it works like that, but it maintained a lot of underdeveloped sectors, for example, agriculture where low productivity and precarious jobs remained and, therefore, a course correction is required.
Q. Have you seen a paradigm shift in this direction in this Government?
R. Changes have been taking place in Mexico and in all countries regarding the role that the State must play in managing the economy, and since these changes are very slow, because structural changes do not occur from one year to the next, it is possible that we will have to see these changes beyond a six-year term, trans-six-yearly.
P. What are the red flags that Mexico must address most urgently?
R. It is important in Mexico to have a territorialized and dialogued policy and for that the proposals to have territorial dialogues are fundamental, this helps us to identify priorities and, on the other hand, to gain partners, to bring people on board the project. I believe that this has been lacking in Mexico, it is a very large, very complex country and it is necessary to promote this type of dialogue that leads to the design of a policy with a territorial vocation.
Q. There is talk of better paid jobs, innovation, added value, however, this is a discussion that has been had in Mexico for years without these proposals being able to take off, what has gone wrong?
R. We agree on what we want, we want better jobs, we want a more dynamic industry, greater added value, and we are failing in the how, so we have to move our conversation from the what to the how, and I believe that the how lies in governance, in governance based on dialogue, and these dialogues cannot be just from the State or the private sector, these dialogues must be social. And, on the other hand, this governance is also based on political, prospective and technical capacities.
P. Do you think that initiatives such as Plan C and the reform of the Judiciary could scare away exports and attract foreign investment?
R. It is normal that with any reform, with any change of status quo, fears are generated, however, Mexico is in such a privileged condition with the proximity of the United States, that investments continue to arrive, some may be postponed in time, possibly, but we do not see a disruptive change in investment trends. Now, obviously, what we are seeing is a political proposal for reorganization from the public sector and there the different sectors have a lot to say and there, again, political capacity is very important for things to work well and I am confident, I am optimistic about the political capacities that exist in Mexico.
Q. Can such an ambitious productive policy be implemented without tax reform?
R. It is possible to make a productive policy without tax reform, yes, it is possible, because much of what a productive policy requires is investment coordination, and investment coordination does not necessarily require tax reform. It requires a State capable of long-term planning, capable of bringing together the consensus of the private sector and generating development proposals that attract nationals and foreigners, and where the State coordinates, it does not necessarily have to be the largest investor. The fact that the State is the rector does not mean that it has to spend a lot of money. What is certain is that it has to be a State in which public capacities are much better defined and with operational capacity to lead the country towards the proposed objectives.
Q. If ECLAC’s productive agenda is implemented, how much more could the Mexican economy grow?
R. It is difficult to put a number on growth, a lot will depend on investment capacity, but perhaps more important than GDP growth is how we are going to distribute the burdens and the beneficiaries. In Mexico we managed to reduce poverty, but we did not manage to significantly reduce extreme poverty, therefore, we still have a challenge to serve those poorest, we did manage to increase wealth, in fact, the richest companies in Mexico have been benefited, then we have the ideal conditions to decide how we are going to distribute it internally.
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