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Table of Contents
Rapid economic growth
Best city in Mexico?
New large denomination bill
Businessman of the decade
Mining doing well
Another airport for Quintana Roo?
Volkswagen truck plant
Municipal inequalities
Website for entrepreneurs
Record remittances, falling costs
Petrochemical investments
Boost for west coast ports
Measuring employment
The rise of Broad Band and VOIP
Rapid economic growth
The economy, as measured by the Overall Indicator of Economic Activity, grew 5.2% in August, compared to the same month a year earlier, according to the National Statistics Institute (INEGI).
It comes as no surprise therefore when President Vicente Fox says that GDP growth for this year will exceed 4%, and that current growth rates are only the beginning of a sustained period of growth for the Mexican economy.
Mexico's foreign reserves, as of November 5, stood at 58.321 billion dollars.
Best city in Mexico?
Residents of other Mexican cities may disagree, but Condé Nast Traveler magazine says San Miguel de Allende is Mexico's best city. It came fourth overall in the Readers' Choice Awards for the "Best Cities in the Americas", behind three Canadian cities (Vancouver, Victoria and Quebec City), but well ahead of the top three U.S. Cities (San Francisco, Santa Fe and New York).
All the cities were judged on ambience, friendliness, culture, sights, restaurants, lodging and shopping.
New large denomination bill
A 1,000-peso banknote entered circulation last month. The bill is Mexico's largest denomination, equivalent to about 85 dollars.
The purple and green bill features a likeness of Miguel Hidalgo y Costilla, the "Father of Mexican Independence" and incorporates numerous security features to prevent counterfeiting.
The total value of bills and coins currently in circulation is about 280 billion pesos, or 24.5 billion dollars.
Businessman of the decade
The business magazine Latin Trade has named Carlos Slim Helú its "Businessman of the Decade". Slim, Mexico's wealthiest man, heads the boards of several corporations including Teléfonos de México, América Móvil, Grupo Carso and Grupo Financiero Inbursa.
América Móvil, the leading cell phone operator in Latin America, recently announced investments of 700 million dollars in 2005 to expand its infrastructure and attract additional clients. Mexico has about 32 million cell phone users at present, and the cell phone business is experiencing an unprecedented rate of growth, adding almost 3 million new users each year.
A new Carso subsidiary, Carso Infraestructura y Construcción is seeking contracts for large infrastructure projects such as petroleum drilling platforms and water treatment plants.
Mining doing well
August proved to be a good month for mining. Compared with August 2003, production was up for silver (by 23.7%), gold (41%) and copper (4%), as well as for sulfur, iron and coking coal. Production dipped slightly for zinc, coal, lead and fluorite.
Overall, for the first eight months of this year, mineral activity was 8.1% higher than for the equivalent period a year ago. Mexico remains the world's leading silver producer.
Another airport for Quintana Roo?
Passenger traffic through Cancún airport is rising rapidly, with domestic movements up 5.6% this year, principally due to new routes to cities like Veracruz, Villahermosa and Oaxaca. International traffic is up 19.2%. To keep pace with demand, the region needs either a second runway (originally projected for 2012) or a second airport.
The Quintana Roo state government favors building an alternative airport well south of Cancún, at a location closer to the rapidly developing Riviera Maya. Whichever solution is eventually chosen, congestion will not be solved prior to when Cancún hosts a Formula One motor-racing Grand Prix in 2006.
South of the Riviera Maya, 64 acres of environmentally sensitive Caribbean beachfront have been purchased by a consortium of conservation groups, the International Corporate Wetlands Restoration Partnership, to help protect the Sian Ka'an Biosphere Reserve, an area of beaches, jungle, marshes, mangrove swamps and coral reefs.
Volkswagen truck plant
Volkswagen has announced a new assembly plant for buses and trucks will be opened next to its existing auto plant in the city of Puebla, some 110 kilometers east of Mexico City. It will be the firm's second specialist bus and truck assembly plant in the world, and will produce four different truck models and one bus chassis. Production is expected to reach 1,000 units within a year.
Municipal inequalities
A recently published study examines the United Nations Development Program's Human Development Index (HDI) at the municipal level. The HDI takes into account longevity, income and education. According to the study, regional development initiatives need to target municipalities in the states of Veracruz, Oaxaca, the State of México, Puebla and Guerrero, where HDI varies greatly, in order to reduce the differences between poor and wealthy municipalities.
The ten municipalities (or delegations in the context of the Federal District) with the highest HDI are in the Federal District (5), Nuevo León (2), State of México (1), Morelos (1) and Oaxaca (1).
By contrast the ten lowest scores are located in Oaxaca, Chiapas, Veracruz and Guerrero. The HDI of Benito Juárez, in the Federal District, is comparable to countries such as Germany and New Zealand, while at the other extreme, Metlatónoc, in Guerrero, has an HDI similar to Tanzania.
Website for entrepreneurs
The Economy Secretariat has joined Anáhuac University, Endeavor, Grupo Televisa and esmas.com to provide an Internet portal aimed at small and mid-sized firms. Budding entrepreneurs can find all the necessary information to convert a bright idea into long-term business success.
Hundreds of articles on every aspect of planning, marketing and financing, at www.esmas.com/emprendedores, help to connect fledgling industrialists with experienced experts, as well as potential suppliers and clients.
Record remittances, falling costs
An estimated 10 million of the 25 million residents of Mexican origin in the U.S. were born in Mexico and, according to the central bank, Banxico, they will send more than 16 billion dollars in remittances back home to relatives this year. The average remittance is 328 dollars.
A recent World Bank study found that the average cost (commission) of sending a remittance has fallen 54%, from an average of 35 dollars in 1999 to 14 dollars today, in response to improved technology and increased competition. About 85% of all remittances are now transferred through formal financial institutions, a dramatic increase over previous years.
The World Bank considers that the changes are a model for other countries to follow. The importance of remittances to the overall economy has risen steadily in recent years; they are now equivalent to more than 80% of oil exports.
Petrochemical investments
Petróleos Mexicanos (Pemex) plans to invest 587 million dollars (6 mil 700 millones de pesos) in petrochemicals over the next two years. Eight projects are envisaged, including a plant for the production of polyethylene (polietileno) with a capacity of 300,000 metric tons a year, as well as expansions to several styrene (estireno) plants making fibers, fiberglass and resins.
Boost for west coast ports
Support for expanding and modernizing Mexico's west coast ports is coming from an unlikely source: the U.S. state of Missouri. A group of Missouri businesses, including Kansas City Southern Railway, is pushing for the establishment of a major trade route from the Missouri cities of Kansas City and St. Louis to Asia, via railroad links to Mexican ports. The plan is to avoid the need to use expensive, congested U.S. west coast ports such as Los Angeles.
Three Mexican ports, Lázaro Cárdenas, Manzanillo and Ensenada, are likely to benefit. Lázaro Cárdenas, in Michoacán, is connected by Mexican railroad TFM to Laredo, Texas, the busiest point of freight entry on the Mexico-U.S. border. Chicago and Kansas City are only 200 miles (320 kilometers) further from Lázaro Cárdenas than they are from Los Angeles and Long Beach, while Houston is 600 miles (960 kilometers) closer.
Mexico has already announced plans to open a customs clearance office in Kansas City for freight inspections prior to transport, thereby avoiding border delays.
Measuring employment
The National Statistics Institute (INEGI) has announced that, beginning in January, it will employ a revised method for calculating employment indices. A monthly Occupation and Employment Survey will incorporate several indicators, including rural employment, that have not been used previously.
The methodological changes bring INEGI's methods fully in line with the criteria of the OECD (Organisation for Economic Co-operation and Development), the IWO (International Workers Organization) and the United Nations.
The rise of Broad Band and VOIP
According to analysts Point Topic, access to broad band Internet services is growing at a much faster rate in Mexico than anywhere else in the Americas. It is estimated that about 10% of Mexico's 14.9 million Internet users have high speed or broad band connections.
As broad band Internet services become more popular, so too does VOIP (Voice-Over-Internet Protocol) which allows local and long distance calls to be made via the Internet. The market potential for VOIP in Mexico is considered enormous, given the relatively high costs of conventional phone service.
Mexico's main provider of broad band is Telmex which, as of September, handled 456,000 ADSL accounts, 200% more than a year earlier.
The text of this report was not submitted to any Federal Mexican Authorities or approved by them prior to publication. In preparing it, we have done our own research, using sources we believe to be reliable. However, we do not guarantee its accuracy. Neither the information contained herein nor the opinions expressed, constitute a solicitation by us of the purchase of any security.
©
2004 Operadora de Fondos Lloyd, S.A.
© 2004 Allen W. Lloyd, S.A. de C.V.
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For MexConnect.Com LLC & Conexión México S.A. de C.V. © Mexico Connect 1996-2006 |
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