Panel
Mexico as a Global Powerhouse
Milken InstituteMichael Milken, Thaddeus Arroyo, Pedro Aspe, Francisco González Díaz, Alan Schwartz, Blanca Treviño
- Domestic inflation is projected to rise from 2% to 2.1% amidst a 30% currency depreciation over 18 months, with political independence concerns potentially exacerbating high inflation.
- Trade disputes between the US, Canada, and Mexico are expected to remain absent due to mutual deterrence, continuing a seven-year streak of resolved conflicts.
- Electricity prices relative to Texas are anticipated to remain a significant barrier to competitiveness due to current tax and service environments.
- A 150% price differential for vehicles between Mexico and other Latin American countries is predicted to diminish as the region shifts focus toward aeronautics and technology.
- The telecommunications sector is set to undergo transformation with a goal of deconcentrating a market holding 70% concentration, following a 20% price drop last year.
- AT&T plans to complete over halfway building next-generation 4G LTE wireless services to cover a population exceeding 100 million by the end of 2018.
- Smartphone penetration is forecast to increase from 34% at the start of the year to over 50% nationally and 75% within the company.
- Mexico's digital infrastructure is expected to achieve world-class status comparable to the United States by 2020.
- A shortage of approximately one million IT programmers in the US by 2020 presents an opportunity for Mexico to supply talent and services.
- Educational reforms are expected to benefit small and medium enterprises and technicians, not just engineers, fostering companies capable of competing globally in India, China, and Europe.
- Exports and imports between Mexico and the US are projected to grow tenfold over 20 years, resulting in a North American automobile supply chain composed of 45% US, 35% Mexican, and 20% Canadian content.
- Emerging market economies currently constitute over 50% to 60% of the global economy, driving a shift toward consumption in emerging markets while North America leverages unit labor cost advantages for production.
- Central American markets are anticipated to open significantly for the first time in years, integrating into a North American network of over 400 million people with digitally erased borders.
- Tourism is growing at 20% annually for the last three years, attracting 32 million travelers, while the real estate sector saw $22 billion in investments over four years with four major REITs entering the market.
- Productivity in the energy industry is expected to increase by 1,000% to 1,500% as Pemex moves toward farm-outs to approach US levels.
- Demographic shifts, including a young population and rising middle class, are driving migration acceleration despite lower birth rates, drawing global interest from regions like Venezuela.
- Manufacturing growth and policy changes are expected to correct narratives regarding the country, while immigration flows are described as nearly balanced between outward and inward movements.