Mexico and Brazil played a grueling 93 minutes of top notch soccer in the Olympic Men’s Soccer Finals. Mexico pulled through with a 2-1 triumph over Brazil earning Mexico a gold medal. Not only did Mexico’s soccer team beat Brazil’s soccer team, but their economy also seems to be… pulling ahead of Brazil’s economy.
According to an article from the Economist, “In recent years Brazil has outplayed Mexico, growing at 6% or more as Mexico bumped along in the slow lane. But lately that has changed. Last year Mexico grew by 4% and Brazil by 2.7%.” Mexico’s economy is on a positive trajectory of growth and expansion, and some predict that Mexico’s economy, which is currently half the size of Brazil’s economy, will be bigger than Brazil’s economy within the next 10 years.
Why are the expectations for the Mexican economy so high? Mexico has multiple factors working in their favor. First, Mexico’s ratio of debt to GDP is not even a third of Brazil’s ratio of debt to GDP. The debt to GDP ratio is an indicator of the wellness of a nation and having a low debt to GDP ratio demonstrates that the country can pay off any debt incurred in producing goods and services. Mexico’s low debt to GDP ratio indicates that the Mexican economy is healthy, and they have potential for growth. Next, Mexico has the demography for growth due to the ratio of workers in the labor force to those not working. And lastly, in December 2012, Enrique Pena Nieto will become the new president of Mexico, and he promised reforms to encourage economic growth. Currently, Brazil is less open to free trade than Mexico, which also hurts the economy.
Why is Mexico’s economy growing, while Brazil’s economy seems to be decreasing? Brazil’s GDP is projected to be below 2%, while Mexico’s GDP is projected to keep increasing. The Chinese economy has slowed down significantly, which directly affects the Mexican and Brazilian economy. Brazil’s economy benefits by exporting to China, but when China slows down, the number of Brazilian exports also decreases. In opposition, Mexico directly competes with China over exports to the United States. A decrease in the number of Chinese exports creates room in the U.S. for Mexican exports. The growth of the U.S.’s economy allows for expansion of the Mexican economy.
The economic growth projection is difficult to predict, but perhaps the Olympic Men’s Soccer Finals will act as predictor Mexico’s GDP in the coming years.
On June 20, as the G20 Summit ended at Los Cabos, Mexico, the White House published a photo of Air Force One at the Los Cabos International Airport next to President Obama’s car which had a Mexican flag on one of the front sides.
Private businesses and governments must work together in order to maximize the potential of the travel and tourism industry. That’s the word from a variety of delegates speaking at the Americas Summit during the first part of a two-hour presentation called “Working Together for Jobs and… Growth.”
“Growth in the tourism economy is attributable in no small part to the private sectors,” said Zhu Shanzhong, vice chairman of the China National Tourism Administration. “The government and the private sector must make joint efforts.”
“What is economic is strategic and what is strategic is economic,” said Thomas Nides, deputy secretary of state for the United States of America, who also emphasized the importance of cooperation within the western hemisphere. “We’re all asking what we can do to harness the power of proximity,” he told delegates. “It’s clear that Travel &Tourism will be a critical part of the equation.”
Session moderator Kathleen Matthews, executive vice president of Marriott International, posed a number of questions to Nides regarding the nation’s visa process for foreign visitors. “We’re doing an enormous amount to make it simpler to visit the United States,” according to Nides, who noted a goal for the United States to attract 100 million annual international visitors by 2021. “We just changed the rules in China. If you have a valid visa, and you want to travel in the second year, you normally have to get in your car and get the visa. Now, you can renew your visa online.” Nides noted that new U.S. consulates and increased consular staff in China, Brazil and India have also helped to speed the visa process.
The visa situation also arose as an issue during a subsequent panel discussion with tourism officials. “We’d like to go for ‘no visa’ sometime in the future,” said Mari Elka Pangestu, Indonesia’s minister of tourism and creative economy, noting that the Asian region already allows travel without visa for its citizens. “Sharing databases would be a good way to progress.”
Government and the Private Sector
In the quest to grow Travel & Tourism, “one stumbling block is regulation,” according to Marthinus van Schalkwyk, South Africa’s minister of tourism, adding that public-private cooperation “shouldn’t be only a partnership on paper.”
HRH Sultan bin Salman bin Abdulaziz Al Asud, chairman of the board and president of the Saudi Commission for Tourism and Antiquities, agreed. “Smart governments make it easy for the private sector,” he said.
Private-sector insiders weighed in during the following panel. “There are some governments leading the way and making long-term commitments to tourism,” said Tom Klein, president of Sabre Holdings.
“Let’s start with government positions related to the growth of our industry,” Klein said. “Are they erecting obstacles or tearing down barriers?” Progress has come from “having a single voice that calls for more from our government,” according to Klein, who noted that working together “has delivered some promising results” — including the first-ever national tourism strategy for the United States, embodied in the new Brand USA campaign.
Thorsten Kirschke, COO of Carlson Hotels and president of Carlson Hotels in Latin America, noted that governments play an important role in creating the infrastructure that allows Travel & Tourism to thrive. “You can have the most beautiful heritage site, but if that infrastructure is not developed, that makes it difficult to build hotels and grow in ‘nowhere-land,’” he said.
Kirk Kinsell, president for the Americas at IHG, noted that the private sector, in turn, helps to support local communities in a variety of ways. “A great deal of [hotel] ownership is by local families, local institutions,” he said. “When we open up the doors and attract people to Mexico — to Cancun or Los Cabos — eventually they’ll find their way into these little local communities, and that’s where we need to make sure they’re partnered up for a great guest experience.”
“I think the takeaway is that it’s important for us to participate in the dialogue,” said Jim Compton, executive vice president and chief revenue officer at United Airlines. “Nothing changes overnight. But when you lose consistency, you take two steps back.”
The National Hispanic Medical Association (NHMA), a non-profit organization representing the interests of 45,000 licensed Hispanic physicians in the United States, will be hosting their 16th annual conference on April 26-29, 2012 at the Washington Marriott Wardman Park in Washington D.C. The health… conference will contain information on developments in the medical field and information on medical homes, care organizations, health insurance exchanges, disease prevention, integrative care, e-health, and medical and educational resources for the growing Hispanic population in the U.S. Workshops will focus on providing individuals in attendance with information and resources on current health conditions and technological advances in the medical sphere of the economy.
Developments in Hispanic healthcare will also be discussed during the workshops. Under the theme “Innovations to Improve the Health of Hispanics, Families and Communities”, national and international experts will present on a variety of different topics applicable and vital to today’s modern medical society. Key speakers at this event include: Maria Teresa Cerqueira, the Chief of the U.S.-Mexico Border Office of the Pan American Health Organization in El Paso, Texas and Lorraine Cortes-Vazquez, Executive Vice President of Multicultural Markets and Engagement for AARP.
The three-day NHMA conference on Hispanic healthcare will also include a briefing at the White House for Hispanic Health Professionals and a visit to Capitol Hill, where staffers from Senate and House Offices will provide an update on the U.S.’ current health policy.
The first and informal gathering of the 2012 G20 summit was held in Los Cabos, Mexico last weekend, where the foreign minister of Mexico proposed to expand the current G20 agenda to include political and security matters, an idea which received the backing of U.S. Secretary of State, Hillary… Clinton.
Mexico’s foreign minister, Patricia Espinosa, argued when it comes to crucial issues that affect the lives of billions, ”the international community is failing.”
She continued to announce that the foreign ministers of the G20 would meet again this summer at the G20 leaders’ summit (June 19-20) where Mexico will be in attendance as first Latin American country to preside the G20. There, for the first time, the G20 will be lending thought to a slew of global issues ranging from green growth and food security to transnational crime. For those that are familiar with the G20’s macroeconomic focus, this represents huge progress.
Since its commencement at the November 2008 Washington summit, the G20 has been led entirely by finance ministers and central bank governors, who have fought to restrict its authority to macroeconomic issues.
The proposal coming from Patricia Espinosa and endorsed by Secretary of State Clinton, will help the G20 move to being a more general-purpose ‘steering group’ chaired by the most important developed countries -- including Mexico -- whose solid economy holds a pivotal role in the international financial system.
The United States and Mexico recently reached an agreement pertaining to the regulation of oil and gas regulations along the two countries shared Gulf of Mexico border. If this Transboundary Agreement is put into law, the United States and Mexico would have respective rights to supervise oil and gas… activities that could affect the environment. The U.S. Secretary of the Interior, Ken Salazar explained the newly formulated agreement between the two countries, “Each of the nations will maintain sovereignty and their own regulatory systems.” He went on to state, “But what this signifies, and what may be the most significant part of the agreement, is that we’re moving forward jointly with Mexico to ensure we have a common set of safety protocols.” The agreement would also permit the Mexican oil company, Petróleos Mexicanos (Pemex), as well as leading oil companies in the United States, to develop oil reservoirs in cooperation with one another along the shared Gulf of Mexico border.
It’s important for the United States oil companies and Mexico’s Petróleos Mexicanos, to work together now more than ever to ensure joint environmental safety attributed to deepwater oil drilling on the Gulf of Mexico border. In addition, the agreement will allow 1.5 million acres of territory previously claimed by the United States to be available for lease starting this summer. A research fellow at the University of Texas, Jorge Piñon commented on the relationship between the United States and Mexico, “Coordination and sharing communications, training, personnel, equipment and technology are essential for safe and productive drilling.” This diplomatic allocation of resources and commitment to cooperation is instrumental to developing safe and environmentally friendly drilling practices along the border.
During her recent visit to Mexico City, Under-Secretary of State for Foreign Affairs of Italy, Marta Dassù stated that Mexico is… becoming a profitable economic market for Italy. More and more Italian businesses, both big and small, are interested in investing and trading with Mexico because of favorable market conditions within the country. This is projected to fortify diplomatic relations between Mexico and Italy. At the Italian Embassy in Mexico, Dassù met with influential individuals in the entrepreneurial sector of the economy, including representatives from Enel Green Power and Ferrero. In addition, Under-Secretary Dassù recently attended the G20 Meeting in Los Cabos, Mexico on February 19-20.
The G20 meeting in Los Cabos, organized by the Mexican Presidency, provided a forum for discussion on the increasing imperativeness of peaceful diplomatic relations in regards to sustainability, climate change, energy efficiency, and the importance of renewable natural resources. Furthermore, with the creation of the new Italian-Mexican Business Council, favorable diplomatic relations between the two countries is expected to continue and strengthen. Mexico and Italy are committed to working together in cooperation on many environmental, political, and economic issues.
The Mexican government has been supportive of the development of biotech crops, including corn, while recognizing the genetic diversity of native corn species.
Biotech-derived crops are still not commercially cultivated in Mexico. However, the government of Mexico has continued to grant permits to developers for experimental releases of genetically-modified corn into the environment.
According to the Bio-safety Law, it is in the best interest of biotech developers to complete the experimental stage as soon as possible to begin the pilot stage and, afterwards, the commercialization stage. Mexico has no significant trade barriers to biotech crops or foods derived from biotechnology.
Mexico was the United States’ second largest agricultural trading partner in 2009, while the United States was Mexico’s principal agricultural trading partner with nearly 80 percent of Mexico’s agricultural exports going to its northern neighbor.
In 2009, U.S. agricultural exports to Mexico were valued at $13.9 billion, while U.S. imports of Mexican agricultural products were valued at a record $11.9 billion. The impact of the North American Free Trade Agreement (NAFTA) has been substantial, with U.S. agricultural exports to Mexico increasing by $9.3 billion between 1994 and 2009 and Mexican agricultural exports to the United States increasing by $8.5 billion in the same time frame. Mexico is the largest market for U.S. soy-meal, sorghum, dry beans, rice, apples, beef, dairy, swine, and turkey.
The Secretariat of Agriculture approved 23,000 acres of commercial biotech cotton for 2011 and may approve up to 500,000 acres for 2012. Mexico could be self-sufficient in cotton production by 2016 and an exporter by 2020. According to Agro Bio, biotech cotton requires only 0.4 quart of insecticide per acre instead of 4.0 to 5.0 quarts of pesticide applications for non-biotech seed.
Under the Bio-safety Law and its Implementation Rules (Reglamento), three different agencies are responsible for Mexico’s biotech policies, while the Inter-Ministerial Commission on Biosecurity and Genetically Modified Organisms (CIBIOGEM) coordinates Mexico’s biotech activities.
Despite economic unrest in both Europe and the United States, foreign investors have sought alternative methods of investment in Mexico… during the first nine months of the year. During the first three quarters of 2011, Mexico’s central bank stated that a record $24.1 billion was invested in the government fixed income market. That is an increase from the previous record of $23.1 billion investment mark set last year. According to Mexican Government officials, it remains to be seen if this upward trend will continue.
Increased investment in Mexican bonds is one of several positive economic data points that demonstrate Mexico is recovering from the global recession. In September, Mexican industrial production grew 3.6 percent over the same month the previous year. Furthermore, Mexico has the lowest tax burden among the most developed economies in the world, according to a recent report from the Organization for Economic Cooperation and Development (OECD). In its annual report, OECD detailed the tax burdens in place during 2010. The report shows that Mexico has the lowest tax to GDP ratio at 18.7 percent.
Mexico has the lowest tax burden among the most developed economies in the world, according to a recent report from the Organization for Economic Cooperation and Development (OECD). In its annual report, OECD detailed the tax burdens in place during 2010. The report shows that Mexico has the lowest tax to GDP ratio at 18.7%. …
The majority of OECD governments have stabilized the tax burden in place with the tax to GDP ratio. It has increased from 33.8% in 2009 to 33.9% in 2010, according to the OECD data from the annual Revenue Statistics publication. However, these numbers are still down from 2008 and 2007 when the ratios were 34.6% and 35.2%, respectively.
The OECD stressed that the findings show that changes in tax revenues reflect both changes in economic activity and policy measures.
“In those European countries most affected by the financial crisis and subsequent recession there was an initial sharp fall in tax revenues, but then a small recovery in the tax to GDP ratio in 2010,” the OECD stated.
“The data collected also shows that in a period when all levels of government have seen pressure on expenditure and revenues, the average tax ratio for state, regional and local governments has remained steady since 2007 while that for central government has declined,” the OECD explained.
In June 2012, world leaders will convene in Los Cabos, Mexico to discuss measures to promote the financial stability of the world and how to achieve sustainable economic growth and development at the G-20 Summit. This meeting marks the first time in history that a Latin American country is hosting the… summit, an event that brings together top Finance Ministers and Central Bank Governors every year.
The Centre for International Governance Innovation (CIGI) gathered the opinions of world experts who commented on Mexico as an emerging power and the expectations of Mexico as the summit leader including: former Prime Minister of Canada Paul Martin, chief economist of the ADB Changyong Rhee, Chair of FTI Consulting Lord Malloch-Brown, and director of economic studies at Institut Francais des Relations Internationales Jacques Mistral.
CIGI chair, Jennifer Clapp, noted issues that Mexico could bring to light at the G-20 Summit, “As an emerging power and a country that’s largely agricultural, it’s probably got more credibility to deal with these issues, and the other members might be willing to go along with perhaps more bold activities to address questions like food price volatility, agricultural production, etc.”
The United States government recently announced that it is opening its trusted traveler program, Global Entry, to Mexican citizens who are visiting the… United States. Mexican travelers to the U.S. will be able to visit automated kiosks at a variety of different international airports to undergo procedures for the Global Entry program. U.S. Ambassador Anthony Wayne stated, “Our Customs and Border Protection agency is supporting the National Migration Institute in the development of a Global Entry program for Mexico, which we expect to be launched in the first six months of 2012.”
Under the Global Entry program, Mexican travelers will be granted entry into the United Stated “in a minimum amount of time.” However, the Global Entry program will have strict rules and measures to follow, in addition to stringent membership qualifications. Applicants to the visitation program should not have a criminal record of any kind and will need to pay a fee of $100 to apply. Automated kiosks currently exist in 20 airports within the United States. However, Wayne stated that in the next year, they will appear in Mexico City and Los Cabos, too. Mexico’s tourism secretary, Glorida Guevara, stated, “It speaks of confidence in our country, but above all it’s a great opportunity we’re being given.” This initiative is an important step in the imperative relationship between the U.S. States and Mexico. Applications can be completed at: http://www.globalentry.gov.
U.S. Ambassador to Mexico Anthony Wayne and Secretary of Health Salomón Chertorivski Woldenberg met with each other to discuss issues relating to the health of their respective countries. The U.S. Centers for Disease Control (CDC) and the Mexican Government hope to work together to ensure developments in the health sector of both… populations. U.S. Ambassador to Mexico Anthony Wayne stated, “We decided to set up this meeting to being talks with the SSA (Federal Health Secretariat) on several critical matters that concern the health sector. The air of it all is to coordinate and create projects that are beneficial to Mexico and the U.S.” He also stated, “U.S. officials already have a high level of engagement with their Mexican counterparts for engaging in epidemiological research and coordinating for outbreaks of influenza or other diseases; and in the near future an epidemiologist from the U.S. Centers for Disease Control (CDC) will be joining the embassy to engage with SALUD on a number of critical studies and coordination projects. Our shared border and susceptibility to a range of infectious diseases underscores the importance of this continued cooperation.”
Because they share a border, the two countries often face similar health issues, including cancer, diabetes and obesity. Cooperation between Mexico and the U.S. may help in establishing a heightened sense of disease control along the border. They will also work together to address other issues including the prevention and control of HIV/AIDS, the use and establishment of safe medical equipment and pharmaceutical products, and the creation of new medical programs dedicated to the health and safety of those on both sides of the border.