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 ESTADO DE BAJA CALIFORNIA SUR (State of Baja California Sur)
Interview with
Leonel Cota Montaño
Governor of Baja California Sur
February 14th, 2000
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Could you give a description of the e economical climate in Baja California Sur during this last 3 or 5 years?
Baja Californnia Sur is a young Mexican entity with important economic potential. This is mainly due to our geographical situation. The State represents 23.4% of the coastline of the country, that is to say a quarter of the coasts of Mexico. Obviously, due to this situation, developments are very linked to the sea. For example the tourist development has been very agile, very strong either in occasions such as < Los Cabos>, and goes beyond the government and obviously the fishing. This government is trying to make aquaculture the main capital flow of Baja California Sur in the near future. We are promoting these kind of projects. Those are increasing and during the years of my government, this state will be emphasized by aquaculture. And from then on, we will be able to give, with this, a balance of the development of the State. Baja California Sur is a State with lots of imbalances. Our development is concentrating itself in the south, in the area of La Paz and of Los Cabos, mainly because of tourism and the north is registering some problems of development. The aquaculture project pretends to the economical abilities of the 3 municipalities of the north. We are registering overall American investment that back that idea, they are going to be important in the close future.
Which percentage of the investors in the south are foreigners or Americans?
There is an undoubtedly important investment, which is detected in different economical activities and mainly in tourism. For this sector 80% of the investments are American, 10 % are Canadian and the rest comes from other European countries which have also invested in this field. Recently, we have started to register Japanese investment, which is not focusing on tourism but on the industry and more particularly in the salt industry. So, Baja California Sur is the first national producer of salt and one of the main regions of the world relating to that.
We have seen that the interests of people to invest in Mexico has increased 45% around the world. Which are the incentives offered for all the investment potential?
The recent establishment of our government meant a break with the close past. The foreign and private investment was suffering from corruption rules. Therefore, it has been a big challenge because we know that for every sort of investment either public or private it is necessary to implement rules very accurately. We did not register any conflicts in International investment during this year of government. And from the establishment of efficiency and honesty conditions, that are briefly evoked in the Law of Economic Development, regarding all that have to see with the government and in his relation with the private, internal and external investment there are new opportunities. And since then, the fact that the government promotes these opportunities widen the possibilities to establish a very concrete aid for the investment, as with the taxes, with the lands and the use of the ground through studies of ecological impact; helps in things which regard the necessary procedure of zero bureaucracy. It is clear that Mexico has plenty of that kind of problems. In the past, to establish an aquaculture firm two years of bureaucratic procedures were required. In Baja California Sur, nowadays that kind of company can be established in seven days. Concretely it is a substantial saving for investors.
What do you think of Mexico’s potential due to this geographical situation and its new relation of free trade with Europe?
In different aspects of the economic life, tourism represents an addition of potential investment. The area of Los Cabos has been the one which has most increased in these last years with a very specialized tourism and with a higher economic level. This government intends to create new infrastructures, which supports the large development of that zone. We have currently a project called Golfo Sur which coordinates the construction of roads that join San Jose by El Golfo con la Rivera with Los Planes and La Paz. When this project will be completely finished we will multiply the tourist potential of the region of Los Cabos.
An investor in this sector has huge perspectives to consolidate something important in the state fro the long term. Others sectors such as fishing have been very affected by a strong and terrible corruption coming from the highest official spheres. We are finishing with this problem through a reorganization of the fishing sector and because we gave credits to help the true fishermen and by creating a fishing Ground Corporation which is managed by themselves. An aquaculture firm is a truly ecological alternative regarding the irrational exploitation, which was given in the last few years. The right communities are now responsible for the development and not like it was previously when politicians were coming to destroy huge fishing areas. For aquaculture Mexico is the most solid place in the world. So, the perspective is to fix the development of the state in tourism and in fishing. To exploit the nautical tourism in Los Cabos and La Paz, and in the north to promote everything regarding the whales, offers us an important opportunity of development, talking about tourism; because they offer a great sight. This Whale is the symbol in this region and is evidence of the importance of tourism in Mexico therefore, people visit us every year and the number continues to grow.
How do you coordinate the fact that Baja California Sur is a tourist place with the protection of the environment?
Baja California Sur is pioneer at a worldwide level regarding ecological reservations. A big part of our territory has been transformed in reservation such as La Reserva de la Biosfera, Vizcaino, Sierra de la Laguna and la Estatal, great natural reserves of the state in Mexico. In each case, the state environmental policy represented by the state reservation has been successful. We have had success in the protection of, of the deer, of the hoax, of the whales, of the islands, of the estuaries of San Jose del Cabo, of the Sierra de la Laguna. Any criticism to our state regarding environment will always be analyzed. Our environmental policy has been so successful that recently UNESCO awarded it. However, the challenge is still how to coordinate a policy of protection of the environment with the imminent exploitation of all the opportunities of development offered by the state. This is the main worry and we are studying it in our State Development Plan (Plan Estatal de Desarollo).
At the International communication level, what is the strategy you are going to adopt to make investors see what you are saying?
Four countries have been our objective of our economical promotion. The United States, since then, his habitants were our main visitors in the past. We are promoting investments in the aquaculture field between investors in Washington and among others in Canada for the export agriculture. The signature of the Treaty on free trade with North America represented a conflict for Baja California Sur because it was the only zone of free trade in all the country and suddenly Mexico is opening to the International trade and obviously Baja California Sur, without having the right structure to receive this big change, had recently received it in a negative way. In that perspective, we had to seed economical activities that help our development, which are immersed at the same time by trade globalization and inside there are two activities of which we have spoken previously. We are still not taking profit of our good a geographical situation. We are in contact with all the Pacific area regional offices. We should attract more investments and we are trying to convince the United States, Canada, Spain and Japan. We have already had firm relation with the United States for the promotion of the tourist activities and aqua-culture and with Canada for the development of the agriculture of low consuming water. So one of the main problems due to the fact that the sea surrounds us is sweet water. In the case of Japan, regarding the salt there is the discussed project of Salitrales de San Ignacio. We were against it. So it could not arrived until this part of the State. The Spanish investment is important in the sector of agriculture and tourism.
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How do you do the final balance between exports and imports?
It is clear that our economy is driven to the exports of agricultural product and to fishing product with high current prices, that is to say expensive. It is known that the country has been characterized by the necessity to import industrial equipment for the country, for the livestock and for tourism itself and Baja California Sur has not been the exception. And even like that we have a positive balance with more exports than imports, and we have been increasing at an even pace.
Looking to the whole Mexican territory why an investor should prefer Baja California Sur than another area?
for numerous reasons. We have important potential areas of development. Baja California Sur is a region with a low population density. Therefore there are no social conflicts. There are many opportunities in many sectors. The security is a guarantee; the register of problems is much lower than the national average. There is a new government who is promoting the investment and because there is a reliable climate between the government and the persons in charge of bringing capital.
What are the places, national or International you would rather receive more investment from?
We have the mission to promote the local investments that are done by different sectors, the national investment given in important sectors, overall the trade and the International investment. But, we don’t have any preferences. We don’t mind where the investment is coming from. It is always welcomed as long as it is legal and as long as it comes in conditions helpful for the development of the state. We want to avoid this classic scheme with fake figures on our growth. Our effort is going toward countries that already had trade relations with our state. That is to say, to countries which have proved their interests and since then if there was the opportunity of creating investments with any other countries. We would totally have the ability to implement helps and promotion.
What is your budget for your operations of communication and promotion for your investment project?
For the number of inhabitants of the states, that is now half million Baja California Sur has a very limited budget given by the Federation. It is clear that the Mexican State give a higher budget to the states with a more elevated population concentration. We are looking for financing less dependent to what is established by the Federation. And we want to give it a character more local and we are studying some alternatives. It is clear that the public Federal investment in our state which is moving toward the 3000 millions pesos per year. It is a very big limitation for everything, which are the productive, social and services activities, which are being realized in the state. However, because of this economical restructuring that we have obtained we have now a better ability to invest in our economical development. For the first time, projects of state development of hydraulic and aquaculture. This project establishes obviously a state policy to continue our action in every field. But respecting always the differences between the regions in conformity with the state, for which the vision is to succeed in the back of the regional development. For that reason, the plan for the Valle de Santo Domingo is mainly moved toward the agriculture and cattle raising sectors, the plan for Loreto is purely touristic and La Paz is following a program of economic reactivation. In Los Cabos the objective is to create urban infrastructures but no firms. The Pacifico Norte area, forgotten during a long time and traditionally a fishing area has registered an important decrease of its productive activities in the last five years. So our program and efforts are trying to change this negative trend.
What do you think is going to happen, in general words, in Baja California Sur in three years?
With a firmer economy and a social development more adequate, the history of the state has been defined by the pre-eminence of a public sector, which has been defined, by the pre-eminence of a public sector. This last one has never determinate the policies of economical development. Previously, the plans were staying in the writing desk and there wasn’t any adequate vision of the public investment in order to promote basic sectors of the economy. Considering the work achieved so far, in that same perspective we should have clearly consolidated some activities. Particularly, in the tourist fields, increasing the ability of winning some areas such as Los Cabos, La Paz Loreto and Todos Santos. The tourism linked to the whales, the nautical and adventure tourism is perspectives, which will be consolidated during a space of time of three years. Regarding the industrial sector, some sectors that are hard to promote such as the gold extraction in El Triunfo San Antonio will have to reactivate, as the plaster production and as the phosphoric and the salt. We have to reach to change the false debate between development salt production and ecology, that is to say to make this two sectors coincide in the necessity of reaching the social development of the region, considering that the salt production is one of the most ecological industrial activity of the world, much more than the ecological tourism. Therefore, we will have to reach the aquaculture and the redeployment of the fishing industry. The regional plan will permit us through the experience to establish the strong points of every community and because of that they will be responsible or co-responsible for their development. We will work in the redeployment of the cattle raising of cowpox in capric, settling raising centers and taking profit of the half desert conditions for the capric. We Know that there are some objectives which can be realized only if we have the adequate infrastructure. Therefore, projects such as La carreterra del Pacifico Sur for the tourist regions and La carreterra del Pacifico Norte for the industrial production region are important. The plan Hidraulico Estatal will represent in a close future the achievement of numerous small and medium works in order to promote the save of water in the populations and others bigger for the retention and the storage of water.
As governor what is the image you have of Baja California Sur?
I believe in the sentence <Baja California Sur is the state of the XXI century>. There is such big exploitation potential that establishing it in a rational way we will reach our firm perspective to have a balance between ecology and human development. We have to moderate the population rise to have an equitative order of the urban zones and the apparition of big cities does not represent the apparition of big conflicts. When we will have reached it we will see what is in reality the development in Mexico avoiding obviously the existence of excluded regions. It is clear that populations dedicated to tourism will have to increase proportionally to the rise of the tourist industry they offer.
How long have you been governor?
10 months which I have used to re-organize the state government and the public administration which previously looked more dedicated to corrupt itself than to serve. During these 10 months we have established the bases of the state development and we have really moved the public resourses to the development of the state. So a government in which you don’t trust is, by definition, condemned to failure.
What is your last message for our readers?
This state offers important possibilities of investment. We have some areas inside the government specialized to the attention of the investors who will receive all the facilitations. When there is, the serious compromise to consolidate investment expectation in our state. For its geographical policy and social conditions Baja California Sur is consolidating as an adequate for the investment.
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© 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
