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 Introduction - Alliances & Investments - Expanding frontiers - Free market -
Telecom and transport - Banking - Energy sector - Tourism - States of Opportunities -
Agro Industry - Multinationals - Industrial States
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Interview with
Lic. Fernando Canales Clariond,
Governor of the State of Nuevo Leon
February 1st, 2000
Website : www.nl.gob.mx
| Can you give us an outline of the developments of Monterrey trough the last five years and tell us why it has caught the attention of several people worldwide.
Perhaps the reason of such attention is due to the fact that Monterrey has been one of the big World Investment News Ltdrs with NAFTA. Traditionally, Monterrey, as capital of the state of Nuevo Leon has been a happy host of large Mexican industrial corporations. The presence of international investors in our city was rather small in terms of percentages, but in the last years because of the decisive implementation of NAFTA we have received a large number of them, who are now installing in our city industrial plants in various domains. I mentioned NAFTA, but this international attention was also generated through two of the most important competitive advantages that we have. The first one would be that we have the skills; the attitude of our working force makes them posses from technical to managing skills, as well as others. The second advantage is our geographical situation; we are near everything and everywhere. We are near the most important Mexican cities, near the Gulf seaports and near the United States, neighboring Texas. We have a society that works in a state where the rule of law is a fact. Not only investors or businessmen, but the society in general knows the rules and respects them. I would mention that in this state there is also an attitude towards the establishing of good working relationships. Being an industrial city implicates the existence of several labor unions everywhere, nevertheless the number of strikes in nonexistent. We are celebrating today 19 months, more than a year and a half, without a single strike. Throughout negotiation, salaries have improved above national averages, and inflation has been avoided because of the fact that, when salaries increase productivity increases as well.
Could you highlight what the main sector has been and the most successful in this region?
Traditionally there are basic products in which Monterrey’s companies have been engaged. I’m talking about steel, cement, beer, and glass. In the last three years we have been producing more sophisticated products as automobiles and household appliances, and very recently electronic and communication devices as well as computer software.
It is said that Monterrey next to Santiago de Chile are the two strongest developing places in all Latin and South America…
Santiago de Chile next to Monterrey! I have just read in the annual report published by one of your competitors, where an analysis was made to establish the best sites for business in Latin and South America, and Monterrey was considered the best for the year 1999.
As the governor of that region, what do you have to say about being considered the number one?
It’s an opportunity and we have many challenges now that we have reached such level of development. One is to have a more homogeneous distribution of population in order to have an homogeneous distribution of the economical activity throughout the state. So far population has been concentrated in Monterrey; almost 90% of Nuevo Leon’s population lives and works there. An other challenge is fighting poverty among the sector of the state dedicated to agriculture, which is not a very productive area, and increasing the life level of people inhabiting the metropolitan regions of Monterrey. We have also to adapt the infrastructure of the city which is being over charged and to do so we need large investments that won’t be coming from levying because of the very limited Mexican taxing system.
You mentioned challenges and investments. What are the actual strategies established in order to attract these investments.
We choose some branches of industry to work with, and we welcome every interested investor. We provide information and advise to whoever comes to the state of Nuevo Leon willing to make an investment. Since the resources that we can apply to promotion and time is limited we cannot look after every country in the world and after every single industry. That is why now we are basically promoting electronics, telecommunications and software, plastics, metal mechanics and household appliances. All of these are related to the use of higher technology, and since we have the highest rate of education in Mexico and the best university of Latin America, we want industries that will hire the kind of people the state of Nuevo Leon is able to provide. We have chosen a certain number of countries in order to promote ourselves and attract investors. These countries are, in America, the United States and Canada, in Europe, Spain, France, England, Germany and Italy, and in Asia basically Japan, Korea and Singapore. Last year we captured 1.25 billion dollars of direct investment which represents about 17% of the total direct investment captured by Mexico. As you know Monterrey is the host of the headquarters of several leading Mexican corporations that have become international such as SOMEX or VITRO-ALFA among others. These established an important number of associations with some US industrial groups and European or Asian ones, and they constantly do the effort of bringing investments from their associates worldwide, an attitude that facilitates the process of growth in our state.
Do you have a close relationship with the productive sector of the state?
Yes, both formal and informal. We have dozens of advisory boards giving us their advice in the Secretary of Industrial Development, in the Secretary of Labor , in the Water Agency, and in other administrative entities which make part of the state government.
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What could you tell me about how the new European treaty will be strengthening the development of the region?
As you know Mexico is now waiting for the free-trade-agreement with the European Union to be fully approved and signed by both sides. Once this is done, Mexico and Israel will be the only two countries in the world to sustain economical agreements with both blocks. In fact we have experienced in terms of businessmen visiting us last year a very substantial increase in the number of European businessmen willing to start business in Mexico. With two approaches, one is looking after serving the Mexican market which is a very large one. The second and most important approach is looking to take advantage of our proximity with the U.S. and the fact that goods made in Mexico are entering to the States with very reduced duties. We are in the sixth year of NAFTA, so duties are now half of what they were at the beginning (and they were already low). In five years there will be practically no duties at all, which means nothing if we speak about long term policies. So we are receiving lots of investors establishing plants in our region and taking advantage of both markets and of the low producing costs Mexico has in comparison with the ones they can find in the U.S. or in Europe. People say and I agree with them that at long term we could loose our label of low cost producers, as it has happened in Europe where salaries tend to homogenize once a common market or economic block is established. But this process will take a lot of time and our competitive advantages are not based only on our low-cost-producer label, productivity is also a factor. We have plants in the automotive industry and as you know, this industry has been global for many years already, so the standards of measure and comparison of competitiveness for plants all around the world are very well established and ours grade as high as any, being in many cases qualified as leaders of that branch. We have been for the last five years the most productive Mexican state of all.
Could you tell us where do you think the state of Nuevo Leon will be standing in three years time, as far as economic and social development are concerned?
I still have four years to go as Governor of Nuevo Leon, so if you come back in three years you will still find me here and you will confirm that state’s employment rates will be higher just as average salaries will be. The quality of our cities infrastructure will be better and socially speaking, peace will be kept by our hard working and problem solving institutions. A very important issue I must speak about is security. The fact that the rule of law is an every day reality reflects itself in crime statistics according to which we are qualified as one of the safest cities to live in, and we will keep this going on the same way.
Today the image of a country or the image of an entity is very important when you talk about attracting world press and by doing so, attracting world class investors. What would you think about the image of Monterrey being the one followed by Mexico right now?
I will try to be very objective and to do so I will just say that last week I received the President of Costa Rica who visited in the first place Mexico City and then came here to talk business. He mentioned that President Zedillo told him: "Excellent that you are going to Monterrey. You will see a city that is important not only because of its industry but that now has become a beautiful city." This is something to be really proud of. Mexico is not just beaches and tourism, there are also beautiful cities devoted to work.
Can you underline two of the most important objectives throughout your term of office as governor of Nuevo Leon?
I will underline not two but three objectives. First of all, job creation, then security and third, the achieving of an excellent level of social quality. After two years and a few months in office these three objectives remained as the primary ones, but the order in which they appear now in my agenda has changed. Today my first concern is security, and a great part of our annual budget is directed to that essential aspect of social life. In the second place we are now taking care of the qualitative aspect of the jobs the industries of our state can offer to our well prepared and every day better prepared working force. And in the third place, we are taking care of the quality of our children’s education. Even if every child in Nuevo Leon has the opportunity to attend school from primary levels up to doctorate levels, there are some places where teaching methods are not as good as we would like them to be.
Now that you have mentioned, do you think that education is an important factor in life?
Definitely! And one of the institutions that has enormously contributed to the development of the Nuevo Leon has been the Monterrey Tech (Tecnológico de Monterrey), which was established 55 years ago. I recommend you to have an interview with the principals of this institution of higher education. It is important to add that 63% of the state budget goes to education.
Why should someone invest in Monterrey rather than investing in Mexico City?
First of all because Monterrey is a safer city. Secondly, the productivity rates here are huge not only because of the high quality of our labor force but because of the general vision we have for anticipating industrial needs in terms of infrastructure, which is by inference much more adequate here than in Mexico City. You may know that I have nothing against Mexico City, I like Mexico City, but I said I was going to be objective.
If you were in my position and you were doing the interview, what would you like to show about Monterrey? You may answer from the point of view of the decision maker as well.
The slogan we are using for our tourism program is "Monterrey, the city of mountains". With this we are just trying to say that there are other things in Monterrey besides industry which is in fact the most widely spread activity. Perhaps I would describe Monterrey as a city with a high quality of life and the leader of the economic development of Mexico. |
© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Mexico published in Forbes Global.
July 3rd 2000 Issue.
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MEXICO
