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Miami Group Launches with Mexican Finance Minister Agustín Carstens

By Christian Gomez
November 1, 2007

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The Inter-American Dialogue launched the Miami Group on Western Hemisphere Affairs with a dinner on November 1st at the Four Seasons Hotel in Miami featuring Mexican Finance Minister Agustín Carstens.  Speaking to a group of corporate, financial and civic leaders from South Florida, Carstens discussed the advances made since Felipé Calderón's inauguration on December 1, 2006 and the outlook for the Mexican economy. 

The new administration has made significant strides in the areas of governability, organized crime, and relations with Congress.  Despite a closely contested election, Calderón didn't hesitate to make “strong decisions” such as deploying the armed forces against drug traffickers. A year ago few would have thought that Mexico would be as stable as it is.  These efforts are, however, “just the beginning of a long fight.” Improving security must continue to be a cornerstone of the country’s development strategy.

Mexico faces two key economic questions: 1) how to grow faster; and 2) how to deal with economic turbulence in the United States.  To grow faster, Mexico must promote better functioning markets, seek infrastructure investments, and open the economy to greater competition.  Pension and fiscal reforms --which Calderón and Congress worked to pass in 2007-- are the first economic reforms in a decade.  Additional fiscal reforms will still be needed.  With the lowest share of non-oil tax revenues in the world, “Mexico is addicted to oil from a fiscal point of view.”  As a result of already enacted reforms, Carstens expects projected GDP growth for 2008 to increase from 3.5 percent to 4 percent.  If telecom, energy, and labor reforms are enacted soon, Mexico should move closer its rate of growth closer to six percent, where it should be. 

Compared to the US recession in 2001-2002, Mexico is in a much stronger position today.  Back then, fiscal revenues contracted, oil prices were low, and job creation declined.  This time around fiscal revenues are increasing, oil prices are high, and jobs are being created.  Mexico, in short, should weather current US economic turbulence much better.

More coverage:

"Agustín Carstens: Newsmaker." Latin Business Chronicle. Joachim Bamrud. November 6, 2007.

"Destinado Reclamo." El Semanario (México). Dolia Estévez. November 8, 2007.