12
A lthough Mexico- related news over the past couple of years has been dominated by sto- ries of drug trafficking and vio- lence, there is a whole other side to Mexico that has sadly been eclipsed and is one that the ma- jority of the country – 90% in fact – is living and breathing to- day. It is a story of rapid eco- nomic development and job creation, of improved access to education and health, and of greater political and fiscal sta- bility. This is the story that Mex- ico would like to share with the world, with investors and with travelers. While security issues have served to bring U.S. and Mexi- co even closer than before, trade relations between the two na- tions have always been strong. Indeed, two-way trade hovers around a whopping $1 billion per day and Mexico is its north- ern neighbor’s second-largest trading partner. Mexico’s rank- ing as the world’s 13 th largest economy is due in large part to its strategic location, as well as to its wide portfolio of free trade agreements, excellent infra- structure and enormous work- force. For Arturo Sarukhan, Mexi- co’s Ambassador to the U.S., the Mexico-U.S. trade relationship is unique, because “it brings to- gether two countries in which one is abundant in capital and the other is abundant in labor.” Hector Rangel Domene, di- rector of state-owned banks Na- cional Financiera (Nafin) and Bancomext, says that the Mex- ican government has further consolidated its strong eco- nomic position – especially since the 1995 financial crisis – with a highly disciplined and prudent management of public finances. “An autonomous central bank and a stalwart performance in the areas of deregulation, in- frastructure, education and health have been determining factors in improving our com- petitiveness,” says Mr. Rangel. “Our private sector has also been growing over the past 10 to 15 years to the extent that now we’ve got many multinational Mexican companies that are in- vesting abroad.” The result was robust eco- nomic growth in the run up to the global financial recession (GDP contracted by 6.1% in 2009), and a quick comeback last year, when GDP grew by 5.5%, with estimates stating the economy will grow by another 4.9% in 2011 as domestic de- mand recovers. Many of Mexico’s sectors have enjoyed healthy growth, and the government has made available numerous incentives not only to foreign investors but also to local ones. In creating special hubs to develop key in- dustries, namely aerospace and IT, the country has also cat- alyzed the creation of a knowl- edge-based society in which research and development ca- pabilities are now developed alongside, thus creating better opportunities for the local work- force. “Many mistakes were made in the past where a lot of peo- ple thought that if you trigger FDI then that does the trick, but it doesn’t. It is FDI plus a num- ber of other issues such as ed- ucation, training, labor and local R&D, and that is precisely what is happening in the sectors of IT, aerospace and alternative en- ergy in Mexico,” comments Am- bassador Sarukhan. Moreover, foreign companies are considering Mexico as a bet- ter home for their factories than China, for example, and today the Spanish-speaking country is the largest producer of Black- berry units. “Many who had set up facto- ries in China are now turning to Mexico due to our proximity and our system of intellectual property rights. Also, the lan- guage and culture are much more similar here than they are in the Far East,” says Mr. Rangel. Education is certainly a key priority for President Felipe Calderon’s administration, as are health, social infrastructure, physical infrastructure, and of course national security, and more public funds have been channeled into these areas. Yet the government must also tack- le the problem of ‘brain drain’ , which sees many of Mexico’s more talented workers migrat- ing northwards in search of higher salaries, albeit without working papers. Ambassador Sarukhan says that the trick is to anchor a sufficient number of well-paid jobs in Mexico, en- courage private public partner- ships (PPPs) to foster sustainable economic development, and build upon the synergies be- tween Mexico, the U.S. and Canada by investing in human capital and ensuring that com- panies in the NAFTA region are able to hire the best talent and labor possible, regardless of which country they operate in. “At the end of the day, how do you take on this very polar- ized debate in America which is immigration reform?” asks the Ambassador. “Beyond the issue of the rule of law, the chal- lenge is whether the U.S. and Mexico will have the ability to understand labor mobility, hu- man capital and integrated sup- ply chains. This will allow these two countries to compete vis- à-vis the Chinas and Indias of the world. I think that is the most important advantage that Mexico brings to the table in the economic environment of North America.” Gustavo Madero Muñoz, president of the ruling National Action Party (PAN), sees a re- lationship between the U.S. and Mexico becoming increasing- ly consolidated at different commercial, private and gov- ernmental levels. “The need for dedication and collabora- tion between both govern- ments is clear. The NAFTA has proven to be a good decision. The next step should be lend- ing greater added value to the economies and recognizing the complementarity between the two countries. The opportu- nities are infinite.” As for the issue of nation- al security, both governments continue working towards eradicating the problem. “Despite the challenges that the U.S. faces in other parts of the world – whether it is the Middle East, the Persian Gulf or Central Asia – there is no more important relationship for the future wellbeing of the U.S. in terms of security and prosperity than its relationship with Mexico,” says Ambassador Sarukhan. This supplement to USA TODAY was produced by United World Ltd.: 388 Second Avenue - Suite 131 - New York - NY 10010 - Tel: 212 286 8117 - E-mail: [email protected] Thursday, July 14, 2011 MEXICO Leading opportunity in Latin America Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content This report is available at www.unitedworld-usa.com A UNITED WORLD SUPPLEMENT PRODUCED BY: Gonzalo del Rio, Iris Oliveros, Carlos Rodriguez- Villa and David Barbolla Our World Both the Obama and the Calderon administrations understand the strategic relevance of a bilateral relationship and have shown their commitment and willingness to investing political and diplomatic capital in moving that relationship forward THE 1995 FINANCIAL CRISIS MEXICO SUFFERED SERVED TO STRENGTHEN ITS FISCAL MANAGEMENT AND THUS RECOVER MORE QUICKLY FROM THE RECENT WORLD RECESSION MEXICO IS ENJOYING GROWTH ACROSS A WIDE RANGE OF SECTORS AND THE GOVERNMENT WELCOMES FDI WITH INCENTIVES AND INVESTMENT-FRIENDLY LEGISLATION THE GOVERNMENT’S REINFORCED FOCUS ON EDUCATION AND HIGH-TECH INDUSTRIES AIMS TO BUILD A KNOWLEDGE- BASED ECONOMY AND KEEP ITS WORKERS AT HOME AS KEY PARTNERS IN TRADE, THE BILATERAL RELATIONSHIP BETWEEN MEXICO AND THE U.S. IS PARAMOUNT TO BOTH COUNTRIES’ PROSPERITY AND SECURITY

Mexico 2011

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Page 1: Mexico 2011

Although Mexico-related news overthe past couple ofyears has beendominated by sto-

ries of drug trafficking and vio-lence, there is a whole other sideto Mexico that has sadly beeneclipsed and is one that the ma-jority of the country – 90% infact – is living and breathing to-day. It is a story of rapid eco-nomic development and jobcreation, of improved access toeducation and health, and ofgreater political and fiscal sta-bility. This is the story that Mex-ico would like to share with theworld, with investors and withtravelers.

While security issues haveserved to bring U.S. and Mexi-co even closer than before, traderelations between the two na-tions have always been strong.Indeed, two-way trade hoversaround a whopping $1 billionper day and Mexico is its north-ern neighbor’s second-largesttrading partner. Mexico’s rank-ing as the world’s 13th largesteconomy is due in large part toits strategic location, as well asto its wide portfolio of free tradeagreements, excellent infra-structure and enormous work-force.

For Arturo Sarukhan, Mexi-co’s Ambassador to the U.S., theMexico-U.S. trade relationshipis unique, because “it brings to-gether two countries in which

one is abundant in capital andthe other is abundant in labor.”

Hector Rangel Domene, di-rector of state-owned banks Na-cional Financiera (Nafin) andBancomext, says that the Mex-ican government has furtherconsolidated its strong eco-nomic position – especiallysince the 1995 financial crisis –with a highly disciplined andprudent management of publicfinances.

“An autonomous central bankand a stalwart performance inthe areas of deregulation, in-frastructure, education andhealth have been determiningfactors in improving our com-petitiveness,” says Mr. Rangel.“Our private sector has also beengrowing over the past 10 to 15years to the extent that nowwe’ve got many multinationalMexican companies that are in-vesting abroad.”

The result was robust eco-nomic growth in the run up tothe global financial recession(GDP contracted by 6.1% in2009), and a quick comebacklast year, when GDP grew by

5.5%, with estimates stating theeconomy will grow by another4.9% in 2011 as domestic de-mand recovers.

Many of Mexico’s sectorshave enjoyed healthy growth,and the government has madeavailable numerous incentivesnot only to foreign investors butalso to local ones. In creatingspecial hubs to develop key in-dustries, namely aerospace andIT, the country has also cat-alyzed the creation of a knowl-edge-based society in whichresearch and development ca-pabilities are now developedalongside, thus creating betteropportunities for the local work-force.

“Many mistakes were madein the past where a lot of peo-ple thought that if you triggerFDI then that does the trick, butit doesn’t. It is FDI plus a num-ber of other issues such as ed-ucation, training, labor and localR&D, and that is precisely whatis happening in the sectors of IT,aerospace and alternative en-ergy in Mexico,” comments Am-bassador Sarukhan.

Moreover, foreign companiesare considering Mexico as a bet-ter home for their factories thanChina, for example, and todaythe Spanish-speaking country isthe largest producer of Black-berry units.

“Many who had set up facto-ries in China are now turning toMexico due to our proximityand our system of intellectualproperty rights. Also, the lan-guage and culture are muchmore similar here than they arein the Far East,” says Mr. Rangel.

Education is certainly a keypriority for President FelipeCalderon’s administration, asare health, social infrastructure,physical infrastructure, and ofcourse national security, andmore public funds have beenchanneled into these areas. Yetthe government must also tack-le the problem of ‘brain drain’,which sees many of Mexico’smore talented workers migrat-ing northwards in search ofhigher salaries, albeit withoutworking papers. AmbassadorSarukhan says that the trick isto anchor a sufficient number

of well-paid jobs in Mexico, en-courage private public partner-ships (PPPs) to foster sustainableeconomic development, andbuild upon the synergies be-tween Mexico, the U.S. andCanada by investing in humancapital and ensuring that com-panies in the NAFTA region areable to hire the best talent andlabor possible, regardless ofwhich country they operate in.

“At the end of the day, howdo you take on this very polar-ized debate in America whichis immigration reform?” asksthe Ambassador. “Beyond theissue of the rule of law, the chal-lenge is whether the U.S. andMexico will have the ability tounderstand labor mobility, hu-man capital and integrated sup-ply chains. This will allow thesetwo countries to compete vis-à-vis the Chinas and Indias ofthe world. I think that is themost important advantage thatMexico brings to the table inthe economic environment ofNorth America.”

Gustavo Madero Muñoz,president of the ruling National

Action Party (PAN), sees a re-lationship between the U.S. andMexico becoming increasing-ly consolidated at differentcommercial, private and gov-ernmental levels. “The needfor dedication and collabora-tion between both govern-ments is clear. The NAFTA hasproven to be a good decision.The next step should be lend-ing greater added value to theeconomies and recognizing thecomplementarity between thetwo countries. The opportu-nities are infinite.”

As for the issue of nation-al security, both governmentscontinue working towardseradicating the problem.“Despite the challenges thatthe U.S. faces in other partsof the world – whether it isthe Middle East, the PersianGulf or Central Asia – thereis no more important relationship for the futurewellbeing of the U.S. in termsof security and prosperitythan its relationship withMexico,” says AmbassadorSarukhan.

This supplement to USA TODAY was produced by United World Ltd.: 388 Second Avenue - Suite 131 - New York - NY 10010 - Tel: 212 286 8117 - E-mail: [email protected]

Thursday, July 14, 2011

MEXICOLeading opportunity

in Latin America

Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content

This report is available atwww.unitedworld-usa.com

AA UUNNIITTEEDD WWOORRLLDDSSUUPPPPLLEEMMEENNTT PPRROODDUUCCEEDD BBYY::

Gonzalo del Rio, IrisOliveros, Carlos Rodriguez-

Villa and David Barbolla

Our World

Both the Obama and the Calderon administrations understand the strategic relevance of a bilateral relationship and have shown their commitment and willingness to investing political and diplomatic capital in moving that relationship forward

THE 1995 FINANCIALCRISIS MEXICOSUFFERED SERVED TOSTRENGTHEN ITSFISCAL MANAGEMENTAND THUS RECOVERMORE QUICKLY FROMTHE RECENT WORLDRECESSION

MEXICO IS ENJOYINGGROWTH ACROSS AWIDE RANGE OFSECTORS AND THEGOVERNMENTWELCOMES FDI WITHINCENTIVES ANDINVESTMENT-FRIENDLYLEGISLATION

THE GOVERNMENT’SREINFORCED FOCUSON EDUCATION AND HIGH-TECHINDUSTRIES AIMS TOBUILD A KNOWLEDGE-BASED ECONOMYAND KEEP ITSWORKERS AT HOME

AS KEY PARTNERS INTRADE, THE BILATERALRELATIONSHIPBETWEEN MEXICOAND THE U.S. ISPARAMOUNT TOBOTH COUNTRIES’PROSPERITY ANDSECURITY

MEXICO USAT 1-6.qxd 6/7/11 18:59 Página 1

Page 2: Mexico 2011

Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content

Distributed by USA TODAYThursday, July 14, 201122 MEXICO

The Mexican econo-my ranks as the 13th

largest economy inthe world in nomi-nal terms and the

11th by purchasing power par-ity, according to the WorldBank. In 2010, Mexico’s econ-omy expanded by 5.5%, repre-senting a marked recovery froma difficult year before, and beat-ing forecasts of 3%. The peso hasstrengthened against the U.S.dollar and inflation remains un-der control at around 3.6%,which means that unlike otherlarge economies in Latin Amer-ica, Mexico is not battling soar-ing consumer prices. Brazil, forexample, may well attract moreattention for its surging growthrates, but it is having to dealwith 6.5% inflation, while inMarch Mexico’s dropped to afive-year low of 3.04%. Mexi-co’s foreign reserves are up andkey trade with its neighbors tothe north is booming. Thestrength of the country’s econ-omy and financial system ishelped in no small part to itsproactive business environmentand the solid regulatory super-vision of the autonomous cen-tral bank, Banco de Mexico,whose governor AgustinCarstens has been credited forcontroling inflation. Achievingthe March inflation figure, Mex-ico is “very close to our per-manent objective of 3%,” saysMr. Carstens.

In the Doing Business 2011:Making a Difference for Entre-preneurs report, a joint publi-cation by the World Bank andthe International Finance Corporation that comparesbusiness regulation in 183economies, Mexico leads theLatin American and Caribbeanregion. It ranks highest for easeof doing business and getting

new enterprises off the ground:an entrepreneur can expect tostart a new business in Mexicoafter just six procedures and inonly nine days. This comparesfavorably with the regional av-erages of 10.5 procedures and43.6 days, and considerably bet-ter than Brazil, for example,where 15 procedures and 120days are required to launch anew venture.

“Small and medium enter-prises (SMEs) represent 95% ofall economic units in the coun-try,” says Hector RangelDomene, director of state-owned banking institutions Na-cional Financiera (Nafin) andBanco de Comercio Exterior(Bancomext). “Nafin has estab-lished many programs to sup-port SMEs, such as guaranteesto financial intermediaries tolend money to interested par-ties. Through these guarantees,Nafin mitigates the risk of lend-ing to this sector.”

The Mexican economy wasdealt a harsh blow in 2009 andcontracted 6.1% as PresidentCalderon’s administration hadto cope with the combined ef-fects of the global recession –particularly in the U.S. – anddeclining oil production andremittance flows. That year,remittances to Mexico fell toan estimated $21.2 billion, thelowest level since 2005. Re-mittances are the country’ssecond-largest source of for-eign currency, after oil. Thesituation was further exacer-bated by the outbreak of H1N1‘swine flu’ in April 2009, whichprompted the closure ofrestaurants, schools and shopsfor almost two weeks. Thetourism industry, Mexico’sthird-largest foreign exchangeearner, was especially hit hardby the pandemic, with a 50%

drop in income earned by for-eign visitors in May 2009 com-pared to a year before.

However, according to a cen-tral bank report, the Mexicanfinancial system was able totackle the international finan-cial crisis from a position ofstrength because of effortsmade in recent years to improvethe regulation and oversight offinancial intermediaries. Suchefforts contributed to a well-capitalized Mexican bankingsystem with adequate liquiditylevels. Those same strengthsshould enable banks to supportthe recovery in domestic eco-nomic growth.

Overseas trade is vital to eco-nomic growth. As an export-oriented economy, more than90% of Mexico’s trade comesunder free trade agreements.Mexico has FTAs with morethan 40 countries around theworld, including Guatemala,Honduras, El Salvador, the Eu-ropean Union and Japan.

Over the years, links betweenthe U.S. and Mexico have gonefrom strength to strength. The

close trade and investment re-lationship enjoyed by the twonations has been further bol-stered by the North AmericanFree Trade Agreement (NAF-TA). Since NAFTA came intoeffect in 1994, Mexico’s shareof U.S. imports has increasedfrom 7% to 12%, and its shareof Canadian imports has dou-bled to 5%.

“NAFTA has been a successstory, and you can see this inthe trade numbers,” says Ar-turo Sarukhan, Mexico’s Am-bassador to the U.S. “We arethe second largest purchaser ofAmerican goods abroad andwe are currently the secondlargest trading partner withthe U.S. The last quarter re-sults for our exports to the U.S.have increased and as a resultwe have displaced China. Onany given day there are 75,000trucks that reach the borderin both directions every day.Two-way trade is about $1 bil-lion per day, so there is a verydynamic trade relationship.With our Canadian partners,NAFTA trade plays a very im-

portant part in world tradeflows, but the challenge is howto keep this competitivenessfrom being eroded becausethere are new competitorsfrom Asia on the world stage.”

Today, Mexico is now firmlyestablished as an upper middle-income country. Mr. Carstenssays that the output gap, whichis the difference between thelevel of economic activity andthe country’s production ca-pacity, may close by the end ofthe year. The central bank alsoconfirmed that remittances areagain on the rise, increasing5.48% between January andMarch over the same period in2010. In the first quarter of 2011there were 15.7 million transfers,1.9% more than in the same pe-riod last year. Furthermore, theEconomist Intelligence Unit expects solid GDP growth of4.9% this year, reflecting firmprospects in the U.S. – Mexico’sclosest and most importanttrading partner – as well as con-crete signs that domestic de-mand in Mexico is beginningto recover.

ECONOMYA stable outlook for theLatin American leaderHigher rates of growth and lower inflation are the hallmarks of Mexico’s economy,which is set for continued solid growth thanks to buoyant trade and astute supervision

Agustin Carstens, Governor of Banco de Mexico, the country’s autonomous central bank

Today, Carlos Slim’s son, Mar-co Antonio Slim, runs the In-bursa Group as president andgeneral director. The compa-ny has 96 offices around Mex-ico and operates two callcenters. Mr. Slim shares his in-sight on the group’s expansion,its commitment to the coun-try, and the robust state of Mex-ico’s financial sector.

WWhhaatt wwoouulldd yyoouu uunnddeerrssccoorreeffrroomm tthhee rroollee tthhaatt tthhee ffeeddeerraallggoovveerrnnmmeenntt aanndd tthhee pprriivvaatteesseeccttoorr hhaavvee ppllaayyeedd iinn MMeexxiiccoo’’sseeccoonnoommiicc ddeevveellooppmmeenntt aanndd iinnppoossiittiioonniinngg tthhee ccoouunnttrryy aass oonneeooff tthhee wwoorrlldd eeccoonnoommiieess wwiitthhtthhee ggrreeaatteesstt ggrroowwtthh ffoorreeccaasstt??

One important characteris-tic of emerging countries isthat we’ve been obligated bythe world powers and inter-national qualification systemsto maintain strong fiscal dis-cipline. Mexico finds itself ina very good position with re-spect to other developed coun-tries, thanks to its fiscal policy,the healthy state of affairs of itspublic finances, and the highlevels of capital and liquidity ofthe banks. These factors allowMexico to make the invest-ments it needs.

SSiinnccee tthhee ccrriissiiss ooff 11999955,, ssoommee8800%% ooff tthhee qquuoottaa lliieess iinn tthheehhaannddss ooff ffoorreeiiggnneerrss.. HHoowwwwoouulldd yyoouu ddeessccrriibbee tthhee MMeexx--iiccaann bbaannkkiinngg sseeccttoorr iinn tteerrmmss ooffccaappiittaall aanndd wwhhaatt iiss IInnbbuurrssaa ddoo--iinngg ttoo ggaaiinn mmoorree mmaarrkkeett sshhaarree??

The fact that the banking

sector is dominated by for-eigners means that Mexicanfinancial groups must take onmore responsibility and beeven more committed to ourcountry. Any business, ofcourse, has to some extent aresponsibility toward Mexico,but the financial sector holdsspecial relevance, as it man-ages society’s resources andchannels them into invest-ment. If banking slows down,so does the country’s growth.It is due to this commitment

to Mexico that we’re workingto increase our presence in themarket.

WWhhaatt hhaavvee bbeeeenn ssoommee ooff tthheehhiigghhlliigghhttss ooff IInnbbuurrssaa’’ss rreecceenntthhiissttoorryy??

Inbursa is growing. In this re-cent global crisis, we’ve dou-bled the size of our bankportfolio, tripled the numberof branches and financed morethan 30,000 SMEs. Further-more, we’ve taken steps to con-tinue developing the bank,

such as with the acquisition ofChrysler’s financial business.

As a financial group we’rehighly committed to grantingloans to companies, as it is theywho ultimately contribute tothe country’s development andto job creation. In the case ofSMEs, we entered the marketjust two or three years ago andtoday our participation standsclose to 30% in the sector ofcredits for micro-SMEs. Thisis increasing by 1,000 newloans each month.

IInn yyoouurr ooppiinniioonn,, wwhhaatt aarreeGGrruuppoo IInnbbuurrssaa’’ss ggrreeaatteessttssttrreennggtthhss??

First, I’d say our financial so-lidity has been key to the busi-ness’s development. Inbursapermanently has a high levelof capital and reserves, with18% participation in the cred-it reserves market, a numberthat rises every year.

I’d also highlight the quali-ty of our human capital andthat, in our 45 years, we’ve nev-er required any kind of state

intervention or bailout, andthere’s never been a need tomodify the control over thecompany.

Lastly, I’d underline our baseof operations, which has al-lowed us to take advantage ofopportunities thanks to a pos-itive risk assessment. This is es-sential in all areas of ourbusiness.

WWhhaatt iiss tthhee ggrroouupp’’ss eexxppaannssiioonnppoolliiccyy,, eessppeecciiaallllyy iinn tteerrmmss ooffbbrraanncchheess aanndd iinntteerrnnaattiioonnaallggrroowwtthh??

The most important step inthese past two years has beenthe opening of branches andATMs. Now we’re focused onconsolidating this infrastruc-ture and bringing in new clients.

International expansion isn’ta priority. Mexico presentsplenty of opportunities forgrowth, as you can see fromthe penetration rate of bank-ing in relation to the GDP. Wewould like to widen our shareof the national market. Underspecial circumstances, we par-ticipate in loan operations inLatin American, but we alwayscarry out the operations fromour base in Mexico.

AAss aa bbuussiinneessss lleeaaddeerr,, wwhhaatt aarreeMMeexxiiccoo’’ss ggrreeaatteesstt aattttrraaccttiioonnssffoorr ppootteennttiiaall iinnvveessttoorrss aannddhhooww wwoouulldd yyoouu lliikkee tthheemm ttoosseeee tthhee ccoouunnttrryy??

This is a country with greatinvestment opportunities,with a rather healthy financialsituation and highly developedinfrastructure. Mexico is acountry that can grow quiterapidly.

I’d like North Americans toview Mexico as a country ofopportunities. Everyone who’sinvested here has had positiveresults. Inbursa has believed inand grown with Mexico, whichis why we continue investingmore and realizing new pro-jects.

MARCO ANTONIO SLIM DOMIT

‘Mexico is a country that cangrow quite rapidly’Established in 1965 bybusiness magnate CarlosSlim as an investmentcompany, Grupo Inbursa hasacquired subsidies over theyears, growing into afinancial group that operatesdiverse business lines,including banking, investmentfunds, insurance, pensionsand mortgages

MARCO ANTONIO SLIM DOMIT President and General Director of Grupo Inbursa

IN MARCH, MEXICO’SINFLATION DROPPEDTO A FIVE-YEAR LOWOF 3.04%, WHICH IS‘VERY CLOSE TO OURPERMANENTOBJECTIVE OF 3%’

THE WORLD BANKAND IFC HAVE RATEDMEXICO AS THEEASIEST PLACE TO DO BUSINESS IN THELATIN AMERICANAND CARIBBEANREGION

THE COUNTRY IS ONTRACK TO SEE 4.9%GDP GROWTH THISYEAR. IN 2010, THEMEXICAN ECONOMYREBOUNDED FROMTHE GLOBALSLOWDOWN ANDEXPANDED BY 5.5%,BEATING THEORIGINALFORECASTS OF 3%

THE MEXICANFINANCIAL SYSTEMWAS ABLE TO TACKLETHE INTERNATIONALFINANCIAL CRISISFROM A POSITIONOF STRENGTHBECAUSE OF EFFORTSMADE IN RECENTYEARS TO IMPROVETHE REGULATIONAND OVERSIGHT OFFINANCIALINTERMEDIARIES

MEXICO IS NOWFIRMLY ESTABLISHEDAS AN UPPER MIDDLE-INCOME NATION ANDITS RELATIONSHIPSWITH THE U.S. GOFROM STRENGTH TOSTRENGTH

DEVLYN OPTICAL

A good eye forbusiness

Devlyn Opticos (www.dev-lyn.com.mx), a family-owned,multinational optical retailerwith operations in Mexico,Guatemala, El Salvador andthe USA, will be celebratingin September 75 years of constant proven leadershipin the optical retail marketin Latin America.

Their store network con-sists of more than 900 storeslocated in approximately120 major cities in the re-gion with some 300 storessituated inside grocery re-tailers and departmentsstores such as Walmart,Sears, HEB, Famsa andSam’s. All these major re-tailers have for years seenthe benefits of using andtaking advantage of the Devlyn name to add valueto their customers by pro-viding high quality opticalproducts and services at anaffordable price.

The Devlyn brand enjoysa commanding dominancein consumers’ minds whenit comes to eyeglasses, con-tact lenses and related eyecare products and services.As a result of this, last yearthe company partneredwith Genomma Lab, thelargest pharmaceutical andpersonal care product man-ufacturer in Latin Ameri-ca, to develop a line of visioncare products (eye drops,vitamins, eye lotions, etc.)all with the Devlyn brand.The products are now soldsuccessfully in the most im-portant grocery retailersand drug store chains inMexico and will soon beavailable in the U.S. and oth-er major markets of Cen-tral and South America.

The Devlyn Group is al-so levering its brand’s topof mind among consumersto access new markets.There are currently 41.9million Hispanics in theU.S. and half the popula-tion is concentrated in justtwo states – California andTexas – where close to 70%of them are from Mexicandescent and are familiarwith the Devlyn brand. Sev-eral retailers that cater tothe Hispanic market, suchas Famsa, have recognizedthe value and nostalgiamarket opportunity thatthe Devlyn brand brings totheir customers and theyhave successfully added op-tical departments with theDevlyn name. As a result,Devlyn is now planning anaggressive rollout of storesin Texas and California un-der a variety of formats,which go from managingoptical departments in thestores of major retailers aswell as in free standing lo-cations.

Jesse W. Devlyn Jr. is lead-ing this new venture by theDevlyn Group and you maycontact him at [email protected] for more in-formation.

Mexico’s top of mindoptical retail chainexpands to U.S.Hispanic market

FRANK J. DEVLYN,President of Devlyn Optical

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Page 3: Mexico 2011

Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content

Distributed by USA TODAY Thursday, July 14, 2011 33

MEXICO

It could be said that Mex-ico’s maquiladoras (as-sembly plants in whichmanufacturers importtax-exempt primary

goods and export manufac-tured goods) are an indicatorof the continent’s economictide. The financial crisis thatwas rooted in the U.S. and soonafter gripped most of the world,was deeply felt in Mexico –more so, in fact, than in anyother Latin American coun-try. The U.S. is its southernneighbor’s most importantcustomer, receiving some 80%of Mexico’s exports. In turn,about half of Mexico’s importscome from the U.S.

As its number one tradepartner (and not to mentiontourism market), when the U.S.economy plummeted in 2008,Mexico’s economy contractedby nearly 7%. In 2009, the U.S.imported 18.5% fewer goods(valued at $176.3 billion), andexports to Mexico decreasedby nearly 20% to $105.7 billion.Nevertheless, once the U.S.economy began to recover, sodid Mexico’s. By 2010, bilater-al trade had risen to nearly $400billion, the highest amountrecorded since the U.S. Feder-al Reserve Bank began docu-menting numbers in 1980.

Hand in hand with the revi-talization of the economy wasa huge revival in the non-oil in-dustry and Mexico’s maquilado-ras gladly picked up the pace.Last year, the sector’s contri-bution to GDP grew by 6.1%,and the Economist IntelligenceUnit predicts a further 6% risethis year, before steadying off ataround 4% for the following sev-eral years. This reflects a hugeturnaround compared to the

worst years of the recession; in2008 industry shrank by 0.1%and in 2009, by an even morepunishing 7.4%.

Recovering domestic de-mand is also helping to boostindustry and retail. Indeed, an-alysts estimate that Mexico’sretail sector will grow duringthe next five years by 43%.

Mainly located along the in-ternational border, maquilado-ras are the home base for themanufacturing of a wide rangeof commodities, such as auto-

mobiles, clothing and footwear,toys, furniture, and appliances.

These factories are a hugesource of employment for Mex-ico and represent a tremen-dous cost-saving strategy forU.S. companies. There are cur-rently more than 1.2 millionworkers in the maquiladora in-dustry. The 141 maquiladorasin Reynosa (south of the Texasborder), a city of 600,000, em-ploy over 84,000 people. Withthe upswing of the economy, in2010 alone 4,000 jobs were

added, and interestingly, forevery 10 of those, one job wasadded on the Texas side. Overthe past 18 months, CiudadJuarez maquiladoras haveadded an impressive 28,000new jobs.

Although the price of laborin Mexico is higher than thatin China, for example, the mon-ey (and time) companies savein transportation from Mexi-co more than makes up for thedifference. Texas is home to sixof the 10 most important ports

trading with Mexico: El Paso,Laredo, Hidalgo, Brownsville,Houston and Eagle Pass. Lare-do tops the list. Here, an aver-age of more than 10,000 truckscrossed each way daily, repre-senting annual bilateral tradeto the tune of $121 billion.

Although Mexico and theU.S. have a manufacturing re-lationship that dates back tothe 1960s, numbers trulypicked up with the advent ofthe North American FreeTrade Agreement (NAFTA).

While this contract boostedcommerce between its threesignatories (Canada’s bilater-al merchandise trade reachedCAD21.4 billion, or US$22.2billion, in 2009), it also ledMexico to become highly de-pendent on the U.S. econo-my – a detrimental situationin times of crisis, as seen re-cently. Therefore, Mexico isseeking to diversify its tradeand investment relations. Italready holds FTAs with morethan 40 countries.

INDUSTRYThe pace picks up after a two-year slump

AUTOMOTIVE AND AEROSPACE INDUSTRIES

Up and running at full speed

One of the biggest winnersfrom the NAFTA deal is theautomotive industry; indeed,as a sector it amounts to 20%of total intra-NAFTA trade.And in terms of production,employment, investment andexports, it is one of the most im-portant industrial sectors inMexico today.

According to ProMexico, thecountry is the world’s 10th largestautomotive producer, ac-counting for approximately 2%of global production. Internal-ly, vehicles comprise over 17%of the entire manufacturing sec-tor and 3% of GDP. Annually,Mexico’s 20 car-manufacturingplants produce some 2 millionlight vehicles, of which 79% isdevoted to exports while theremainder stays in the localmarket.

Many of the world’s biggestcarmakers – such as Ford, GM,Chrysler, Volkswagen, Nissanand Toyota – have plants inMexico’s highly developed au-tomotive clusters, from wherethey enjoy easy access to theU.S. market and lower produc-tion costs. Furthermore, Mex-ico has become the auto partshub for North America, with100 of the world’s leading com-panies settled here, includingGoodyear, Michelin, RobertBosch, ThyssenKrupp, andSiemens, among others.

The spare parts industry is al-so witnessing growth, thanks toMexico’s 2009 legislation im-posing new duties on the im-portation of used vehicles. Asa consequence, repairing used vehicles is often more cost-effective than purchasing a sec-ond-hand one, thus giving riseto greater domestic demandfor parts.

As in the automotive indus-try, Mexico is also well placedas a new low-cost and compet-

itive North American manu-facturing platform for the glob-al aeronautical industry.Additionally, the country hap-pens to be the largest militaryand commercial aircraft mar-ket in Latin America, with thesecond biggest business aircraftfleet in the world.

Owing to cost-effective man-ufacturing, a qualified work-force, and a reputation forintellectual property protection,Mexico has lured in many ofthe leading global aeronauticalmanufacturing and engineer-ing firms. These include Hon-eywell, Bombardier, HawkerBeechcraft, and Ellison SurfaceTechnologies. In May of thisyear, Bodycote announced plansto open a new facility in north-western Mexico.

Foreign companies in boththe automotive and the aero-space industries are importanttenants in Mexico’s industrialparks, which arose as a result of

the growing number ofmaquiladoras. Claudia AvilaConnelly, general director of theMexican Association of Indus-trial Parks (AMPIP), says thatbefore the 2008 crisis, the coun-try’s macroeconomic stabilityprompted global investmentfunds to invest on average $2billion in the development ofnew industrial parks. Althoughthe recession mostly affectedthe length of rental contracts,the investment funds continueshowing interest in participat-ing in the industrial park mar-ket. “This is a sign that this sectorin Mexico is still attractive,” saysMs. Avila.

While the upswing in drug-related violence, especially alongthe border, cannot be denied,Ms. Avila says that the countryand its industries are far fromparalyzed. “In fact, we contin-ue receiving a large number ofpotential investors who want tobe in Mexico,” she comments.

The ‘Made in Mexico’ label is easily spotted on tags of clothing and toys, butMexico’s real manufacturing weight lies in the aerospace and automotive industries

Mexico manufactures approximately 2 million light vehicles annually

gnp-corr.ai 1 16/06/11 11:09

The financial crisis had anenormous negative effecton the Mexican economyand on industry, inparticular. Nowmanufacturing is recoveredand once again thriving

Mexico boasts the second largest business aircraft fleet in the world

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Mexico is thesecond-largesti n s u r a n c emarket inLatin America

after Brazil. At the end of 2010,both life and non-life insurancesegments witnessed a signifi-cant rise in premiums. Manysegments under non-life in-surance sector experienced areal annual increase in directpremiums as compared to 2009such as fire, earthquake, liabil-ity, maritime and transport,credit, and agricultural.

The insurance sector is welldeveloped, with five firms(three of which are foreign-owned) accounting for near-ly 60% of policies. A clear signof the sector’s strength is itsresilience during the financialdownturn. Indeed, not one sin-gle insurance company inMexico went bankrupt or re-quired assistance from the gov-ernment. The regulationsimplemented by the sector’sauthorities have favored in-vestment, as well, resulting ininvestors taking a long-terminterest in the market ratherthan a speculative one.

Despite the insurance in-dustry’s stability and attrac-tiveness to investors, it stillrepresents a small overall eco-nomic activity, contributingless than 2% to GDP (com-pared to 9% in the U.S.). Ac-cording to AMIS, the MexicanAssociation of InsuranceCompanies, in 2009 only 2.6%of Mexicans had health insur-

ance and 5% hold a house in-surance policy.

Low penetration rates meanbig opportunities for existinginsurance companies as well asfor foreign investors. Howev-er, raising the number of clientsmust begin with education, ascurrently many Mexicans con-sider the service as an expenserather than as an investment.

The two major local play-ers are Qualitas and GNP, whoalong with the other Mexicancompanies enjoy a combinedmarket share of direct premi-ums that reaches 41%.

QQUUAALLIITTAASS

Qualitas was established in1993 to become the Mexicaninsurance specialist in the in-dustry and has grown to bethe market leader in the carinsurance industry since 2007.According to Joaquin Brock-man, managing director ofQualitas, “specialization isQualitas’ main competitive ad-vantage,” adding, “Another im-portant factor to our successhas been that the major share-holders in the company work,creating a stronger link withthe day to day business.”

Qualitas has provided in-surance to more than 1.6 mil-lion cars in Mexico and holdsover 19% of market share. Ad-ditionally, in accordance withAMIS, Qualitas also supportscompulsory car insurance.

“If someone has an accident,or injures someone, you cancompensate for the damage

with the insurance, which willcertainly help to change thisidea that when someone hitsyou, you think it's best to flee,”says Mr. Brockman. “Com-pulsory insurance will help im-prove the Mexican society inthis regard.”

To enter new niche mar-kets, Qualitas is looking fornew distribution channels andsales strategies. Mr. Brockmanmentions opening other saleschannels like departmentstores or supermarkets toreach more customers, even

where there are no insuranceagents.

Not only does Qualitas havean interest in serving thegreater part of the population,but it also has a strong socialresponsibility policy. Under asocial program called “Fo-mento Social”, it aims to hirethose with disabilities as wellas taking care of social devel-opment, where part of Qual-itas’ proceeds go to socialprojects to help hospitals orthe environment.

In recent years, Mexico hasundergone major changes inits economy, due to growth,good performance of exports,good fiscal management, andincreased foreign direct in-vestment. Mexico has posi-tioned itself as a chief playerin the world market, andQualitas plans to expand itsbusiness to Central and LatinAmerica to extend its achieve-ments in Mexico to familiarmarkets.

Mr. Brockman sees manyadvantages for Qualitas in thisregard and predicts futuresuccess. “Mexico is well posi-

tioned geographically closeto the world's most powerfuleconomy, allowing us to havea big advantage, especially inmanufacturing,” he says. “Thegovernment has done a greatjob of maintaining stablemacroeconomic conditions,which is another advantagefor Mexico.”

Mr. Brockman has also ex-pressed interest in partneringwith a U.S. company tostrengthen and to help insti-tutionalize the business for afaster pace of growth, as hebelieves that investment in Mexico and in the car in-surance industry has the potential to be mutually ad-vantageous. “Mexico is a greatopportunity, because it is acountry with great potentialfor growth and development.For example, if one examinesthe number of cars per person,we realize that the figure isstill very low,” he says. “Andmoreover if you look at howmany of these vehicles are in-sured, then we can see thatthere is a great business op-portunity in the auto insur-ance industry.”

The managing director issatisfied with the success ofQualitas and is pleased to havehelped build the brand to besynonymous with efficientcosts and excellent services.

“I have seen the birth of anidea and have lived through-out the process until it has be-come a reality,” Mr. Brockmanobserves. “We’ve overcomemany challenges, and we arenow a well known company inMexico and admired in manycountries.”

INSURANCEThe second-largest market in Latin AmericaForeign and local insurance companies, like Qualitas, offera full range of sophisticated products in a market that stillshows low penetration rates

From an insurance point ofview, Grupo Nacional Provin-cial (GNP) has Mexico cov-ered.

One of the nation’s largestinsurance providers, it offersa wide range of products thatoffer accident, life, healthand auto coverage, as well ascommercial packages forcompanies. According toJuan Ignacio Gil Anton, di-rector of corporate insur-ance at GNP and also thepresident of the Mexican As-sociation of Insurance Com-panies (AMIS), Mexico’sinsurance market holds greatopportunities for invest-ment.

“The insurance sector isrelatively old in Mexico,” saysMr. Gil. “Following the sign-ing of the free trade agree-ment [NAFTA] in 1994,which once again allowedforeign investment in thecountry, the number of in-

surers doubled. Today wehave about 100 companies.The world's largest compa-nies have come here, in-cluding MetLife, AXA, ING,Zurich, Allianz, Liberty, andMapfre, among others. Theevolution of the market hasbeen good, but we believe itshould be much better. Ourpenetration in the economyis not what we would like itto be.”

A large portion of the Mex-ican population is uninsured,representing an enormousopportunity for insurancecompanies to market nu-merous niche insuranceproducts.

“The biggest opportunityI see in the Mexican insur-ance market is that we havea lot of room to grow. Ourpenetration is low, so thereis significant market poten-tial here,” says Mr. Gil.

“Technology is beginning

to arrive in the market andcompanies that come frommore established places ,such as the U.S. market, canleverage this advantage inMexico, with direct sales, de-

signing more sophisticatedproducts, or access mecha-nisms aimed at very specif-ic markets . With growthabove 5% and a penetrationrate as low as we have in theinsurance sector of about 2%of our national GDP, I thinkMexico is clearly a place toinvest.”

Business Monitor Inter-national reports that Mexi-co is the second largestinsurance market in LatinAmerica, after Brazil, at theend of 2009. Both life andnon-life insurance segments

are witnessing significant ris-es in premiums.

Data published by thecountry’s national insuranceregulator, the Comision Na-cional de Seguros y Fianzas(CNSF), shows the fivelargest players in the life in-surance segment accountedfor 70% of premiums writtenin the first half of 2010. Inthe non-life sector, they ac-counted for 47% of premi-ums over the same period.

GNP is one of the marketleaders in Mexico, with a 14%share. It distributes its prod-ucts through a national net-work of more than 5,000agents operating from some170 offices. It is part of one ofthe largest conglomerates inthe country, Grupo Bal. Fur-thermore, GNP is the 100%Mexican-funded companyand challenges the multina-tional companies in Mexico.It is also one of the oldest,having more than 100 yearsof experience in the market.

“GNP has maintained sta-bility in the market for years.It is not an insurer that cameto Mexico and left only twoor three years later. Thechairman of the board hasmore than 40 years in thechair. We have significantcorporate stability,” says Mr.Gil, who sees the company’scompetitive advantages inits shareholders’ support tothe company’s management,its sales force and its humancapital.

‘THE BIGGESTOPPORTUNITY I SEE IS THAT WE HAVE ALOT OF ROOM TOGROW. OURPENETRATION IS LOW, SO THERE ISSIGNIFICANTMARKET POTENTIALHERE... I THINK MEXICO ISCLEARLY A PLACE TOINVEST’

JUAN IGNACIO GIL ANTON,Director of Corporate Insurance atGNP and President of AMIS

Mexico’s low penetration rate of around 2% of its GDPrepresents a huge potential market for several nicheinsurance products and Mexican insurer GNP is raisingawareness of the benefits of good insurance cover totap this burgeoning market

Insurance leader GNP has the edge on stability and transparency

JOAQUIN BROCKMAN, Managing Director of Qualitas

MEXICO HASPOSITIONED ITSELFAS A CHIEF PLAYER INTHE WORLD MARKET,AND LOCALINSURANCESPECIALIST QUALITASPLANS TO EXPANDITS BUSINESS TOCENTRAL AND LATINAMERICA TO EXTENDITS ACHIEVEMENTSIN MEXICO TOFAMILIAR MARKETS

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Distributed by USA TODAY Thursday, July 14, 2011 55

MEXICO

As IPN celebrates an important anniversary, we look back on 75 years of excellence and high standards in education and research. IPN is one of the country’s

largest public universities, with 350,000 students at high school, undergraduate and postgraduate levels, who have chosen the institute for its

recognized strengths in physical and mathematical sciences, engineering and social and administrative sciences. Today, IPN remains at the forefront of research and

looks forward to many more years of solid educational excellence.

www.ipn.mx

Mexico is hometo nearly 3,000institutions ofhigher educa-tion, a figure

made even more impressivewhen compared to the 50 in-stitutions it had just 60 yearsago. Enrollment has multiplied100-fold since the 1950s, aswell, yet the state deems thisto be insufficient. Since theyear 2000, the national gov-ernment has made greater ac-cess to tertiary level schools apriority as part of its strategyto raise more people out ofpoverty and slow the tide ofillegal immigration to the U.S.The target is to raise gross en-rollment from 29% today to65% by 2030.

“The main challenge is toform a solid chain between in-novation, science, technologyand education,” says Juan Car-los Romero Hicks, general di-rector of the National Councilof Science and Technology(CONACYT).

Here on pages five, six, andseven, four institutions of high-er learning, both public and pri-vate, are highlighted for theirexcellence and efforts towardsturning Mexico into a success-ful 21st century economy.

IINNSSTTIITTUUTTOOPPOOLLIITTEECCNNIICCOONNAACCIIOONNAALL

The National Polytechnic Institute or Instituto Politecni-co Nacional (IPN) is celebrat-ing its 75th anniversary this yearin addition to recently beinggiven the Recognition of Qual-ity and Excellence 2010 for therelevance and high quality ofits academic programs.

IPN was founded at the be-ginning of 1936 during the ad-ministration of PresidentLazaro Cardenas del Rio and is

now one of the largest publicuniversities in Mexico. Historically, the existing edu-cational institutions weregeared towards the elite society,but since IPN’s formation, thosewho had no access to highereducation have been able tobenefit from this public, secu-lar, and free institution.

IPN educates 350,000 stu-dents in language centers and20 research centers across Mex-ico. The institution offers in-

struction in three major fields:physical and mathematical sci-ences, engineering, and socialand administrative scienceswith a total of 81 programs of-fered at IPN in addition to tech-nological training at the end ofthree years.

Dr. Yoloxochitl BustamanteDiez, general director of IPN,recognizes that education, es-pecially in technical fields, isone of the key factors in de-veloping and advancing thecountry. “I think in this way,particularly in the field of en-gineering and biological med-ical science, IPN has focusedon those because they are ar-eas that have had growth inour country,” she says. “Youcannot conceive of Mexicowithout the participation ofengineers in the constructionarea or power, where a sig-

nificant portion of graduatesare from our classrooms.”

However, Dr. Bustamantedoes not only emphasize technical schooling; she alsoencourages international rela-tions, as she believes it givesstudents a competitive advan-tage in cross-cultural dealingswith foreign institutions, serv-ing as future support for busi-nesses. “We have a largenumber of companies ofAmerican origin in the coun-

try which our students canwork with,” she says. “They canmake significant contributionsthrough that solid training.”

She stresses the importanceof student mobility and culturein education, made possiblethrough mutually beneficial co-operation agreements IPN haswith countries ranging fromthe U.S. to several in Africa andCentral America.

“This is cultural,” she states. “Itis not necessarily studying a par-

ticular career, but the studentlearns from another culture orlearns another language, so thatthey understand the world.”

Dr. Bustamante would espe-cially like to cultivate Mexico’srelations with the U.S., whichis home to many of the mostprestigious research institu-tions in the world. She believesin the future of Mexico, as it isa growing country making sig-nificant efforts through edu-cation to advance to the level

of more developed economies. “Mexico is a country that has

respect which has associatedculture and art to complementthe life of any citizen,” she says.“It’s a country that is willing tohave friendly relations with theworld.”

EDUCATIONIPN and other institutions are raising the barInstitutions of higher learning are opening their doors tomore and more students. Ranking among Mexico’s toptechnical schools, IPN emphasizes international relationsand partners with universities in dozens of other countries

IPN comprises 81 academic units, including 16 vocational high schools, 26 university colleges, and 20 scientific and technical research centers

‘YOU CANNOTCONCEIVE OFMEXICO WITHOUTTHE PARTICIPATIONOF ENGINEERS INTHE CONSTRUCTIONAREA OR POWER,WHERE ASIGNIFICANTPORTION OFGRADUATES AREFROM OURCLASSROOMS’

A more extensive version ofthis report is available at

http://unitedworld.usatoday.com/ourworld.htm

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Distributed by USA TODAYThursday, July 14, 201166 MEXICO

Hugging the Gulf of Mexicofor nearly 430 miles and flankedby the towering Sierra Madremountains to the east, Veracruzis a long, thin, and irregularlyshaped state that poses greatchallenges to government dueto one of its most demograph-ically distinct features: its high-ly dispersed population.

Ranked third most popu-lous state in Mexico, morethan 60% of Veracruz’s 7.2 mil-lion inhabitants are scatteredaround nearly 22,500 smallrural communities, many ofwhich have fewer than 500 in-habitants. Extending servicesto these remote areas has longbeen a cause of headache ingovernment, and education– and its relevance to each di-verse community – had beenone of these services that suf-fered until the advent of In-ternet and other moderntechnologies.

Former President of Uni-versidad Veracruzana and for-mer Minister of Education forthe State of Veracruz, Dr. Vic-tor Arredondo advocates theuse of new technologies to ad-dress old obstacles. Media suchas the Internet, for example,can be used to train teacherswithout obliging them to trav-el far from their rural homesfor on-site classes.

“The first challenge as Minister of Education washow to spread educationalprograms that could be con-solidated among the state’s in-habitants in such a diverseterritory and with such variedpopulations,” he says. “This iswhy work on educationalquality, modern managementin school processes, the rela-

tionship between schools andthe ministry, and universalcoverage in the case of basicthrough higher education re-quired a good dose of tech-nology and communication”.

In the state of Veracruz, asin the rest of Mexico, nearlythree-quarters of the youthcomprising the ages of 20 to 24lack access to higher educa-tion. In contrast, in developedcountries, this figure is muchlower: 40%. Secondary schoolaccess is also limited, with ap-proximately one-third of high-school aged students living toofar from any schools. Veracruzdoes, however, have a more ro-bust primary academic net-work: 2.3 million pupils studyin the 22,500 schools in 7,100towns.

In an effort to close this gap,Dr. Arredondo has convertedVeracruz into the frontrunnerin the deployment of avant-garde educational practices inMexico. He has helped imple-

ment several projects that har-ness not only the Internet butalso other audiovisual media toencourage the use of ICTs andnew learning models in theclassrooms, increase parentalinvolvement, and train teach-ers. Indeed, Veracruz has thelargest number of teacherstrained via the Internet of anyMexican state – more than30,000 in the last three years.

A new digital informationsystem allows the Ministry toevaluate progress in the state’soverall educational system andeach individual student, andthen zero in on the areas thatrequire remedial work and per-sonalized support.

A doctor in educational psy-chology, Victor Arredondo isan ardent champion of educa-tion as a vehicle of economicempowerment and an enablerof human capital developmentat both the individual and col-lective levels.

“In our educational ap-

proach we work under the ideathat each individual shapes hisown destiny, and that groupwork within a community cangive way to creating better conditions for individual andcommunal self-sustained de-velopment,” he explains.

He has based the approachand contents of the state pro-grams on a triad of hypothe-ses that he believes can achievepositive results in little time,in any place and on any scale.

“The first hypothesis is thatthe planet cannot be fixed iflocal development is not en-couraged,” says Dr. Arredondo,who postulates that the lack ofschooling opportunities in rur-al communities can lead tomore serious problems, suchas demographic shifts awayfrom the villages and into thecities, and as a consequence,family disintegration.

Lack of education, the in-appropriate use of natural re-sources, the migration of the

better skilled members of acommunity to big cities insearch of better lifestyles, andthe scarcity of opportunitiesoften result in a major issue:once in the cities and facedwith unemployment, youngpeople turn to drugs and evena life of crime. Therefore, it isimperative that educationalprograms provide each indi-vidual with the tools that willallow him or her to becomeself-sufficient, to reach his orher full potential, and to suc-cessfully integrate into thecommunity.

The second hypothesis hasto do with the added value thattechnologies offer to farmingcommunities and small enter-prises: they are capable of help-ing raise productivity and teachmanagement practices. “We’reemphasizing the importanceof the tools new technologiesafford that can raise the po-tential of individuals and com-panies,” adds Dr. Arredondo.

The third hypothesis, intrin-sically linked to the first two,relates to the values of a soci-ety. Today, there are an esti-mated 5 to 7 million youth inthe country that neither worknor study and are not active inany type of sport or cultural ac-tivity. “If the traditional valuesof Mexican families were stillstrong today, such as solidari-ty, respect, and community liv-ing, there wouldn’t be so muchyouth delinquency,” he asserts.

Dr. Arredondo has finishedhis term as Minister of Educa-tion but continues his work indistance education, teachertraining, and new initiatives foreffective learning and schoolmanagement. As a true advo-cate of international collabo-ration and strategic alliances, heis committed to building up anetwork of operational part-ners in the Americas. “Sharingexperiences and resources andaspiring to common ideals gen-erate exponential synergies thatallow accomplishing largergoals,” he remarks.

Developing a smart, statewide network of educational programs

DR. VICTOR ARREDONDO, former Minister of Education for the State of Veracruz

■ CANAL EDUCATIVO(EDUCATIONALCHANNEL) reaches outthrough the state’s public radioand television network topromote parental involvementin their children’s education. Italso communicates to teachersthe new approaches andmethodologies, and instructsthem on how to apply newtechnologies in theclassrooms, thereby enhancinginteractive content-management and ICT skills.

■ CONSORCIOCLAVIJERO (CLAVIJEROCONSORTIUM), designedto offer on-line alternativesto non-conventionalpopulations, has beeninstrumental in increasingaccess to high school andhigher education courses, aswell as training and‘refreshing’ more than30,000 teachers and schoolsadministrators on ICTs,math, science, language, self-learning management skills,and new theories andmethods of learning.

■ PROGRAMAVASCONCELOS developsthe capacity to learn, helpingthose in the poorest areas ofVeracruz achieve self-sufficiency. The program,winner of the Gate’sFoundation Access toLearning Award in 2008,also promotes equality inrural and urbancommunities.

■ CENTROS REBSAMEN isa statewide program of li-braries and services dedicatedto teacher training and non-conventional education.

Victor A. Arredondo, ProjectDesigner and Coordinator([email protected])David Naranjo, Project Consultant ([email protected])

Someexamples ofhis initiativesinclude:

The former Minister ofEducation in the State ofVeracruz has launchedmajor projects to reachout to even the mostunderserved ruralcommunities and improvethe standard of education

U.S. partnerships strengthen cross-border links at UAEMThe Universidad Autonomadel Estado de Mexico, orUAEM, is a public institutiondedicated to providing an ef-fective higher public educationbased on social commitment.The institution, which has beenfunctioning for almost 200years, offers education at thehigh school, undergraduate andgraduate level. It is a public in-stitution that offers a qualityeducation and 106 education-al programs to its nearly 58,000students throughout the Stateof Mexico.

Because of its excellence ineducation, UAEM has receiveda number of awards in recentyears. In recognition of its sig-nificant achievements in pub-lic education, in 2010 UAEMwas honored for the fourthconsecutive year by the Min-istry of Education for the quality of its programs and advancement in capacity, aswell as its competitiveness andinstitutional management.

In addition, UAEM also re-ceived the SEP-ANUIES Na-tional Award from Mexico’sMinistry of Education (Secre-taria de Educacion Publica,SEP) and the National Associ-ation of Universities and High-er Education Institutions(Asociacion Nacional de Uni-versidades e Instituciones deEducacion Superior de Mexi-co, ANUIES). This nationalaward was specially given toUAEM to distinguish the ef-forts the institution has takento improve the State of Mexi-co in the 21st century.

The most important recentactivity by UAEM is attempt-ing to drive organized work between the government, uni-versities and companies. Thisjoint commitment model toachieve national developmentis otherwise known as the ‘triplehelix’. In line with one ofUAEM’s main goals being to

contribute to societal bondingbetween the government, uni-versities and companies, theinstitution hosts the largest net-work of business incubators inthe State of Mexico, holdingapproximately 12 of thesespaces.

Furthermore, UAEM was al-so selected as the presidentialsite of the Mexican Associationof Centers for the Developmentof Small Enterprises, or Aso-ciacion Mexicana de Centrospara el Desarrollo de la PequeñaEmpresa (AMCDPE). AM-CDPE is an association which,through the use of theoreticaland practical tools, enables thegrowth and development of en-terprises, helping to cultivatesmall businesses into the frame-

work of a more competitive environment.

UAEM, working togetherwith associations like AM-CDPE and the Institute forEconomic Development at theUniversity of Texas in San An-tonio, will be able to have amore positive impact in thebusiness community by usingthe Small Business Develop-ment Center (SBDC) model.In this association, the institu-tions under the AMCDPEchaired by UAEM are com-mitted to providing assistancein 90 different centers that pro-vide advice and consultants tosupported businesses. The in-stitutions assist businesses inbecoming successful by takingadvantage of and exploring

their potential to be competi-tive, merge, and settle.

UAEM ideally seeks to es-tablish a platform linking Mex-ican center customers with theU.S. through the exchange ofservices between the two coun-tries. This business relationshipwill likely be very significant, asit has the potential to bring col-laborations among 100 compa-nies and the expertise ofanywhere between 1,000 and5,000 consultants. Therefore, toaid in building this platform,UAEM has become the first andonly higher education institu-tion in Mexico to hold offices ina foreign university, namely theUniversity of North Texas(UNT), one of the four most im-portant institutions in the U.S.

Since the partnership beganin February 2005, UAEM hasnot only established itself inDenton, where UNT is locat-ed, but also in two other Tex-an cities: Dallas and Fort Worth.UAEM’s office in UNT’s Col-lege of Arts and Sciences is itsmost important, as it has as-signed about half of its profes-sors and teaches approximately33,000 of its students there.UAEM’s office in UNT is notonly important, but alsounique, as although many oth-er universities hold represen-tation of foreign universities,they are usually not hosted bytheir sister institutions.

The university aspires to nur-ture the relationships of the stu-dents and faculty between

UAEM and UNT. Therefore,in order to strengthen acade-mic and student exchanges,programs are detailed to sup-port working together. This isalso done in the area of im-proving English and Spanishlanguage skills to improvecross-cultural communication.The program was successfullycarried out by the students andfaculty in 2010, leading to theopening of the American in-stitution’s representative officein the Mexican ‘Maxima Casade Estudios’, located in UNT’sAdministration Building.

The collaboration betweenchemistry researchers and pro-fessors, and later in the field ofsciences, has been fruitful andled to an almost 15-year rela-tionship consolidated in ma-jor internationalization projectsin all areas of knowledge.

At the present time, the fac-ulties participating these academic exchanges are: Ac-counting and Administration,Engineering, Economics, Po-litical and Social Sciences, Artsand Languages. Also takingpart is a UAEM group that pro-vides English summer cours-es and a Master of TeachingEnglish, which offers a doubledegree and is recognized bythe the National Register ofQuality Post-graduate Pro-grams or Programa Nacionalde Posgrado de Calidad (PN-PC). This degree is awardedby the National Council forScience and Technology orConsejo Nacional de Cienciay Tecnologia (CONACYT) inMexico.

At the moment, there aremany academic projects be-tween UAEM and UNT. How-ever, the leading projects worthmention between the two uni-versities are: mobility programsfor undergraduates and grad-uates, conducting joint re-search, and dual graduation.

The Autonomous University of Mexico State, UAEM, has almost 58,000 students at 15 campuses across the state and has opened a representative office in the University of North Texas

One of the most prestigious universities in the country, UAEM can trace its roots back to 1828 and has its main campus in Toluca

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Innovation and higherlearning in Yucatan

The state of Yucatan is grow-ing a stronger, more self-sustaining economy thanks toinstitutions such as AnahuacMayab University (UAM).Founded in 1984, the uni-versity encourages local tech-nology development, entre-preneurship and innovationamong both its students andthe local business community,key aspects for boosting growthin a region traditionally ham-pered by marginalization andgeographic isolation, says Fa-ther Jose Maria Sabin Sabin,president.

UAM is earning a reputationbeyond Yucatan as a presti-gious and increasingly inter-national center of higherlearning. It’s a member of the

Association of IndependentCalifornia Colleges & Univer-sities, and collaborates withUniversity of Portland, Uni-versity of Miami, Harvard,Stanford, M.I.T., as well as var-ious other universities aroundthe world.

“This is a university anchoredin a rich and diverse culturalenvironment, where one canlearn about the Mayan culture,open up to other languages andlive multicultural experiences,”says Father Jose Maria. “Eachand every day, more of our stu-dents are linked to local busi-nesses to develop projects.UAM is a dynamic universitythat encourages growth in ed-ucation, business and govern-ment with a global vision.”

FATHER JOSE MARIA SABINSABIN,President of Anahuac MayabUniversity

Located in the heart of Mayan territory, Anahuac Mayab University is deeply involvedwith the local community and industries, promoting innovation and collaboration

The National Institute of An-thropology and History, orINAH, was established in1939 to protect, preserve, anddisseminate the archeologi-cal and historical heritage ofMexico. The institution au-thorizes the investigation orrestoration of archaeologicalsites and has a monopoly onthe conservation of archeo-logical objects. It works to-gether with the national parkservice and U.S. universitiesto manage national parks interms of conservation,records maintenance, andtourism. INAH recently re-ceived the award for best cul-tural management of a set ofArchaeological Sites andPremises dedicated to re-search and tourism.

INAH is responsible forabout 110,000 historical mon-uments and 29,000 archeo-logical sites that werediscovered in Mexico. In ad-dition to managing the sitesand monuments, the institu-tion also acts responsibly toensure the safety of tourists,and to maximize research. “Inthe case of Teotihuacan, wherewe found a tunnel 46 feetdeep, it is necessary to takecertain protective measuresand research,” says Alfonso deMaria y Campos, general di-rector of INAH. “It would bea betrayal to open a site thatis not supported by research,and to not build up a scientif-ic base that can be criticized,published and discussed.”

INAH has a very strongacademic structure and en-gages in practices which en-

sure that the operational sitesoffer a range of services andare sustainable. “In Michoa-can, for example, many jobswere generated,” he says. “Theadvantage is that the womenare very skilled with theirhands, they have been givenjobs through the generation ofcrafts, leading to a secondfamily income. To date, wehave generated 70,000 indi-rect jobs during the past twoyears thanks to this project.”

INAH has also established

an alliance with Google,which means that INAH willbe the first institution thathas a layer in Google. “Wecreate groups of informationavailable to the user,” says Mr.de Maria y Campos. “Butthrough the website alone,we cannot reach everyone,so we advise you to Googleand come to the conclusionthat we need to create con-cepts, to raise awarenessabout INAH and all infor-mation that people need.”

The institution is intent ongenerating tourism throughjournalism and permanent in-vestigation of the sites. IN-AH aims to communicate

with the public through let-ters, television series, andnewspaper articles in orderto inform people of the his-torical and anthropologicalissues, indigenous people, andprojects that are being doneon the sites.

“We have the task of con-vincing you that culture doessell, and even if you know howto sell, it requires some knowl-edge, patience, and necessaryconditions,” comments the in-stitute’s general director.

INAH has held Mexican ex-hibits in the U.S. and as faraway as Japan. Now, it plansto open a Mayan museum inQuintana Roo’s Hotel Zone,called the Cancun Archeo-logical Museum, planned ac-cordingly with the countdownof the Mayan calendar whichis said will signal the Apoca-lypse.

“This city does not have asingle museum, so we have agreat interest not only fortourists but also for the stu-dents, although again, it hasto be sustainable,” Mr. deMaria y Campos says. “Weare holding several Mayan ex-hibitions in North America,and specifically in Canada.We will bring an exhibitionof the Mayan calendar to themuseum of the civilizations ofMontreal, together with a dis-cussion of the Mayans.”

2010 was named as the yearof Mexican archeology, andthe unparalleled work doneso far by INAH can attest tothe key role the institutionhas played in preserving thecultural heritage of Mexico.

The National Institute of Anthropology and History stands at the forefront of heritagepreservation thanks to its excellent research in anthropology, archeology, history,restoration, museology and paleontology

INAH

PreservingMexican heritageand archeology

ALFONSO DE MARIA Y CAMPOS, General Director of INAH

IN ADDITION TO ITSACADEMIC ROLE,INAH IS ALSORESPONSIBLE FORMEXICO’S 110,000HISTORICALMONUMENTS AND 29,000KNOWNARCHEOLOGICALSITES

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With lazy palm trees above andfine white sand below bare feet,lounging tourists – a bottle ofCorona in hand – at the tran-quil resort town of Puerto Val-larta, nestled within BanderasBay off the Pacific Ocean, spec-ulate eagerly on the low heli-copters circling above.

As the day goes on, the ex-citement is palpable as the swim-suit-clad vacationers realizePresident Felipe Calderon is fre-quenting their same tourist des-tination pick, shooting the ‘RoyalTour’ of Mexico for a PBS spe-cial, hosted by CBS News trav-el editor, Peter Greenberg.

Puerto Vallarta is just one ofthe many traditional stops on

Mr. Calderon’s tour to com-memorate 2011 as the Year ofTourism in Mexico. He will high-light not only the world-famousbeaches along the Pacific coastof Mexico such as Acapulco, orthe Atlantic coast like Cancun,but also the Meso- American ru-ins and the Spanish colonial cities.

Although Mexico faces somedifficult national and economicchallenges, it still remains the10th most visited country in theworld with 22.3 million interna-tional tourists and second in theAmericas, especially duringSpring Break in the United States,where it is the typical vacationparty spot for American collegestudents. This number does notinclude the more than 6 millionpeople ushered off their cruiseships each year to experience abrief glimpse of Mexico.

The government is stepping

up its efforts within the country,such as increasing connectivityand improving tourism infra-structure, seeking to maintainand increase the number of vis-itors who enjoy its rich cultureand natural beauty every year.

With the Atlantic and PacificOceans hugging the coasts ofMexico, and an array of tropicalislands, it is no secret the abun-dance of divine beaches that linethe coasts. Here tourists from allover the world enjoy from theleisurely sunbathing and snor-keling in the clear seawater tothe more extreme surfing andcliff diving. This natural beautyis paralleled by the eclectic mixof architecture and arts withinthe bustling Mexican cities. Mex-ico City, the capital with about8.84 million people, is an im-portant center of ancient Aztecculture, as well as one of the most

important financial centers inNorth America.

This Meso-American city, saidto be the site of the birth of Mex-ico by the Aztecs in 1325, boaststhe Zocalo, one of the world’slargest public plazas as well as theBullfighting Ring (Plaza de TorosMexico), along with the tradi-tional Aztec sites such as thePyramid of the Sun and the Pyra-

mid of the Moon, ancient ma-jestic structures that challengethe surrounding mountains.Tourists file through ruins ofmonuments and uncoveredcities which can be seen through-out the country from the threeprominent ancient Americancultures: the Aztecs, Mayans andOlmecs.

About 350 miles southeast of

Mexico City lies Guadalajara,where visitors indulge in the tra-ditional Mexican pleasures liketequila and the sounds of the col-orful Mariachi bands. Althoughsimilar to a modern Europeancity, here, like many smaller citiesthroughout Mexico, there is aclear mix of indigenous cultureand the marks of the 16th centu-ry Spanish colonial period.

TOURISMA feast for the five sensesExperience colonial villages,Mayan and underwaterarchaeological sites,wetlands and more

From the ancient Mayans to modern-day tourists, Mexico has a history of attracting sun worshippers

CampecheThe lung of the Northern Hemisphere

Tucked be-tween two na-tional parks onthe coast of the

Gulf of Mexico, the state ofCampeche, considered to bethe world’s second ‘lung’ afterthe Amazon for the amountof oxygen it releases into the air,is truly one of Mexico’s undis-covered gems.

Campeche boasts one of thelowest population densitiesamong Mexican states withjust 805,000 inhabitants. Over40% of the state’s 22,300 squaremiles is natural reserve. Thecapital city, San Francisco deCampeche, is a world heritagesite as is its Mayan city ofCalakmul. Indeed, Campecheis considered to be the heart ofMexico’s Mayan culture.

Campeche could also eas-ily become the breadbasketof Mexico. It is already thecountry’s main producer ofrice and corn, and a majorproducer of soy and palm oil,and Campechanos have re-cently begun growing differ-ent kinds of seaweed for usein bio-fuel.

If that weren’t enough,Campeche has oil. Its fieldshave produced 80% of Mexi-co’s oil over the last 15 years,and 25% of the country’s nat-ural gas production

Finally, Campeche is Mexi-co’s safest state. The definitionof a campechano according to both Spain’s Royal Academyand Mexico’s Academy of Lan-guage is a person of a friendlyand amicable nature.

While many Mexicans visitCampeche for its cultural of-fer, Americans come to fish.Campeche’s natural environ-ment far from the maddeningcrowds is an asset the state gov-ernment is intent on develop-ing further. Indeed, it wants torebuild the entire state econ-omy around the conservationof its natural resources. Envi-

ronmental tourism is just oneaspect of this.

Here, State Governor Fer-nando Ortega Bernes and StateSecretary for Industrial andCommercial Development En-rique Escalante speak onCampeche’s immense naturalreserves and the launch of theCampeche Green campaign.

HHooww hhaass CCaammppeecchhee mmaannaaggeeddttoo ppoossiittiioonn iittsseellff aass oonnee ooff tthheeccoouunnttrryy’’ss mmaaiinn eeccoonnoommiieess??Governor Ortega: Firstly, it’simportant topoint outthat one

of the great economic advan-tages of this state in the past,present and future is the im-mense wealth of its natural re-sources. This is evident in itsjungles, coastline, rivers,lakes, and of course, beneathits soil. In the 19th century,Campeche, along withBrazil, was the world’slargest exporter oflogwood dye at atime when indus-trial dyes didn’tyet exist. Today,ciricote andblackwood, whichare highly

valued on the internationalwood market and especially inthe U.S., are major Campecheexports. Our petroleum pro-duction contributes 379 billionpesos [$32.5 billion] per yearto the federal coffers.

Of course, we mustn’t overlook

Campeche’s contribution to theworld’s oxygen levels either. Wehave the largest biosphere re-serve in the world after theAmazon. This represents botha challenge and an opportuni-ty. There are few places in theworld with this paradox: we area significant petroleum pro-ducer and at the same time aglobal lung for purifying oxygen.

HHooww ddoo yyoouu ppllaann ttoo uussee tthheesseerreesseerrvveess mmoovviinngg ffoorrwwaarrdd??Governor Ortega: Over thenext few months, theCampeche Green campaignwill be launched through theefforts of both the state andfederal governments. Thecampaign is not only a con-servation strategy but also aneconomic policy. As 42% ofour territory is protected asa natural area, we’re facedwith the challenge of com-bining economic develop-ment with environmentalconservation, somethingwe’ve managed to do suc-cessfully so far.

We’re looking at the devel-opment of forestry, as well asadventure tourism. We’re alsoconvinced of Campeche’s agri-cultural potential, and we’reactively promoting investmentin the sector, as well as in live-stock. I’ve always said that thisis a state touched by the handof God; as we are a humid trop-ic, our soils are highly fertile.We’ve even been able to growgrapes here, which normallyneed a dry climate.

Secretary Enrique Escalante:We’re looking to strengthenour advantages, and with sucha large area of natural reserve,we have a lot to offer intourism. We want to becomeknown as a restful nature des-tination. This is what we’reportraying on the interna-tional market. This promo-tion must be accompanied byinfrastructure and a widerrange of services. We reallyhave the best of many worldshere, with nearly 350 miles ofcoastline and a mangrove for-est unique in Latin America.

WWhhaatt iinnvveessttmmeenntt iiss bbeeiinnggmmaaddee iinn iinnffrraassttrruuccttuurree??Secretary Enrique Escalante:We’re modernizing the Cityof Carmen port. It was orig-inally a fishing port, and overthe years, it has become moreassociated with Mexican Pe-troleum, or PEMEX. It’s Mex-ico’s busiest port. We’re alsoinvesting in the port at Cei-ba Beach, which will have ac-cess to rail links and athree-mile long multimodalviaduct.

Governor Ortega: The Cei-ba Beach port will representan important link with theeast coast of the U.S. Themaritime border betweenMexico and the U.S. can be-come more effective with bet-ter infrastructure in theMexican states along the Gulfof Mexico, and we’re workingalong those lines.

‘ONE OF THE GREATECONOMICADVANTAGES OF THISSTATE IN THE PAST,PRESENT AND FUTUREIS THE IMMENSEWEALTH OF ITSNATURALRESOURCES. THIS ISEVIDENT IN ITSJUNGLES, COASTLINE,RIVERS, LAKES, ANDOF COURSE, BENEATHITS SOIL’

‘WE HAVE THELARGEST BIOSPHERERESERVE IN THEWORLD AFTER THEAMAZON. THISREPRESENTS BOTH ACHALLENGE AND ANOPPORTUNITY. THEREARE FEW PLACES INTHE WORLD WITHTHIS PARADOX: WEARE A SIGNIFICANTPETROLEUMPRODUCER AND ATTHE SAME TIME AGLOBAL LUNG FORPURIFYING OXYGEN’

FERNANDO ORTEGA BERNES,Governor of Campeche

State Governor Fernando Ortega Bernes and State Secretary for Industrial and Commercial Development Enrique Escalante outline the advantages and potential of Campeche

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Welcome to Campeche, Mexico’s friendly and naturally wealthy state in the South East Mexico.

Blessed with natural resources – such as oil & gas, timber, lush forests, and fertile lands –

as well as some of the most spectacular Mayan ruins still standing today,

Campeche is a tourist and investment dream come true!

www.portal.camp.gob.mx

O a x a c a ’ srugged and iso-lated terrainhas helped the

multicultural world of the state’snumerous indigenous culturesto remain virtually intact. Themajority of these cultures live inthe state’s central valley region,making it an important tourismdestination, as visitors are drawnto archeological sites such asMonte Alban, Lambityeco, Mil-ta, and Yagul. Coastal Oaxacaboasts the major resort of Hu-atulco. As this year is the Yearof Tourism in Mexico, Oaxacais expecting a 15% jump in itsvisitor arrivals.

“We feel that tourism will fea-ture heavily in Mexico’s devel-opment, and Oaxaca has a lot tooffer,” says State Governor Gabi-no Cue Monteagudo. “We have

tourism related to our archeo-logical sites, the Dominican tem-ples, majestic colonial cities andmagnificent culinary and arti-san offers. Added to this are thecoffee plantations, ecologicaltourism, and beaches likeMazunte and Zipolite. So for us,this year is very important.”

Historically underdeveloped,Oaxaca’s economy has relied

primarily on subsistence farm-ing and, more recently, remit-tances from the large Oaxacadiaspora living and working inthe U.S. In addition to the pro-motion of its globally impor-tant historical and culturalheritage, the state has seen re-cent expansion in wind powerin the Isthmus of Tehuantepec,which has drawn in significantforeign investment, and is in-volved in the ongoing develop-ment of Oaxaca’s small andmedium businesses.

The state is a major produc-er of coffee, pineapple, bananaand Jamaican rum, and the gov-ernment is looking to boost itsvalue-added offer throughoutthe production chain, includ-ing the creation of Oaxaca’s ownexport brand. To support theseefforts, the state government

has sought financing from theInterAmerican DevelopmentBank and Mexico’s developmentbank, Nafin, to fund an $85.9million program for the sector,the Field Alliance project.

“Oaxaca’s goal, and the goalof most countries, is to firstachieve self-sufficiency in food.Many Oaxacans have had toemigrate due to the lack of a sol-id agricultural policy. With thefunds from the Field Allianceproject, we hope to modernizeour farming and irrigation tech-niques in order to boost pro-duction. We want to stem thistide of emigration. Farm work-ers make up 40% of the state’spopulation, and at the moment,most of our farming is subsis-tence. People here are hardworkers, they just need the righttools,” says Mr. Cue.

Its location on the Isthmusof Tehuantepec is also an ad-vantage the Oaxaca governmentwould like to promote throughnew investment in Port of Sali-na Cruz, on the Pacific coast,and the highway leading northto Veracruz. Representing theshortest distance between theGulf and the Pacific Ocean, theisthmus known as the Tehuan-tepec route – meaning ‘jaguarhill’ in Nahuatl – was a majorshipping route before the open-ing of the Panama Canal.

Once the Salina Cruz port ismodernized, it will be a valuablecomplement to Veracruz’s Gulfport of Coatzacoalcos, sup-porting efforts to boost Oaxa-ca’s agro-industrial potential andalternative energy sectors, whichin addition to wind energy in-clude the production of ethanol.

“We really need to take ad-vantage of Oaxaca’s strategic lo-cation,” concludes the governor.“We see a very big opportunityin constructing an industrialcorridor in the Isthmus ofTehuantepec. We have assem-bly plants, in the region of Mix-teca primarily, and we feel wehave a niche in the agroindus-trial sector.

“We also want to further de-velop our alternative energy sec-tors so that we produce our ownturbines and air generators. Re-ally, there is a lot of room fordevelopment in the Isthmus ofTehuantepec.”

OaxacaMulticultural,strategic andgrowing

‘WE REALLY NEED TOTAKE ADVANTAGE OFOAXACA’S STRATEGICLOCATION. WE SEE ABIG OPPORTUNITY INCONSTRUCTING ANINDUSTRIAL CORRIDORIN THE ISTHMUS OFTEHUANTEPEC’

GABINO CUE MONTEAGUDO,Governor of Oaxaca

With over 3.5 million inhabitants, Oaxaca is Mexico’sfifth-largest state. Well known for its indigenous cultures,such as the Zapotec and the Mixtec, Oaxaca is home tomore than 16 different native peoples

The state features archeologicalsites, Dominican temples,colonial cities and magnificentculinary and artisan offers, aswell as coffee plantations,ecological tourism and beacheslike Mazunte and Zipolitete

A more extensive version ofthis report is available at

http://unitedworld.usatoday.com/ourworld.htm

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The Mexicanstate of Quere-taro boasts along history of

leading the way. It’s here that youfind the dawn of Mexican inde-pendence, where citizens, dis-guised as members of a literarygathering, first plotted to takeup arms and demand freedom.Then, at the culmination of thisMexican Revolution, Queretarowas honored as “the place whereMexico was born” after the 1917constitution for the new freeMexican nation was signed onits land.

Now it is again leading thecountry into a brighter future.This time it’s not about forminga new state, but rather forgingeconomic growth and innova-tion as one of the most success-ful business capitals in all ofMexico.

“Mexico is a country that isfacing great challenges, and wethe Mexicans have to turn theseinto opportunities,” says Quere-taro Governor Jose EduardoCalzada Rovirosa, who explainsthat his state, of idyllic moun-tain ranges and colonial Span-ish architecture, has long beena role model for the future ofthe country. “Queretaro has al-ways been a vanguard reference,because we are the birthplace ofthe voices that are willing to

challenge the present to improvethe future.”

Geographically, Queretaro liesin an advantaged central pointof inland Mexico, connectingsmoothly the northeastern, west-ern and central Mexican high-ways, including Federal Highway57, also known as the Pan Amer-ican Highway, which extendsfrom the capital, Mexico City,through the state of Queretaroand into Laredo, Texas.

The capital of the state, San-tiago de Queretaro, was nameda World Heritage Site in 1996for maintaining the original 17th

century city plan and baroquearchitecture developed by theSpanish colonist. It is one of theprincipal tourist attractionsalongside the mystic PuebloMagico of Bernal and the Sier-ra Gorda, a famed biosphere re-serve.

Its centrality and unique sitesmake Queretaro the main inlandtourist destination in Mexico, at-tracting almost 2 million visitorsin 2009, about 8% of those fromthe United States and Canada.

But this location also logisti-cally makes Queretaro a premierlocation for national and foreigninvestment and innovation, es-pecially because of proximity toMexico City and its accessibili-ty throughout the country. Infact, many large multinational

companies have already installedtheir businesses among Quere-taro’s large automotive, service,tourism and agricultural sectors.The burgeoning developmentof industries is making this Mex-ican state a prime source for in-novation.

Renowned companies suchas Kellogg’s and the Canadian-founded Bombardier, a leadingtransportation manufacturer,have settled in Queretaro in partbecause of its dynamic andhealthy economic conditions: aGDP which has exceeded the

national average for years andone of the highest rates in thecountry of employment growthat 10.4%.

Queretaro also has one of themost stable work environmentsin Mexico. It has not had a work-ers’ strike in over 10 years and hasan abundant supply of skilledworkers paired with a high qual-ity of life.

Mr. Calzada points to low in-flation, a currency favorable toexportation, and competitive in-terests rates as stabilizing factorsin his state’s economy. But he al-

so highlights a fundamentalchange: “We have gone from be-ing a country that imports rawmaterials, manufacturing themto export, to a country that at-tracts industry and technology.”

The governor understands theimportance of investing in in-frastructure development to fos-ter stable growth. He allocates21% of the state budget towardsthe region’s infrastructure. Thestate is already equipped with astate-of-the-art international air-port, convenient train routes and15 industrial parks. The localgovernment assures that in-vestors can count on state andfederal support, especially in thedeveloping industries such asaeronautics.

Beyond physical infrastruc-ture, the governor explains thattraining its workforce is a keystep to providing skilled work-ers for business, done so by de-veloping an increasingly closerelationship between its com-panies and international schoolsas well as creating an environ-ment conducive to business.

“We are opening the doors ofthe government, carrying outindustrial deregulation to facil-itate opening new companiesand generating a climate of sta-bility,” assures Mr. Calzada.

His administration’s effortshave led to an influx of foreign

investment and a process of di-versification. The state hopes tofurther develop the aeronauticindustry, which has played anincreasingly fundamental role inthe economy the past 10 years.There’s an effort to create a phar-maceutical cluster and propelagricultural production throughthe use of greenhouse technol-ogy in addition to the alreadystrong sectors.

The governor hopes that oncepeople become aware of his statethat they will begin to investi-gate and look into the competi-tive advantages for themselvesand to see the success stories ofthe companies that have estab-lished themselves there. Hewants people to believe in Mex-ico and what it is economicallycapable of.

But he maintains that it is thelocals themselves that keepQueretaro strong and are thepeople who will continue to sup-port and promote anyone whocomes there, because they arecommitted to constantly mov-ing the country forward andmaking it better.

“The history of the success ofQueretaro has been created byits people,” he explains. “A hun-dred years after the Revolution,we try to remember that the truestrength of the Queretanos iswithin us.”

A century ago, the state of Queretaro played a key role in the Mexican Revolution. Today, it is a major player in business, industry and innovation

“QUERETAROHAS ALWAYSBEEN AVANGUARDREFERENCE,BECAUSE WEARE THEBIRTHPLACEOF THEVOICES THATARE WILLINGTOCHALLENGETHE PRESENTTO IMPROVETHE FUTURE”

JOSE EDUARDO CALZADAROVIROSA,Governor of Queretaro

QueretaroAll roads lead to this cultural and economic hub

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Desarrollos Residenciales Tu-risticos (DRT) is a companythat has focused on real estatedevelopment over the past 20years. It has established a lead-ership which places it as one ofthe largest corporations withpresence and participation incentral Mexico. During thistime it has been involved inboth the construction and in-frastructure industries.

One of the leading examplesis Parque Industrial Queretaro(Queretaro Industrial Park).With over 19,200 employees, itis home to 107 companies from14 different countries, 12 ofthem Fortune 500 companies.It has the most complete andmodern infrastructure extend-ing over an area of 1,000 acres,with an ongoing expansion ofanother 1,000 acres. QueretaroIndustrial Park is recognizednot only for obtaining in sever-al consecutive years the ‘CleanIndustry’ certificate, but also itis considered the best industri-al park in Latin America.

DRT’s involvement in theland development and hous-ing markets has lead to the con-struction of over 30,000 homesand the development of morethan 10,000 acres.

These milestones have beenachieved through strategic al-liances that the Brener Groupalong with DRT have accom-plished with world-class realestate companies and inter-national investment funds;such was the case with Hines,Pulte and currently with Ani-da (the real estate branch ofBBVA Group), Morgan Stan-ley and Temasek Holdingsamong others.

As a result of understandingthe urban dynamics, DRT de-veloped a “Land Banking” busi-

ness model which consists ofthe acquisition, entitlement, anddevelopment of large estates,contributing to a more orga-nized urban growth and a bet-ter supply of serviced parcels,thereby generating more at-tractive opportunities for homebuilders.

The steady growth of DRThas opened up new horizons,enhancing the style and quali-ty of life for its customers bycreating the first master-planned community in Mexico,Zibata, and Zirandaro, a beau-tiful real estate development.

ZZIIBBAATTAA

Zibata, located in Queretaro137 miles north of Mexico City,

draws its inspiration from anenvironmental vision of sus-tainability. Community openspaces such as bicycle lanes,parks and botanical gardens cel-ebrate the rich diversity of thenative flora. A 22-acre lake willbe the heart of the town center,a vibrant destination of shop-ping, dining and entertainment.In addition, Zibata will be hometo the first public golf course

outside of a beach resort. With-in 2,500 acres, Zibata is one ofthe most innovative destina-tions in Mexico making ‘Theimpossible, possible’.

DRT will continue to inno-vate and bring the best qualityproducts to Mexico.

ZZIIRRAANNDDAARROO

Zirandaro is the newest real es-tate development in the quaint

town of San Miguel de Allende,Guanajuato – an attractivetourist destination for theAmerican community. Only afive-minute drive away fromdowntown, its strategic loca-tion allows the residents to beat Queretaro International Air-port in just 45 minutes.

Zirandaro has first-classamenities, such as an executive9-hole golf course, its own golf

academy and club house, a rid-ing club, a wine club and ex-tensive parks and gardensdesigned by the landscape ar-chitect Michael McKay (Berke-ley, California).

Zirandaro offers a magnif-icent investment opportuni-ty for both first or secondhome buyers. It is a projectbacked by DRT, one of thelargest and best-known realestate development groups incentral Mexico; TemasekHoldings, the Asian invest-ment company with head-quarters in Singapore; and TheNieto Group, a local familypartnership with active in-volvement in the State of Gua-najuato.

With a lovingly preservedBaroque/Neoclassical center,San Miguel de Allende is acharming city that leapt tofame over 180 years ago as thefirst municipality to declare in-dependence from Spanish ruleduring the Mexican War of In-dependence.

Today, it is more famous asan artist and writers’ colony,houses several art andcultural institutes, andhas become a favoriteretirement destinationfor foreigners. Its his-toric downtown, to-gether with the nearbySanctuary of Atotonil-co (considered the ‘Sis-tine Chapel of LatinAmerica’), has been de-clared a UNESCOWorld Heritage Site.

Beyond its charm,San Miguel de Allendeis a 160,000-personstrong business-savvymunicipality located inGuanajuato, a stateknown for its agricul-ture, petroleum indus-try, mining, metalwork,and assembly plants.Here, municipal presi-dent Luz Maria NuñezFlores discusses her cityand state’s competitiveadvantages.

HHooww hhaavvee SSaann MMiigguueell ddee AAlllleennddee aanndd tthhee ssttaattee ooff GGuuaa--nnaajjuuaattoo ccoonnttrriibbuutteedd ttoo ppoossii--ttiioonniinngg MMeexxiiccoo aass aa wwoorrllddeeccoonnoommiicc ppoowweerr??

The policies that we’ve carried out here in the mu-nicipal government have en-hanced security for foreigninvestments, thereby gener-ating acceptance from coun-tries in Europe, Latin Americaand the Middle East. The stateof Guanajuato has created asource of income throughnew companies, such as Gen-eral Motors and other multi-national businesses who’ve

recently established them-selves here. This generatesemployment and wealth forthe state and for the nation.

WWhhaatt aarree ssoommee ooff tthhee mmaaiinnddrriivveerrss ooff GGuuaannaajjuuaattoo’’ssggrroowwtthh iinn tthhee llaasstt ffeeww yyeeaarrss??

Guanajuato is the onlystate with the marvelous for-tune of having two World

Heritage Sites: the city ofGuanajuato and San Miguelde Allende. Clearly, tourismis big here thanks to thewealth of these two cities.

In the industrial corridor,on the other hand, there is alot of activity among both lo-cal and foreign businesses.Here we have an importantdairy industry. There’s also acompany that produces andexports 35 tons of mush-rooms daily, making it aleader in Latin America.

SSaann MMiigguueell ddee AAlllleennddee hhaass bbee--ccoommee rreennoowwnneedd aass aa pprreeffeerrrreeddllooccaattiioonn ffoorr aa sseeccoonndd hhoommee aannddffoorr rreettiirreemmeenntt.. HHooww ddooeess tthheecciittyy ddeeaall wwiitthh ssuucchh hhiigghh nnuumm--bbeerrss ooff eexxppaattss??

Since World War II, there’sbeen a huge surge in the num-ber of North Americans com-ing to live here. The weatheris marvelous, the houses are

beautiful, and there aretwo art schools, whichhave generated an in-teresting culturalmovement.

A quarter of SanMiguel’s population isforeign, mostly Canadi-ans and Americans.We’ve also got plenty ofEuropeans and SouthAmericans. There are 70different nationalitiesregistered here, makingthis a very cosmopoli-tan city, thanks to thecultural exchanges. Consequently, the San-miguelenses have be-come quite protective oftheir traditions.

We work closelywith a security coun-cil for foreigners andwe publish crime sta-tistics on the Internet.We’re opening the da-ta up to the citizenry

so they can see the real statis-tics. This clear managementof information has allowed usto become the first municipalgovernment in Mexico to opena bilingual, specialized publicministerial agency. This helpsour foreign residents to feelcomfortable with governmentprocedures and to file com-plaints in their own language.

Recently, the CanadianPrime Minister visited and hecommented that this is the firstforeign municipality he’s visit-ed where his compatriots haveno complaints. On the con-trary, they’re pleased with thepublic services.

Making ‘the impossible,possible’, DesarrollosResidenciales Turisticos (DRT)is a property developer thatis setting new lifestyleambitions in Mexico

Zibata, in Queretaro, boasts magnificent first-class and sustainable facilities that include a public golf course, a 22-acre lake, bicycle lanes, and a rich shopping, dining and entertainment offer

SAN MIGUEL DE ALLENDE, GUANAJUATO STATE

Welcoming business andforeigners with open arms

LUZ MARIA NUÑEZ FLORES Municipal President of San Miguel de Allende

DRT unveils the country’s firstever masterplanned community

DRT’S INVOLVEMENTIN HOUSING ANDLAND DEVELOPMENTHAS SO FAR RESULTEDIN OVER 30,000 NEWHOMES AND THEDEVELOPMENT OFOVER 10,000 ACRES

MEXICO’S PREMIERREALTY DEVELOPERHAS CREATED A‘LAND BANKING’BUSINESS MODELTHAT WILL BE OFGREAT INTEREST TO HOME BUILDERS

DRT IS BEHIND THEHUGE QUERETAROINDUSTRIAL PARK AND THE NATION’S FIRSTMASTERPLANNEDCOMMUNITY ATZIBATA

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Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content

One of Mexi-co’s smallerstates, coveringan area just

over 1,900 square miles, More-los is the country’s third mostdensely packed after MexicoCity and the State of Mexico.Located in the region known as‘the heart of Mexico’, an areaboasting 40% of the country’spopulation and roughly thesame percentage of Mexico’sgross domestic product (GDP),the state of Morelos bordersMexico City to the south.

Called ‘the City of the Nev-er-ending Spring’ for its mildclimate (which has helped cre-ate a thriving fresh-cut flowerindustry), Morelos’ capitalCuernavaca is home to Cuer-navaca Valley Industrial City.Built in 1965 after the openingof the Mexico City-Acapulcohighway the decade before, theindustrial park has since flour-ished, forming the backboneof Morelos’ thriving industri-al sector.

Today, Morelos representsmore than 30% of Mexico’spharmaceutical production,and is home to world’s largestdrug companies, includingUnilever and GlaxoSmith-Kline. A second industrial pow-erhouse is the state’s automo-tive industry. Nissan establishedMorelos’ first plant nearly 40years ago, and a network of au-tomotive parts suppliers hasdeveloped since then.

Morelos also boasts a grow-ing knowledge cluster, an in-dustry the state government isintent on developing further.There are also now more than40 research and development

centers in Morelos and 160 lab-oratories, and a series of in-dustrial and technology parksare now being built to link com-panies and universities in thestate.

Consequently, the statedraws workers from through-out the country and is hailedas having Mexico’s second-bestprepared workforce after Mex-ico City. Today, commerce,transportation, services andtourism account for nearly 60%of the state’s GDP, and employroughly half of Morelos’ pop-ulation. The rise in the servicessector is a reflection of the highlevels of national migration to-ward the state and its jobs.

“The companies operating

here are technology-based,and this is exactly the field weare interested in developingfurther. In order to attractmore companies of this sort,the federal and state govern-

ments provide individual at-tention to the needs and in-centives for each company,”says State Governor MarcoAntonio Adame Castillo.

“Support at the state level

has also included the devel-opment of knowledge clus-ters aimed at gatheringtogether an above-averagenumber of highly trained personnel in science and tech-nology who are focused on in-dustrial links and innovationso that companies here canfully develop. We are devel-oping scientific and techno-logical parks that collaboratewith the universities, and anycompany moving in can be-

come involved in the projectsthey are working on.”

Other supporting infra-structure now being developedincludes the refurbishment of Cuernavaca’s airport, the construction of the MorelosWorld Trade Center, theITESM Technology Park andthe 21st Century Highway. A gaspipeline that will connect More-los to the national network is al-so under construction.

Another pillar of the stateeconomy the Adame adminis-tration is hoping to expand istourism. More than 12 millionvisitors arrive in the state eachyear to see attractions such asthe World Heritage Site of pre-Columbian Xochicalco and themajestic 16th century monas-teries of the Convent Route, aswell as the state’s national park,Lagunas de Zempoala, one ofMexico’s largest parks on thesouthern flank of the SierraMadre Mountains. Cuernava-ca itself is a popular destina-tion for Spanish languagestudents, many of whom comefrom the U.S.

“President Calderon’s strate-gy is to diversify Mexico’s

tourism offer to take better ad-vantage of the potential of theentire country. Mexico is nor-mally associated with sun andsand, but each region has enor-mous potential, whether intourism related to health, na-ture, culture, religion, or sci-ence and business. Morelos alsohas a lot to offer, a fact that hasbeen internationally recognizedby those looking for a value-added cultural experience inline with a growing appreciationfor environmental protection,”says Mr. Adame.

“We have a wonderful cli-mate, with a year-round tem-perature of 75°F, and occupy aprivileged position in terms ofbiodiversity. This gives us anadvantage in nature tourism.We are currently developingthe area around Tequesquiten-go Lake for eco-tourism as wellas other hiking areas, in addi-tion to emphasizing our cul-tural and historical assets.”

MorelosMexico’s warm heart of industryFrom agriculture and tourism through pharmaceuticalsand hi-tech industry, Morelos has a thriving anddiversified economy

‘MORELOS ALSO HASA LOT TO OFFER, AFACT THAT HAS BEENINTERNATIONALLYRECOGNIZED BYTHOSE LOOKINGFOR A VALUE-ADDEDCULTURALEXPERIENCE’

MARCO ANTONIO ADAME CASTILLO,Governor of Morelos

The World Heritage Site of Xochicalco dates back to the transitional Epiclassic Period (ca. 700-900 AD). At its peak, the city may have had up to 20,000 inhabitants

Distributed by USA TODAYThursday, July 14, 20111122 MEXICO

A more extensive version ofthis report is available at

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