Sheinbaum drives a new era of investment: Mexico will attract up to $4 billion a year

Claudia Sheinbaum projects a substantial increase in the attraction of Foreign Direct Investment (FDI), with estimates ranging between 3,000 and 4,000 million dollars annually.

The government of Mexico's president-elect, Claudia Sheinbaum, has announced an ambitious plan to increase the attraction of Foreign Direct Investment (FDI) flows, with an intake that would amount to between US$18 billion and US$24 billion by the end of her term, compared to the levels at which they end in 2024.

This strategy is proposed as an essential part of its management, with the intention of taking advantage of global relocation trends (nearshoring) and strengthen Mexico's position as an attractive investment destination.

Sheinbaum's strategy not only aims to increase foreign investment, but also to strengthen Mexican content in exports. The modification of the Sector Promotion Programs (Prosec) and the attraction of investments in key sectors are foreseen. 

This vision is aligned with the need to strengthen the local value chain and consolidate Mexico as a competitive destination for investment, particularly in sectors such as manufacturing and technology. The government also plans to continue to include small and medium-sized enterprises (SMEs) in these chains, which could have a positive impact on the local economy and foster more equitable growth.

One of the most important events to bring about these investments will be the U.S.-Mexico CEO Dialogue, scheduled for October 15, in which 45 large companies are expected to participate. At this platform, the Mexican government plans to present a portfolio of investment projects to be implemented starting in 2025. This strategic cooperation between the two countries reflects Mexico's potential to attract investments that will strengthen its economy in the coming years.

From a business analysis perspective, Mexico is in a privileged position to capitalize on nearshoring, thanks to its proximity to the United States, its integration into the Mexico-United States-Canada Agreement (T-MEC), and its industrial infrastructure. However, the country faces significant challenges. 

One of the critical points is the need to improve the business environment and provide greater certainty to investors, both in terms of political stability and security. The government's ability to generate an investment-friendly environment will be crucial to ensure that these projections materialize.

The impact of the relocation of companies in Mexico could translate into an increase in Gross Domestic Product (GDP) of between 0.5 and 1.0 percentage points, according to Vidal Llerenas. This projection, although encouraging, is conditional on Mexico's ability to overcome its structural weaknesses, including the lack of infrastructure development in key regions in the south and west of the country. 

Sheinbaum's administration seeks to correct this geographical imbalance by promoting investments in these areas, which could contribute to a more balanced development of the country.

Sheinbaum's government has also stressed that investments must be aligned with social and labor justice. This means that FDI-driven economic growth must go hand in hand with better working conditions and development for local communities.

While this policy of social inclusion could be a long-term strength, it could also pose a threat if strict labor regulations deter some foreign investors seeking flexibility in their operations.

Mexico closed 2023 with a new all-time high in FDI, reaching US$36.058 billion, a growth of 2.2% over 2022. This figure shows Mexico's continued attractiveness as an investment destination, although it faces increasing competition from other countries also looking to benefit from the nearshoring. Threats to the Mexican market include global uncertainty, changes in U.S. trade policies and possible instability in the region.

In conclusion, the outlook for Mexico is promising but full of challenges. The country has clear strengths, such as its geographic location and its integration into global supply chains. The opportunities are significant, especially with the trend of the nearshoring and the drive towards greater participation in high value-added exports.

However, structural weaknesses, such as insecurity and regional disparities, along with external threats, such as international competition and political risks, may hinder the full realization of these goals. The Sheinbaum administration has the opportunity to consolidate Mexico as a key player in the global economy, but its success will depend on its ability to navigate these challenges.

Collaboration: Editorial Auge.