When was the Business Coordinating Council created?
The Business Coordinating Council was created 24 years ago and formed by the Chamber of Commerce; the Federation of Industrial Chambers, the Employers Confederation of the Mexican Republic, employers' association which gather numerous companies; the National livestock sector; the Mexican Council of Businessmen in which there are the 35 most important industries and companies of Mexico, and the Financial Coordinating Council which gather bankers, association of retirees funds, of the stock exchange, of storage, of leasing, of guaranteeing places and invoicing firms. These organizations have voices and votes. Some of them have voices but no votes: The National Chamber of Industry of Transformation, the biggest Chamber of Industry in the country : the Mexican association of stock intermediaries which gather stock exchange markets and the Mexican council of Foreign Trade which gather the Foreign Trade Institutions. These are organizations which form the Business coordinating Council.
It was created 24 years ago due to the necessity of having a voice, a coordination in order to be protected at the time against the governments decisions. We had to place ourselves in 1972 where the president Echeverria had taken a series of measures in which the employers'sector knew that it was going against the free companies, which felt attacked and threatened. So they decided to join with the Business Coordinating Council.
Have the responsibilities and objectives changed?
We have been adapting the objectives, the mission and the responsibilities according to the country's circumstances, however the coordination of the whole employers and defense sectors going on of the free firms. Basically this was our mission.
Could you give us the statistics about employers and profits?
I am going to explain what is our organization. This Council has a president who coordinates an Executive Commission conformed by 7 Institutions, and an additional 7 which have no voices. We have meetings every Wednesday during which we speak about the main subjects of the sector. The presidents of the studying centers belonging to the Business Coordinating Council, at the moment there are 3 such as the Treasury which also participate in that Executive Commission. Then, we have a council formed by 10 representative of each of the 7 institutions of Executives Commission, additionally to a group of special guests who are famous employers of different sectors or persons who have already participated in other employers' organizations, who are representative such as the Mexican Council of Advertising. This is the National Council ( 70 councillors), additionally to approximately 10 special guests. All these positions that I quoted are honorary, it means persons that we recover, we do not earn anything. We have a group of full time collaborators in the Business Coordinating Council, about 70 persons which conform the 3 studying centers additionally to the administrative part of the Council.
How do we get funds? Members organizations pay anually a part and that is our main source of money. Moreover, a group of companies do donations to the studying centers or to the Business Coordinating Council. Some companies like to do <labelling> to the studying center they are interested in.
What do you think of the Treaty of Free trade with the European Treaty?
In Mexico, if we have the approval of our Senate and of the European Union it will come into force the first of July and our country will be the only nation that will have had negotiated Treaties of Free Trade with the two most important markets of the world: North America ( The United States and Canada) and the European Union. Moreover, if we add to that the Treaties with Latin America and Central America centers countries, Mexico will have
in a preferential way, for it’s products access to 60% of the worldwide market. Any other countries of the world has this characteristic. Israel has a Treaty with the United States but not with the other countries of Latin America. This point really transforms Mexico in the central place; the point of investment; The impacts for the Mexican economy are; the first one as
happened with North America Free Trade Agreement, the increase of the Trade has been important. During this five last years trade has increased of 160% between the United States and Mexico. Since then we were not expecting a rise with that nature with Europe because our most natural market is the United States because of geographical question and because of other reasons. Nevertheless, if we believe that we are going to have a substantial increase of trade with Europe and Mexico, however the main effects will be on investments. The European Union exported 160 billions of dollars in 1998 and only 15 of that amount came to Mexico. I am sure that with the Treaty, we will reach, we have to reach at least to have 2 or 3% more and that means next to 6 billions of dollars. This is an effect which will create jobs, higher living conditions for Mexican.
A second effect is the opportunity that the Mexicans employers will obtain by diversifying our exports. This is very important because 85 % of our exports will go to the United States and Canada ( 80% to the United States and 5 % to Canada), that means a big concentration. It is not good as we say in Mexico "we can not have all the eggs in the same basket". This Treaty is going to give us the opportunity of diversifying our exports, something very important. There is also the third subject which is also very important: the technological development. The United States is very competitive, but it has different characteristics of the European market which has a better technology, and even more quality, at least in some sectors I know. This is going to motivate, to force us to have a better technology and a better quality. This is also positive for Mexico.
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Regarding public company privatizations, this is a delicate and difficult issue. How do they find investors?
There are some sectors in Mexico which require this opening that they still do not have as it is the case for the electrical energy, petrochemical or basic secondary petrochemical. We have still to insist on this sector, to change some laws which will permit the private participation opening. We are working on that. There is an act initiative in which there is an opening for electrical energy and we hope that within next week it will be approved by
the Congress. This is a good opportunity! In Mexico about 40 million dollars are required for the next five years, only in investment in the electrical sector. The rythm of growth of our economy involves this sum. And even if the Mexicans had this amount, I think it should invest in other sectors such as the social security, education or the infrastructure construction of other nature which are not viable for the private participations. This amount should serve for those investments.
How do we reach to look for these partners?
Well, through our organizations: each of them: overall in the industrial issue, they have an External Trade Department and also through the Mexican External Trade Council which has specialized persons who organize events, seminars where the producers and the shopkeepers are in relation.
What was your career before the Business Coordinating Council?
I had been manager in the textile sector for 26 years. This are my main duties and I hope to keep them all my life. But I have been participating in the managers' organizations for 20 years. I started in the National Chamber of Industry of Clothes. Don't forget that the industrial sector has 67 chambers, and I first participated in that Chamber, my specific Chamber. There, I started as a committee member of a department and then I was Deputy Tresurer of that chamber, Treasurer, Vice President and President. Then, in the federation, Deputy Treasurer, Treasurer, Vice President and President until 8 month ago, March, when I signed my term and then a group of managers thought I was the suitable person to coordinate the Business Coordinating Council. I did a campaign and I won it and today I have the very honorable
representation of the managers sector.
How to do to attract more investors? What are the advantages and drawbacks to invest in Mexico?
I think the negotiations of the Treaties have come in order to put some suitable conditions for the investors in order to be able to access the market with borders preferences, Foreign investment has shown. We were doing an average of 3 or 4 thousand millions of dollars in 94. From this year, the investment has been superior to 10 or 11 millions of dollars and we hope that with the Treaty, the average is going to increase of at leat 14 or 15 thousand millions of dollars every year. This is the first thing and here are the results. But, additionally to that I think it is important to have an environment with an economical stability> Mexico suffered, during the last 30 years, from a cyclical environment of crisis which has brought us to an important economical imbalance, the 60 % of our gross domestic product is achieved through the external trade. If we add the imports to the exports of Mexico
we have almost 60% of our gross domestic product. We are the eighth exporter power: this year we hope that our exports are going to reach about 130 000 millions of dollars, much more than the double of Brazil and nearly next to the addition of all the exports of all the Latin American countries. Therefore, I think that we must reach this stability environment in the macroeconomic indicators( inflation, rates, monetary stability, current account to have this competitive environment , how to reach it: we are working and we are in that way. Last year we had 17% of inflation and this year will be less than that but it is still high. The goal for the following year will be 10% and for the year after it will be to reach 3% within 20003. Sometimes it sounds like a long time but the fact is I think we can not do like before, from a year to another one decrease from 13 to 3%, it would be simply unrealistic. Secondly, to do some changes which are still in suspense in some legislations which would help us to have rules clearer, more transparent and we are improving: for example in the financial sector
we have two laws in suspense( Guarantees and Commercial Competition), which will give a more adequate environment to the investor in the financial sector, in order to participate in it.
Regarding the economiacal stability what is going to happen with the elections?
In Mexico, today we have understood that we need democracy. I think we, Mexicans have understood that. Nowadays, persons who run for president we have very similar point of view, for at least two of them, and I think they are the ones who have more possibilities to reach the power and there is not a big change. This is an element of stability and certainty. I do not think that we are going to have any surprise, which could make us fall into decline regarding the economical policies. Nobody is safe from a political disorder like it happened in 1994, when they murdered a presidential candidate, but I don't think we are going to live something similar again.
What is your message to the worldwide managers?
I insist on that, Mexico will be the only country in the world which will have negotiated commercial treaties, and that give a unique and suitable charasteristic for the foreign investor. I am sure that the economical stability in Mexico will be reached. We are reaching to differenciate Mexico from the rest of the emerging countries. Mexico is the fourteenth worldwide economy and the eighth exporter power. This is a point that lots of investors at the International level have not taken into account. Mexico has been underestimate, despite the fact it is a country that within the next century will have more than 100 million of inhabitants, with poverties problems, but we are working hard and all this elements of economical order are going to help us to reach a higher purchasing power for the population.
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MEXICO
