President Calderon’s IV State of the Union Message
President Calderon recently delivered his IV State of the Union message, where He explained the Mexican situation in issues such as employment, economy and the development of infrastructure.
During his message, He took as a basis the world economic recession that affected our Country during the year 2008″. With the creation of 630,000 jobs between January and August this year (2010), Mexico recovered the jobs lost during the economic recession of 2008″, said the President.
He detailed job report statistics from the Mexican Social Security Institute documenting the highest number of jobs created in the history of Mexico since he took over as President”. We have,” said Calderon in his address, “even recovered the jobs lost during the recession because today, the total employment figures are well above of the peak reached in 2008”.
Journalist Leo Zuckerman criticized President Calderon for focusing his achievements on the recovery after last year’s recession”. It was worth doing it, but Calderon fell short and now what worries us is the future. What is Mexico going to do with the deceleration of the U.S. Economy and the possibility of a new recession? The President should have addressed this concern and proposed solutions to act as soon as possible”. Zuckerman pointed out. Agustin Carstens is the Governor of the Bank of Mexico (BANXICO).
He affirmed, “In the case of Mexico I can say that we left the deepest part of the crisis”. The former Minister of the Treasury assured that the effective response of the federal government allowed an accelerated and sustained growth process. “The nation has solid foundations to maintain this growth. Just for this year our GDP will end with an expansion rate between 4.5 and 5 percent. This could generate 608,000 formal jobs”.
Carstens alerted that the risks about a continued restriction of the international financial conditions represent a warning for all the Latin America economic recovery”. In Mexico as well as in Latin America to grow is not enough.
It is necessary that the economies of the region continue with their macroeconomic foundations and the advance of their structural reforms”.
Dr. Carstens detailed that the main topics to tackle are education, juridical security, labor flexibility and commercial aperture.
“In particular, I refer to three issues that are of vital importance for Mexican families to live better including employment, infrastructure and environment,” Calderon explained.
He reiterated that since the beginning of his administration he has complied with the commitment to build a competitive economy, one that generates plenty of jobs and with that goal in mind a number of diverse initiatives have been developed.
SMALL AND MID-SIZE COMPANIES’ SUPPORT
Luis Tellez, the President of the Mexican Stock Exchange is convinced that Mexico is in need of a business plan”. In order to achieve the growth of Mexican companies, it is important to create a more flexible system for the entrepreneurs as well as the fight against issues such as corruption”.
Tellez expresses that the main challenge of the Mexican economy is the creation of employment in order for small companies to develop into medium size companies”. If this transition doesn’t happen, small companies will not boost economic growth”.
The international recession, according to the President of Mexico, deeply affected our economy and the Federal Government, stated Calderon, has responded with concrete actions and programs”. We have strongly supported the productive sector in particular and also small and medium companies by detonating credit for $200,000 million pesos (US$15.38 billion). This is a number four times higher than at the peak of the previous administration (Vicente Fox) and it has benefited over 260,000 small and medium-sized companies,” he added.
Mexico’s Chief Executive said: “Even though our economy is recovering, we are driving the biggest infrastructure program in the history of Mexico. It represents close to 5% of annual GNP, a factor that consolidates Mexico as a world-class logistics platform for commerce and global investment”.
“Infrastructure,” said Calderon, “increases competitiveness that is conducive to balanced regional development and overall helps generate much needed jobs. During these four years of my administration,” he continued, “the public federal budget has invested over $130,000 million pesos (US$10 billion) in highways in both public and private funds. In 42 months,” he continued, “the Federal Government has built or modernized more highways than the total six years of any other administration of Mexico”.
Industrial development has been good as well. According to the INEGI, the industrial activity has grown 8.1% during the month of august, compared with the same month of last year (2009). This variation is larger than the expected and has been supported mainly by manufacturing.
A poll made by Reuters between 10 banking specialists had forecasted an expansion of 5.75%.
PEMEX also received important investment including two new oil production platforms in deep water and by the month of October the first phase of the Mazatlan Refinery will be completed. It will produce diesel of ultra low sulfur for the first time in Mexico. All this activity in addition to the development process for new refineries in Tula which is one of the largest investments ever made by PEMEX.
Two new deposits have been discovered in Campeche with a combined potential of over one billion reserve barrels each. This year PEMEX started the Equideno XXI project with a private investment of US$2.8 billion.
This will represent the largest petrochemical investment made in Mexico in the last 30 years.
President Calderon stated: “In just four years we have in real terms invested an amount equaling the sum total invested in the former administration and it also equals the amount of overall investment during the entire decade of the 90’s in our Country”.
“At this time, our Nation has a record level of international reserves superior to US$106 billion that equals approximately double that of our external debt. Today,” he went on to explain, “We have interest and inflation rates that are among the lowest ever registered in the country. Consolidating the strength of our public finances also helps promote development and guarantees economic stability,” Calderon stressed.
Francisco Rojas, Deputy, and former leader of the opposition party (PRI) said: “The Legislators of the PRI point out that the economic proposal should have contemplated a budget to grow without stimulus, austere, with realistic figures and no increase in taxes. But the Government maintains its policy of adjustment despite the fact that the economy hasn’t fully recovered to the full level that it had two years ago. There are still many millions of people who are living in complete poverty”.
Roberto Gonzalez, President of Gruma pointed out: “Facing the world crisis that we are living, the existence of opportunities that we could identify and take advantage of is latent. This is a lesson that I learned from a 61 years of experience as entrepreneur: During a crisis there is opportunity, but the important thing is to know how and where to find it”.