When you first arrived to office, your government's top priorities were employment, education and security. What comes next?
In terms of full employment, now it's the quality of jobs. As you know, we have a low minimum-salary. In Nuevo Leon the real minimum is 2½ times higher than the National minimum. Nevertheless, according to international standards, it's not enough. Therefore, we are looking for higher paid jobs. We are trying to attract investment of more sophisticated types of industries, particularly the so-called new technologies, which pay more.
The backbone of Nuevo Leon's economy is the traditional industry. Since you are now going to focus your attention on the new technology industries, what will happen with the traditional industries?
The manufacturing activities in Nuevo Leon are cement, chemicals, steel, glass, etc. In the last few years, within the manufacturing industries, new branches have appeared in our state: motor-parts, electronics. These pay higher wages than the traditional industrial activities. In our promotion projects we don't reject an expansion for new venture in traditional industries, but our state government stresses its promotional efforts in industries that pay higher wages, such as software, technology development and research, and telecommunications.
Both the population and the industrial developments in Nuevo Leon are highly concentrated in the Monterrey's metropolitan area. Is that the result of a lack of planning and what are you plans to have a more homogeneous distribution of both the population and industrial developments?
It's difficult to find a reason why the state of Nuevo Leon hasconcentrated in metropolitan Monterrey and not in the rest of the state, but certainly, it's a fact. Perhaps it happened because of a lack of planning and one of them following the other. The basic reason why Monterrey grew to this extent is that the aspects any family is looking for can be found in Metropolitan Monterrey and not in enough quality and quantity in the rest of the state. What attracts people are education, job opportunities, services, quality of life in terms of housing, availability of various products, culture and leisure. All of these things that any human being in the world is seeking in life can be found in Monterrey in the amount and quality comparable with any large city in the world. Our approach towards this, which has certainly become a problem, is through offering the same opportunities in other areas of the state, particularly in Linares (which is 100 miles south of Monterrey) and in Sabinas (100 miles north of Monterrey). We believe in freedom and free markets, so we will not impose legal obligations and as a state government we have no right to force industrial companies to install their facilities in other cities. Our strategy is making these cities attractive by installing the same opportunities at a lower cost than those found in Monterrey. The jobs we might lose because of this distribution of job opportunities could be replaced by the types of jobs I mentioned in the first question, they require more preparation and work sophistication. We strongly believe we have that capacity because of the excellent universities we have in Metropolitan Monterrey. The best private university in Latin America is the Instituto Tecnológico de Monterrey and the best State University is The Universidad Autónoma de Nuevo Leon. In fact, we have received executives from international corporations in this area of business and they informed us they have chosen to establish their company in Monterrey. For example E Connors will place its Latin American headquarters in Monterrey, because of the availability of 1500 engineers specialized in their field. These types of jobs are much better paid than manufacturing. We are working to produce these types of human resources.
I was surprised when a local businessman recently declared that the last thing Monterrey needs is more investment, that what Monterrey needs is to consolidate what is in place and to invest in infrastructure. But, in a country where the tax system is so poorly developed, how can you finance the needs of its cities?
You are very well informed. That, precisely, is the challenge. Regarding the statement you mention, this office is angry to a certain extent. He demanded from me to stop promotion in Metropolitan Monterrey because it has become so crowded. The prices of Real Estate are low. The legal framework where a government officer moves does not allow doing anything about that. The strategy is again offering the services Metropolitan Monterrey needs and in order to reach that goal, we need investment, which has not been available so far. We are in the process of designing the schemes in which public money will be mixed. We'll be associated with public moneys coming from the three levels of authority we have in Mexico: Municipal, State, and Federal, in order to make this plan feasible. For instance, in Sabinas we have an industrial park, we have enough land, but the industrial system sewers have to be constructed and that costs a lot of money. We can't finance it with State funds, so we should put together a financial package jointly with the private sector. The price of Real Estate will rise when this entire infrastructure is set up. With the present tax system, this is the only alternative we have. Unless we are able to organize these projects, it would take very long with our State tax resources. In the national agenda of the three most important political parties, what we call the tax reform is included in order for governments to build the infrastructure required for growth.
What are the specific needs that have to be addressed in order for Monterrey to be able to absorb the growth expected for the years to come?
The most present is communications within the
city, building streets. We do have a good highway
system within the state but it certainly needs to
be enlarged, renovated, and modernized. For instance,
the Monterrey-border highway was built 30 years
ago. It does serve this sector but it is now obsolete.
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The second need would be for housing. For example, in a municipality 60 miles NE of Monterrey that goes by the name of Doctor Gonzalez, a small town with a population of 5,000 people, a good number of industrials are setting up their manufacturing plants. There are not enough workers because the town's old-timers already have a job and the newcomers don't have a place to live in.
The third would be water and sewage. We have one objective in my administration and that is to service water and sewage. The way municipalities are organized in Mexico is that they have a certain territory and the larger community in that municipality would be its head. But the areas, which surround them, are sometimes in mountains, deserts, etc. and there are small communities. The goal is to provide communities above 250 inhabitants with water and sewage at home.
In summary, our basic need is for basic infrastructure.
Monterrey has recently been featured by a prestigious magazine as the best place to make business in Latin America. Could you name a city you deem represents the best the example of development you want for Monterrey, and why?
Perhaps Austin, Texas. It has been able to attract investors in the area of electronics and high-tech, hiring highly qualified personnel prepared in the University of Texas, which has its main campus in Austin. All the resources required for these types of industries are there. We also have a hot summer, but nevertheless most houses, automobiles, and public spaces have air conditioning, so life can be enjoyable even with such extreme temperatures. That's a city I admire a lot. It offers sophisticated products and activities in terms of culture, leisure and at the same time it's not a very large city, so its communications are not time consuming.
Some people tend to say that Monterrey is more similar to some American cities across the border than to other Mexican cities. Do you agree with this statement?
That is the first impression, but if you penetrate beyond what you see in the streets or buildings, Monterrey is very Mexican. To me, in this regard, Spain is an excellent example. Spain has entered in a development stage comparable with the most advanced countries in Europe: Germany, France, and U.K., but at the same time keeping its Spanish roots. In any town you can find traditional food, music and cultural activities. This is something we do have here in Monterrey.
Being a U.S. neighboring state, Nuevo Leon has been one of the NAFTA's top World Investment News Ltdrs. Do you expect something similar to happen with the recently signed treaties with the EU?
Yes, when the trade agreement was executed, there was a lot of skepticism. There was a fearful atmosphere because we were to compete with the most powerful country in the world, in terms of finance, industry, military, etc. Seven years have passed and we have proven that we're able to compete with them and take advantage of our proximity. I'm convinced that something similar will happen, particularly with the EU treaty. Distances have shortened because of technology and communications and the ways of doing business is a process that can be learned quickly. We know that we have the ability to produce competitive products in terms of price and quality. The U.S. consumes the best throughout the world, so our products are compared with the Canadian, French, Japanese, Chinese and they have picked us. So I foresee a tremendous growth, a potential for our industrial companies with the EU trade agreement.
You recently headed a trade mission to several Asian countries. I'd like to have your impression about the Asian culture. Could you also tell us why you took this initiative, why now and why those countries?
The impression was very positive. I went to Asia twenty years ago. I found many changes, most of them positive. I chose this moment because Asian investors have traditionally looked only to the Pacific Rim. Most of their investments in Mexico are located in Baja (California) and the reason for that is that they are seeking to enter the U.S. market through there. What we offered was economic development, trying to attract Asian investment in Monterrey, in Nuevo Leon, arguing that we have a very important internal market. We are below the middle of the U.S., the meridian 100. We are at the same distance than San Francisco, Philadelphia, and in the case of Canada, Winnipeg. And we are near both the Atlantic and Gulf of Mexico ports, both in Mexico and in Texas, to reach the European markets. The attitude of Nuevo Leon towards work in terms of discipline and engagement is similar to the Asian culture: professionalism. In those markets, as potential investors, we have nothing but to grow because the existing investments from Asian countries are very limited. In fact, three or four days after the elections I'm breaking ground in a Korean firm, part of the LG conglomerate, a factory to produce air conditioning units, both for the domestic market and the U.S. So we are very enthusiastic about these new opportunities and about what you mentioned, that Mexico has initiated negotiations for free trade agreements with Singapore, Japan. It might take longer than the ones we have executed with Central and South American Countries because the Asian culture is not as pressed, in terms of time, as westerners, but things do happen. I foresee free trade agreements with these countries in the future, which will enhance our growth. |
State of Nuevo Leon 