A Conversation with Carlos Urzúa, Mexico’s Secretary of Finance and Public Credit
On April 12, the Inter-American Dialogue partnered with the Wilson Center’s Mexico Institute to host a conversation with Carlos Urzúa, the current Mexican Secretary of Finance and Public Credit. Secretary Urzúa offered important insight into the goals of the administration, further supported by his previous experience as a financial advisor to Andres Manuel López Obrador during his term as Mexico City mayor. Dialogue president Michael Shifter shared this sentiment in his opening remarks, stating that the audience looked forward to learning more about the administration’s different approaches to fighting poverty and inequality while simultaneously pursuing its economic priorities.
Secretary Urzúa’s opening remarks reflected a specific focus on growth and infrastructure. The administration hopes to better distribute economic growth, particularly in “Southern” Mexico where rates are significantly slower than those in “Northern” Mexico or the “North Center” states. To address this disparity and encourage equal economic progress, he hopes to increase the investment portion of Mexico’s GDP, which is currently at 23 percent. He stated that the country needs 25 to 27 percent of investment GDP for the economy to properly grow. Nevertheless, he emphasized that the administration hopes to do this cautiously, with “well-targeted, efficient, quality investment[s].”
At the same time, Urzúa’s presentation highlighted the government’s goal to improve infrastructure across the whole country. This national objective was reflected throughout the entire speech - Secretary Urzúa continually referenced large-scale projects related to trains and transport infrastructure. He expressed certain major challenges the administration faces in this sector, including the length and cost of the construction of one high-speed train from the south to the north of the country. The project originally had a budget of 29 billion pesos, but it has cost the government over 60 billion pesos thus far with an estimated 25 billion more needed to complete the project. He also referenced the need to modernize a 100-year-old inter-ocean train, known as the Trans-Isthmic Railroad, which is located on the narrowest portion of the country and connects two key ports. This train is an essential part of Atlantic-Pacific trade. Lastly, Secretary Urzúa explained the proposal for the Tren Maya, a 15k km train covering the whole Yucatán Peninsula as well as six additional Mexican states. To handle the ambitious nature of the project, the railroad will be divided into seven parts, and the administration wants to partner with a firm to manage the project’s logistics and infrastructural goals. Referencing these specific projects, Secretary Urzúa made it clear how the Mexican government is actively promoting infrastructure development.
During the Q&A session, questions revolved around concerns about the uncertainty of USMCA and trade, the slowdown of global growth, and the negative perceptions of foreign investors on the Mexican economy. Secretary Urzúa responded by noting that Mexico is expected to have a steady growth rate of 2 percent, in line with the forecast of the Central Bank. He expressed that the López Obrador administration will continue focusing on accumulating demand for investment and honoring their loans with foreign entities.
2009 has not been a good year for U.S.-Latin America relations. Despite their warm welcome at the April Summit, Latin America’s governments made life more difficult than anticipated for President Obama.