Weekly Review I January 18, 2023

GENERAL SITUATION IN MEXICO

RELEVANT NEWS

MEXICO JUMPS TO TOP 10 IN LABOR ATTRACTIVENESS BY 2022

In the midst of the effervescence due to the relocation of productive activities in the world, Mexico is well positioned in terms of human talent. At least that can be deduced by observing that Mexico is in ninth place out of a total of 10 economies with the highest labor availability, profitability, regulatory impact, and productivity, according to the Total Workforce Index (TWI) report published by Talento Solution, from the global firm ManpowerGroup for 2022.

The top 10 is comprised of: the United States, Singapore, Canada, Ireland, Australia, United Kingdom, Israel, Philippines, Mexico, and Malaysia.

According to the study, one of the factors that moved our country up 44 places is the outsourcing reform, because thanks to it, the country reduced its tempo-

rary workforce and opened a broader possibility to hire permanent personnel; a workforce whose talent has skills that are well valued in the labor market.

This analysis, which is the ninth to be carried out, is done on talent and each market is checked on more than 200 unique factors, which are grouped into four categories: Availability, Profitability, Regulation, and Productivity; and where Mexico stands out in productivity, ranking third, after the United States and Singapore.

New entrants to the top 10 this year such as Mexico, the Philippines, and Malaysia, while not outperforming the competition in Availability, make up for their score in the aspect of regulations that are exceptionally welcome by employers, whether for casual workers, permanent workers, or both.

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S Morning

Press Conference

January 11-17, 2023

NORTH AMERICAN LEADERS SUMMIT

• North American Leaders Summit: President Lopez Obrador described it as a good meeting for both trilateral and bilateral issues. He pointed out that there are very favorable elements and that the economy is very stable due to a good relationship. Regarding the immigration issue, Mexico expressed its interest in the regularization of Mexicans living in the United States, to which President Biden showed a very positive attitude.

• Foreign Minister Marcelo Ebrard reported that the Summit was a success and announced its results:

• Accelerate the integration and economic growth of North America. A team was formed with representatives from the three countries whose responsibility is to ensure that 25% of Asia’s taxes are produced in North America.

• Labor mobility. For the first time in history, labor mobility criteria were established in the region. Regular labor mobility channels between the three countries, such as the seasonal agricultural worker program, will be strengthened.

• Regularization of migrants. Promote asylum for Mexicans in the United States who are entitled to it.

• Clean energy. Mexico’s greenhouse gas reduction has been reduced by 13%, and Mexico has committed to a goal of 35% by the year 2030, which will promote the development of renewable energies.

• Security in the region. The three countries are very concerned about the issue of fentanyl and will focus on generating measures to control this chemical precursor, and particularly in Mexico to control arms trafficking.

• Pandemic preparedness. Prepare a common plan for the three countries to prevent pandemics.

• Indigenous peoples. Joint plan to combat racism in the three countries.

• The Chancellor highlighted the good personal relationship between the three presidents, who share objectives, purposes, and values they defend. Regarding the Committee for the Substitution of Imports, this is a working group for the acceleration of investments in the region, and Mexico will be represented by Foreign Minister Marcelo Ebrard, the Minister of Finance Rogelio Ramirez de la O, the Minister of Economy Raquel Buenrostro and Alfonso Romo as an independent businessman.

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S

POLITICAL AGENDA

• Governing Board of BANXICO: Regarding the appointment of Omar Mejia Castelazo to integrate the Governing Board of Banco de Mexico, the head of the Federal Executive said that, he supports the candidacy since he is a financial professional.

• Thesis of Minister Yasmin Esquivel: The Minister of the Interior, Adan Augusto Lopez Hernandez, referred that the Ministry of Public Education will send a formal response since it is not empowered to cancel any degree. The UNAM will be asked not to evade its responsibility and issue a resolution on the matter. President Andres Manuel Lopez Obrador reiterated that it is up to UNAM to issue a resolution and file a complaint to if necessary, cancel Minister Esquivel’s degree.

• South America Tour: When asked about a conference on the fight against drugs with President Gustavo Petro; Lopez Obrador commented that his Colombian counterpart has extended him an invitation and they are seeing when he can attend South America, which is a pending tour, he also has yet to go to Argentina, Brazil and Chile, for this last case, he revealed that he has an invitation to attend on September 11 on the occasion of the 50th anniversary of Salvador Allende’s assassination, so it is likely that he will take the opportunity to make a visit that includes several countries. He added that he is in very good communication with the presidents of Ecuador and Paraguay.

ECONOMY

• Tax collection: He mentioned that the economic situation of the country is fine. He showed tax collection data pointing to an increase in the first 13 days of the year of 19% over the previous year.

• PACIC: The President of the Republic, responded that a review of the prices of the basic basket is constantly being made, and the tendency is that the 24 products are going down, a price of $1,039.00 pesos (for the 24 products) was established; next Monday the Federal Consumer Attorney will explain it. If there will be a meeting, the first thing is to thank the industrialists, producers, distributors, the stores that are helping the most are three: Soriana, Chedraui, and Walmart. A meeting is about to be held to evaluate the inflation index. Yesterday, inflation in the US was released and it is helping because it is down. We want to see the results in Mexico in these first months, which in this case has been going down.

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S

HEALTH

• New regulation of tobacco and vapers: The President of the Republic mentioned that everything possible must be done to prevent diseases since it has been proven that tobacco affects health and the measures taken help in a good purpose. He pointed out that there is a lot of disagreement, but public health must be put first.

• Pulso Salud: Hugo Lopez-Gatell, Undersecretary of Prevention and Health Promotion, reported that the Covid- 19 pandemic in Mexico continues to rise in two consecutive weeks. Zoe Robledo, director general of IMSS, mentioned that in 2022 IMSS-Bienestar became a decentralized public agency. He pointed out that according to INEGI, the population without social security in Mexico is 65.6 million, of which 11 million already receive care in IMSS-Bienestar, 22 million receive care in state health services and 31 million have no affiliation with health services.

• Patria Vaccine: The Undersecretary of Prevention and Health Promotion, Hugo Lopez-Gatell, mentioned that the Patria vaccine is promoted by Conacyt. The vaccine followed all the preclinical development phases, later entered phases 1 and 2 in humans, presented evidence of being a very competent vaccine, and has two presentation proposals, injected and nasal. It is now in phase 3 clinical trial, which has become slower due to the fact that there are very few cases, but there is also the success of having vaccinated 87% of the Mexican population and therefore there are very few people who have not been vaccinated.

SECURITY

• Undersecretary of Security: In view of the resignation of Ricardo Mejia Berdeja, he indicated that the new Undersecretary of Security is General Luis Rodriguez Bucio, who served as Commander of the National Guard, who in turn will be replaced by General David Cordova Campos.

INFRASTRUCTURE

• Tren Maya: It was informed that, as of today, each of the sections of the Tren Maya will be presented in an integral manner. In July 2023, the first train will be delivered to begin testing. During the conference, the consortiums participating in the project were presented, as well as the social programs being applied in the states of Chiapas, Tabasco, and Campeche. In addition, the progress of the construction of the Palenque International Airport was reported, as well as a hotel at the same site. The security of the Mayan Train will be in charge of the National Guard with the support of the Ministry of National Defense, railroad and tourist security battalions will be created.

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S

ENERGY

• Subway Line 3: The President expressed his support to the Head of Government in the face of those who have used the accidents in the subway to attack her. The Head of Government, Claudia Sheinbaum, informed that it is false that there is a reduction in the subway budget. Next week a project will be announced with the Federal Electricity Commission, which consists of the installation of 4 transformers, an electrical substation, and an increase in the voltage of the subway. In the last few months there have been accidents out of the ordinary, for which he has requested the presence of the National Guard in the Mexico City subway, which has been granted by the President and as of today at 2:00 p.m. there will be 6,000 elements of the National Guard in the subway facilities. Regarding line 12 of the subway, the reopening of the subway section was announced for this Sunday.

• Energy sector: Regarding the disagreement of Canadian companies, the President commented that when differences arose with some U.S. companies, he offered to attend them personally with the industry officials, and met with around 40 companies, and resolved many problems. This same procedure has now been agreed with Canada and he will receive companies to resolve the issues. This dialogue could start next week with an electric energy self-supply company and with another mining company. He also reminded that the self-supply was already declared illegal by the Supreme Court, but they will find a solution with this company. It was announced that the TransCanada company, which is building a gas pipeline in the Gulf of Mexico, is the Canadian company with the largest investment in Mexico. He emphasized that Mexico is attractive for investments, and in February he will be in San Luis Potosi to announce the investment of the plant of which represents 800 million euros.

• Mining concessions for lithium: Following a question on how he will deal with these concessions, the president said that one or two companies have these concessions. However, they still do not have their papers regularized, as their application to exploit minerals does not establish lithium. He mentioned that they are lacking paperwork and they are trying to reach an agreement with them in the new regulatory framework, from which the concession is not legalized.

NEWS BY STATE

BAJA CALIFORNIA

Baja California is attractive for the semiconductor industry, since it meets two main factors: the supply of raw materials for production and the communication routes to export the finished product; in addition to specialized labor, commented Canacintra’s supply advisor.

SONORA

Around 15,000 new jobs will be generated in Sonora this year, due to the expansion of different plants in the industrial sector in the state, said the president of the National Council of the Maquiladora and Export Manufacturing Industry (Index). He also mentioned that work is being done in other regions of the state to generate more jobs, since there are almost 5,000 vacancies in Nogales, while in Agua Prieta there is significant growth in the industrial sector, as well as San Luis Rio Colorado, Guaymas and Empalme.

JALISCO

The Ministry of Economic Development (SEDECO) informed that this year it will allocate 202 million 500 pesos in incentives for various productive sectors in Jalisco, of which more than 50 percent will go to the high-tech industry. In a press release, the agency informed that of the total resources, 117 million will be applied under the Tech Hub Act public policy approach. The Jalisco Tech Hub Act policy, to be implemented by SEDECO this year, is focused on the development of suppliers, attracting investment, and Payroll Tax (ISN) incentives for the high-tech industry. The Secretary of Economic Development, Roberto Arechederra Pacheco, stated that the increase in the budget to support the productivity of micro, small and medium-sized companies, as well as to attract large investments that generate employment, is proof of the confidence that the Government of Jalisco has to maintain the positive trend and growth in the entity. “A large part of this increase will be allocated to the programs that will be aligned with the Tech Hub Act, but we will continue to support the rest of the initiatives we have in the Secretariat through two programs that will continue Desarrollo Empresarial and Jalisco Crece,” said Arechederra Pacheco.

SAN LUIS POTOSI

A relationship based on trust has been the cornerstone for the German automaker BMW to consider in its new project the possibility of San Luis Potosi once again hosting its electric car production line, which undoubtedly opens a new chapter in the history of economic growth in our state for the future, and to position our state as one of the most important entities in Mexico in the automotive industry. The Secretary of Economic Development of San Luis Potosi, Juan Carlos Valladares Eichelmann, emphasized that since his arrival to this secretariat, his objective has been clear in achieving that San Luis Potosi becomes the best investment pole, and in that path, it has been necessary a firm commitment of responsibility in order to demonstrate that the bridge that exists between the industrial sector and the government is strong and of complete openness and cooperation. He emphasized that it has been a goal set by State Governor Ricardo Gallardo Cardona that San Luis Potosi becomes the most important investment hub with the widest range of possibilities. All of the above has been part of what has been raised at the negotiation tables with the German corporation, where there is still a long way to go and where, also in detail, the directors of this great company will be the ones to disclose the fine points of a process that has been complicated and that has required absolute discretion due to its nature.

NEWS BY STATE

AGUASCALIENTES:

In Aguascalientes, the Ministry of Economic Development, Science and Technology (SEDECYT) announced the implementation of the State Program for the Development of Suppliers, through which it is committed to the growth and consolidation of micro, small and medium-sized companies in the different economic sectors of the state. For this reason, the head of the state agency, Manuel Alejandro Gonzalez Martinez, led a meeting with some of the large companies that attract local suppliers in the automotive, electronics, and metal-mechanic industries, so that they can become an integral part of this project, which aims to increase the competitiveness of MSMEs and facilitate their entry into national and international supply chains. The official explained that for eight months they will work hand in hand with the Industrial Cluster of Aguascalientes (CLIA) and the business accelerator O2X, in this program that will improve the processes and increase the productive capacities of 20 local companies to meet the needs of Tier 1 companies, which are the most important in the supply chains. Executives from Nissan, Compas, Sensata, Cooper Standard, and Tachi-s participated in this first work meeting, as well as representatives from business organizations and chambers of Aguascalientes.

GUANAJUATO

With unity and coordinated work, Michoacan and Guanajuato are a power for economic development, agreed Governors Alfredo Ramirez Bedolla and Diego Rodriguez Vallejo, respectively, at the inauguration of the Leon 2023 State Fair, where Purepecha artisans also exhibit products made with the magic of their hands and where five million visitors are expected to visit the showcase. In his message, Ramirez Bedolla affirmed that with collaborative actions the productive and artisan sector has been boosted for the benefit of the people of Michoacan. He emphasized that “it is the result of the joint work with the neighboring state of Guanajuato and proof of this is the invitation to participate in this fair for the whole country to know the cultural and gastronomic richness that Michoacan has”.

For his part, the governor of Guanajuato, Diego Rodriguez Vallejo, emphasized the strengthening of the brotherhood between the two states and told Alfredo Ramirez Bedolla that “you are one of the Governors who has been most committed to work and coordination and that is appreciated”

In turn, David Novoa Toscano, president of the Board of Trustees of the Leon State Fair, said that this edition is expected to attract 5 million visitors to visit the livestock and handicrafts expo, the sale of industrial products, traditional cuisine, and attractions such as mechanical games, Disney Mist, and the ice rink.

QUERETARO

During this year, Queretaro’s economic policy will be based on taking advantage of the nearshoring trend (relocation of suppliers), attracting investments, as well as promoting entrepreneurship and supplier development, according to the Ministry of Sustainable Development (Sedesu). The supplier relocation strategy will be one of the pillars of the state’s economic development agenda, as it is a phenomenon that represents historic opportunities for both the state and the country, said the Secretary of Sedesu, Marco Antonio Del Prete Tercero. “We are going to focus our efforts on nearshoring, taking advantage of these possibilities, which are a historic opportunity for Mexico and for Queretaro,” he said. The attraction of investments will be a complementary element of the local economic guideline, due to the fact that there is a portfolio of 60 investment projects, which if materialized will represent capital for 95,000 million pesos and 27,000 new jobs for the entity.

NEWS BY STATE

CDMX

The head of the Mexico City Government, Claudia Sheinbaum, announced that security in the Collective Transportation System (STC) Metro will be reinforced by 6,60 unarmed members of the National Guard, after a series of “out of the ordinary episodes” were reported following the train crash on Line 3; she even revealed that one of the black boxes of the convoys involved was found in a van.

President Lopez Obrador came out in defense of the head of Government and pointed out that she has “all our support”, after the attacks she has received due to the accident reported in Line 3 of the Metro, in which a young woman died and 106 people were injured.

STATE OF MEXICO

Alejandra Del Moral Vela, Coordinator for the Defense of the State of Mexico, reported this Tuesday as an aspiring PRI pre-candidate for the state governorship, with the purpose of running in the elections of June 4. Alejandra Del Moral, who attended the registration session for said purpose, before the State Commission of Internal Processes of the tricolor, for the reception of applications for the 2023-2029 gubernatorial process, delivered the corresponding documentation.

INVESTMENT NEWS

NORTHEAST

BMW

The German company plans to invest $866 million dollars in San Luis Potosí.

SKY JACK

The Canadian company dedicated to the manufacture of aerial platform vehicles has made it official that it will invest $80 million dollars in Ramos Arizpe, Coahuila. This investment will generate 460 jobs.

CDMX

PERFETTI VAN MELLE

The third largest confectionery and chewing gum manufacturer has decided to invest $40 million dollars more to start an expansion in the Toluca 2000 Industrial Park, which will add 300 new jobs to the entity.

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