A glimpse of what Vicente Fox, the new president of Mexico, did as governor of Guanajuato tells volumes in terms of his potential impact on San Diego and the border region.
Fox, widely known as the former president of Coca-Cola Mexico, is an entrepreneur who fully understands the benefits of democracy and a global economy and what it can mean to a developing country.
From 1995 on, under Fox’s rule, Guanajuato saw more than $2 billion (in U.S. dollars) in increased investments in industries from shoe and leather manufacturing to agribusiness. There were 70,000 new jobs, plus a standard of living allowing almost everyone access to health and education services while those in states like Chiapas and Oaxaca were faced with malnourishment and illiteracy.
Pragmatically for Mexico this means he will rule the country from a platform encouraging investment (both local and foreign), focusing on fostering productivity, looking for opportunity to increase worker salaries and keeping the national budget in balance.
Fox understands this cannot come at the expense of political and social programs like judicial reform or Progresa, an initiative targeted at upgrading living standards for the poorest Mexican sectors.
PANista States
The greatest potential for winners in the Fox administration are the states governed by PANistas , Baja California Norte, Nuevo Leon, Jalisco, Queretaro, Guanajuato and Aguascalientes. For the first time, these states have a president of the same party. The result will be more federal funding for a variety of programs from infrastructure to education to social initiatives. These states should spend their money strategically, efficiently and transparently trying to keep their party in power.
As we witnessed in Fox’s stint as governor of Guanajuato, expect an increase in entrepreneurial incentives for the business sector from President Fox. This will result in an expanded middle class with purchasing power and capacity to consume more cross-border products.
It’s probably analogous to Mexico’s oil boom of the 1980s when Mexicans came to the United States in great numbers to invest in tourism, banks and real estate. U.S. businesses and industries receiving the greatest benefits first will be those that understand:
– How business is conducted in Mexico.
– The behavioral patterns of Mexican consumers, commonly called “malinchismo,” a preference for products made outside the country.
NAFTA’s Implications
A third factor for the San Diego business community are the implications of NAFTA, now in its sixth year. The maquiladora industries and their products will no longer receive preferential treatment in Mexico because of the treaty. Expect more aggressive competition for markets and consumers. Mexican industries with competitive product quality and cost advantages will be energized to go after their niches in the United States (as will their counterparts on this side of the border), which is the whole idea of free trade.
Mexico will aggressively pursue sales of fruits, vegetables and automotive parts to the United States and ramp up purchases of computers, technology and machinery, among other products, from the United States.
Fox is a pragmatic, pro-trade businessman. He will push for more cross-border integration and an acceleration of the exchange of goods and services from our two countries. He has to keep pace with the global economy to satisfy expectations at home and abroad.
Ellstein, a native of Mexico City, directs the Latino Outreach Practice for Nuffer, Smith, Tucker, Inc., a San Diego-based management and public relations consulting firm.
