The opening of the Mexican Chamber of Commerce in Great Britain just three years ago is testament to Mexico’s recent economic growth and heightened position within the international economic playing field. The Chairman of the Chamber, Mr. Yves Hayaux du Tilly, commonly referred to as the ‘Mexican lawyer with a French name on Lombard Street,’ met with KITE Invest to discuss Mexico’s economic opening, the current status of the reforms, and Mexico’s untapped potential.
KITE Invest: To begin the interview we would like to address Mexico and the current period of macro-economic growth. In your opinion what are the main forces propelling Mexico’s growth?
Mr. Yves Hayaux du Tilly: First off I would like to say thank you for being here today with the Chamber and thank you to KITE Invest for this amazing initiative.
In terms of Mexico’s growth, my personal opinion is that growth has not been terrific, even disappointing, and over the last few years it has been basically flat; however, the reforms underway makes us realize the untapped potential that Mexico has.
We find ourselves now in the second phase of the country’s transformation in a very short period of time. We must remember that Mexico had a completely closed economy until 1994 – just 20 years ago. In 1994, Mexico entered into the North American Free Trade Agreement and then Mexico became the first Latin American member to the OECD. The country began to open up and change dramatically. The measures and reforms implemented over the last 20 years leave Mexico today with a solid economic footing.
It must be taken into account that the first reform within the new set of reforms was the education reform, which is absolutely fundamental for long-term economic growth. The education reform deals with improving the level of competitiveness and the future of Mexico depends on its competitiveness. Other reforms were important and necessary and include, labour, competition, telecommunications, judicial proceedings, financial system,
The change that was required in order to realize Mexico’s potential had to do with opening the energy sector. Mexico is a powerhouse in terms of reserves in the energy sector and that growth will be seen everywhere, as it will also encompass and attribute growth in infrastructure – ports, railways, and pipelines- and in education, as we need to develop a new skilled workforce.
Mexico will grow in a manner that more people will benefit from its economic dynamism. Even though Mexico to date has been very flat in terms of growth, it is not necessarily a bad thing, because Mexico is a country that gives certainty, protection to investors and maintains a reasonable level of competitiveness.
KITE: Regarding the reforms, Christine Lagarde said, “Mexico can become the inspiration for the rest of the world to ‘dare to dream.’” Along this sentiment, what would you say are some of the main challenges of implementing the reforms?
YHT: To start, I would mention that you may not accomplish something if you cannot dream about it. The first step of transforming your reality is dreaming of a better future.
Regarding the reforms, the challenges in implementing them are tremendous. Personally, I think the most important challenges will be changing the culture of the people, enrooted in education and in convincing people to work together for a better future to all. With the election of President Peña Nieto came greater transparency in the agenda plan for his term in service, which has helped Mexico move forward. The leadership shown by this administration has set objectives, knowledge of these objectives and set an example by working together to achieve these objectives.
KITE: What impact do you foresee the reforms having on the economy and foreign investors?
YHT: The Mexican Chamber of Commerce in Great Britain opened three years ago, and it was the first Mexican Chamber to open in Europe. Although Mexico opened its economy 20 years ago, chambers of commerce only began emerging a few years ago, which says a lot about the country and the private sector.
Three to four years ago people in the UK were not so interested in Mexico, but today there is a high demand for information about Mexico. In the UK there is still a gap of information about Mexico, whereas in the United States, Mexico is more commonplace.
Today in London, people are excited about the reforms taking place in Mexico, as the country is seen as a safe haven for investors and a land of opportunities.
KITE: In terms of the Chamber, how does the Chamber promote Mexico within the UK?
YHT: There is a lack of information about Mexico in the UK. There are also perception issues, which some are unpleasant realities. Mexico’s perception issues need to be clarified and issues need to be confronted. For instance, in Mexico there is a general perception of insecurity; however, insecurity issues is limited to certain regions within a very large Country; I would say that overall, in 85% to 90% of the country it is ‘business as usual.’
Due to these perceptions and misperceptions, the Chamber has a huge commitment and role in informing, clarifying and engaging with the British about Mexico by organising a comprehensive programme of events. The Chamber is also committed to bringing together the Mexican business community as a means to help showcase the skills and dynamism of the Mexican diaspora living and working in the UK, so it has become the ideal place to meet, network and discuss Mexican related matters.
All of these efforts help make British investors more comfortable with doing business in Mexico. It is through the efforts of the Chamber, and companies like KITE Invest, that we are helping build the bridge between Mexico and the UK.
KITE: What is the strategic importance of Mexico to the UK market?
YHT: On the UK side, I have seen over the last four years that the UK government has been looking outward and identifying key markets. Mexico has been identified as one of those key markets. The UK is actively seeking out ways to attract more foreign direct invest and export more in order to grow.
Mexico is one of these markets that can provide both of these. Mexico is a country of 120 million people, with a growing middle class, a demographic bonus and consumer market. There is a huge potential for numerous synergies to be created between the UK and Mexico.
On the Mexican side, there is a growing presence of Mexico and its community in the UK. Mexican companies can also greatly benefit from expanding to the UK market, because it is within the European Union and out of the Euro Zone – London is being used as a hub by Mexican investors interested in having a European presence.