Weekly Review I December 13, 2023 by PRODENSA

GENERAL SITUATION IN MEXICO

Weekly Review I December 13, 2023

RELEVANT NEWS DUE TO THE NEARSHORING BOOM, CCE AND CENEVAL WILL TRAIN AND ACCREDIT WORKERS Due to the nearshoring boom in Mexico, the Business Coordinating Council (CCE) will promote initiatives to train employees to develop skills and strengthen employability in the country. Francisco Cervantes - the head of the CCE - expressed that the agreement with the National Center for Evaluation of Higher Education (Ceneval) will seek to promote and encourage exams so that workers can accredit and certify their knowledge acquired through valuable work experience.

ment of employees. For this reason, “we will continue to promote and encourage public-private programs and initiatives aimed at guaranteeing access to all Mexicans to an excellent and relevant education, with a focus on employability, in order to detonate their full potential.

“Accrediting the knowledge of working people is in line with the needs of the labor market, to open more and better employment opportunities in this new era of relocation, better known as nearshoring.”

Recognizing the role of the private sector as an engine of economic and social development, Antonio Avila, Ceneval’s Director General, commented: “Mexico’s integration into the knowledge society requires a joint effort to improve education, increasing its supply and quality, so it is urgent that education becomes a true public policy of social inclusion and a lever for growth”.

He reiterated that the business sector is committed to Mexico, “we are certain that in order to achieve greater development and competitiveness, we must take on the task of promoting talent, through firm actions that allow the opening of more and better growth opportunities”. Cervantes pointed out that “we are facing challenges and opportunities in which public policies on employment, education, training, and career orientation play a fundamental role, which is why it is essential to act and develop public policies that contribute to improving employability and, consequently, social mobility”. According to the President of the Businessmen, education is a key factor for social mobility, so he expressed his support and commitment to the integral develop-

He, therefore, recommended “weaving a network of alliances” between higher education institutions, governments, social actors of knowledge, and multilateral organizations, and above all a concrete and active alliance with companies, which are the real generators of employment, wealth and prosperity. Both the CCE and Ceneval will develop promotional strategies to disseminate and promote the use of the exams, adapting them to the specific needs of the private sector. SOURCE: EL ECONOMISTA

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE December 6-12, 2023

ECONOMIC AND LEGISLATIVE POLICIES • Minimum wage: The President officially announced a 20% increase in the minimum wage, effective January 1, 2024. The President acknowledged consensus in achieving this, crediting Labor Secretary Marath Bolaños and CONASAMI’s Luis Felipe Munguia. The new minimum wages were specified, with positive remarks from the President of the CCE, Francisco Cervantes, regarding the potential impact on citizens’ lives and the nation’s development. Jose Luis Carazo, representing the labor sector, emphasized the involvement of 24 union organizations in CONASAMI and highlighted the economic stimulation and benefits of the wage increase. • Executive legislative agenda: President Lopez Obrador will present several legislative initiatives to the Congress, including the reform to the Judicial Power and the electoral reform in February. He plans to propose elevating the rights of people with disabilities to constitutional status before the end of his administration. The President also discussed agreements with Teleton to provide scholarships for children attending rehabilitation centers due to the high cost of therapy for families. Regarding the National Guard, he mentioned that it is not an urgent matter, and a transition mechanism has been

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE agreed upon with legislators to separate it from the Ministry of National Defense. • Autonomous organisms: President Lopez Obrador plans to introduce an administrative reform initiative to dismantle autonomous organisms. He believes autonomous bodies like the Transparency Institute and the Energy Regulatory Commission should be abolished as they don’t serve the people. The President cited a media investigation claiming some Transparency officials used American Express cards for bar expenses. He emphasizes the need for reform and suggests that defending state entities like Pemex and CFE is hindered by certain autonomous bodies favoring private interests. • Afores and labor rights: The President addressed a reporter’s question about methods to ensure workers’ rights, highlighting advancements such as increased private sector participation for higher pensions and limitations on intermediation fees in Afores. He criticized previous reforms by Zedillo and Calderon, considering them harmful to workers. The President outlined plans for the remaining time in his administration, focusing on savings protection, Afores control, and retirement promotion. He mentioned the unrealized intention to purchase Citibanamex, aimed at safeguarding workers’ savings. The President emphasized the need for the next government to support these efforts and explore alternative solutions. JUDICIARY • Elimination of the Judicial Power’s trusts: The President discussed Justice Javier Laynez Potisek’s initiative to oppose the elimination of Trusts in the Judicial Power. Initially supportive of Chief Justice Norma Piña’s proposal to use Trusts for Acapulco

victims, the President noted a shift in position, with legal protections being filed later. He expressed skepticism, suggesting it might be a case of either double standards or the chief justice being influenced by conservatives. • Crisis in the Electoral Tribunal: When asked about the crisis in the Electoral Tribunal, specifically regarding Justice Reyes Rodriguez Mondragon’s response to calls for his resignation, the President chose not to offer an opinion. Instead, he highlighted the opposition’s lack of understanding of recent changes favoring democracy. The President emphasized the importance of electoral authorities considering the democratic legacy for future generations. NATURAL DISASTERS • Hurricane Otis and progress in the reconstruction of Acapulco: The President emphasized the end of past corruption, particularly regarding the misappropriation of the resources in the Natural Disaster Fund Trust (FONDEN). The update on support in Guerrero included efforts in cleaning and rebuilding, with 1.5 billion pesos allocated to Acapulco. Additionally, the President thanked major retail stores for maintaining affordable prices during the city’s reconstruction. Also, Lopez Obrador reported on the nearly restored electrical system and ongoing home reconstruction efforts. Support for 250,000

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE households is being completed, with certificates to be issued upon completion. Progress in appliance procurement was noted, with Chancellor Alicia Barcena closing contracts in Asia. The payment schedule for those affected by Hurricane Otis involves distributing amounts ranging from 35,000 to 60,000 pesos, with two phases: from December 9 to 18 and from December 20 to 31. INFRASTRUCTURE AND DEVELOPMENT • Investments in infrastructure projects in the South: President Lopez Obrador emphasized that ongoing infrastructure projects are addressing a historical debt to the Southern and Southeastern region, leveraging its natural resources. He discussed the redirection of oil revenue to the region and highlighted efforts to boost tourism for job creation. The near completion of the Salina Cruz port modernization and the upcoming inauguration of the passenger train were mentioned. The tendering of port administration prioritizes Mexican companies for sovereignty. TECHNOLOGY • Social media, media, and artificial intelligence: In response to a question about “digital hitmen,” the President discussed the misuse of telecommunications for intimidation and misogyny. He mentioned a proposal from Puebla and suggested legal reforms for citizen cybersecurity. The President emphasized the thin line between surveillance and censorship, urging reflection on the misuse of social media. He criticized the lack of measures by major social media platforms to ensure objectivity and ethics regarding the use of artificial intelligence. The Pres-

ident called for the development of defenses for citizens using social media, citing recent examples of news circulation involving public figures. EDUCATION AND KNOWLEDGE • PISA results in education: During the presentation of the PISA test results, the President was questioned about Mexico’s evaluation. Lopez Obrador said that these parameters were created during neoliberalism when an attempt was made to eliminate public education under the pretext of supposedly boosting the quality of education, so he doesn’t consider them important. POLITICAL ISSUES • Nomination of Mariana Rodriguez for the mayorship of Monterrey: The President, in response to a reporter’s query about Mariana Rodriguez’s candidacy for Monterrey’s mayoralty, stated that there are no legal impediments as she is a citizen with

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

the right to run for office. He praised her success and noted her popularity among middle-class and young demographics, similar to other candidates. • Alfredo Jalife case: On the arrest of Alfredo Jalife for political violence, the President mentioned that the most important thing is that he was released. He emphasized that it’s an issue that has to do with the Nuevo Leon Prosecutor’s Office, but also with a constitutional right, the freedom of ideas and with guaranteeing that there is no censorship. • Corruption in Segalmex: The President reported the recent arrest of one of the individuals involved in the SEGALMEX fraud. He mentioned an ongoing investigation and stated that the competent authority would make decisions regarding the corruption case. Lopez Obrador believed that progress

had been made in the investigations and anticipated that the opposition would attempt to attribute the only corruption case during his administration to him.

NEWS BY STATE

BAJA CALIFORNIA Tijuana Economic and Industrial Development (DEITAC) presented its activity report in which it highlighted the absorption of industrial spaces, which is estimated to close at more than 6 million square feet during 2023. More than 700 million dollars have been invested in new industrial buildings, which in the end will result in more than 6 million square feet, which will mean that they will have surpassed the estimated goal for the year. SOURCE INDUSTRIAL NEWS BC

SONORA Manufacturing, mining, and restaurants and hotels drove the growth of Sonora’s Gross Domestic Product. From 2021 to 2022, value added in the state grew by 4.8%, one percentage point above growth during the previous period. The state’s GDP reached 1 million 19 billion 812 million pesos last year, while mining and manufacturing contributed 896 billion 733 million pesos, or 39.5%. SOURCE: EXPRESO

NEWS BY STATE

TAMAULIPAS The Council of Business Institutions of Southern Tamaulipas, warned that the tourism, commercial and industrial sectors grew positively in the year that is about to conclude, this after the pandemic ended and the slow process of recovery will begin in most of the productive sectors. Jose Luis del Angel Sosa pointed out that the three aforementioned sectors achieved a growth of 5 to 8%, although there were others that are still working to reach the expected growth levels. SOURCE: LA VERDAD

NUEVO LEON The economic and growth projections for Nuevo Leon for the end of 2023 point to a better scenario than the one estimated at the beginning of this year, and where it will even surpass what was achieved in 2022, highlighted the state’s industrialists. It is expected that this year, its Gross Domestic Product (GDP) will reach an increase of 3.4%, well above the 1.3% that was forecast at the beginning of 2023. SOURCE: EL HORIZONTE

CHIHUAHUA President of Chihuahua, Marco Antonio Bonilla Mendoza, informed that the closing of this year 2023, the Municipality of Chihuahua closes with a good historical economic development, exceeding 5,200 million pesos, with strong and solid finances. In this sense, Mayor Marco Bonilla Mendoza highlighted that this year 2023, which is about to end, has been extraordinary, without a doubt, and attributed it to the attraction of events and congresses, of which the city of Chihuahua has been the venue, throughout the year. SOURCE: HERALDO DE CHIHUAHUA

NEWS BY STATE

AGUASCALIENTES With a 7,000-square-meter facility, Balluff has chosen Aguascalientes to establish its first manufacturing plant in the Americas. The German company invested 50 million euros and is projected to generate around 700 new jobs in the state by 2027. SOURCE: MEXICO INDUSTRY

SAN LUIS POTOSI Union de Usuarios de la Zona Industrial (UUZI), has good economic expectations for next year, as San Luis Potosi has become a state with inclusive and sustained economic growth that can drive progress and even create great job opportunities. This was stated by its head Enrique Villafuerte Hernandez, who also said that the state’s location is geographically beneficial for the development of industrial production and the improvement of the financial market. SOURCE: EL SOL DE SAN LUIS

GUANAJUATO During the Mentefactura Valley Meeting organized by IDEA GTO, in conjunction with the Information Technology Cluster of Guanajuato (Clutig), and the Mexican Association of Women Entrepreneurs of Leon (Amexme), the Womentefactura 2.0 program was inaugurated, which aims to train 450 women in the state of Guanajuato in Artificial Intelligence (AI). During the next six months, the women enrolled in the program will be receiving training such as: Data Analytics with Excel, Innovation 360*, critical thinking and leadership at work and storytelling with data. This program consists of a 3-month AI Practitioner Course, a 2-day remote Hackathon, and one day onsite, online Webinars every 2 weeks with industry experts. SOURCE: MEXICO INDUSTRY

NEWS BY STATE

JALISCO Jalisco’s Gross Domestic Product (GDP) grew by 5.3 percent in 2022 in real terms with respect to the previous year, according to data from the Institute of Statistical and Geographic Information of Jalisco (IIEG). The entity registered an amount of 1,783,000,505 million pesos (mdp) at constant prices, which placed it as the fourth largest economy in the country, contributing 7.4 percent of the national GDP. QUERETARO Durante este año, el estado acumula 52 proyectos de inversion concretados que en suma representan capitales por 34,000 millones de pesos y 15,293 nuevos puestos de trabajo, de acuerdo con registros de la Secretaria de Desarrollo Sustentable (Sedesu). Del total de inversiones, 27 (51.9%) han sido ampliaciones de empresas que ya tenian operaciones en la entidad, lo que es un reflejo del proceso de relocalizacion de proveeduria (nearshoring), explico el titular de la dependencia, Marco Antonio Del Prete Tercero. SOURCE: EL ECONOMISTA

SOURCE: SIKER

NEWS BY STATE

CDMX CDMX slows down in attracting new investments. In 2023, Mexico City is experiencing a significant decline in Foreign Direct Investment (FDI), particularly under the current local administration set to conclude in 2024. From January to September, the city recorded its worst performance in attracting new investments, with only 558.4 million dollars, a historic low for a comparable timeframe. The data shows a contrast with previous years, especially in 2019 when the city attracted 2,945.8 million dollars in the same period. Although 2022 was a favorable year, 2023, with Marti Batres Guadarrama as the head of the Government, witnessed a consistent downward trend in new FDI. On the positive side, reinvestment of FDI profits has been robust, with 10,410.6 million dollars recorded up to the third quarter of this year, marking the highest amount in the current six-year term of the local central administration. SOURCE: EL ECONOMISTA

STATE OF MEXICO State of Mexico bets on diversification of economic vocations . Laura Teresa Gonzalez Hernandez, the Secretary of Economic Development in the State of Mexico, discussed plans for the state’s economic development in an interview with El Economista. The agenda aims to diversify economic activities while addressing current demands, including improved salaries and reduced commuting times. The ongoing project focuses on establishing a long-term economic policy, drawing inspiration from successful cases in other states and internationally. The goal is to create a plan that will operate for the next 30 years, remaining unaffected by changes in state governments and municipal administrations. This economic policy would be implemented through the installation of seven economic development poles in the State of Mexico, the location of these centers would be based on the current highway infrastructure, the railroad, and airport networks. As well as the economic vocation of each region, from agro-industrial to industrial and, of course, commercial. SOURCE: EL ECONOMISTA

INVESTMENT NEWS NORTHEAST LGMG LGMG (Lingong Machinery Group) inaugurated its first production plant in Marin, Nuevo Leon, marking the initial phase of a previously announced $5 billion project. The facility, built in just 14 months with an initial investment of $140 million, will manufacture scissor lifts and electric articulated lifts. This investment is part of a larger plan, including additional industrial facilities and the creation of 7,000 jobs. CENTRAL MEXICO MITSUI HIGH-TEC Japanese high-tech company has decided to more than triple its initial investment to $30.2 million to build a motor core plant in Apaseo el Grande, Guanajuato, for use in hybrid and electric vehicles. Originally announced at $7.5 million, the increased investment aims to strengthen the supply system for basic motor cores in the growing global market for electric vehicles. SENOPLAST Austriac company Senoplast has invested $10 million in expanding its facility in Queretaro to increase production of plastic sheets, expanding its workforce to 253 employees in the region. The expansion, inaugurated by the Secretary of Sustainable Development, reflects Senoplast’s confidence in the state of Queretaro.

CDMX MOPAR Mopar Mexico, the spare parts division of Stellantis, is investing $189 million in expanding its Distribution Center in Toluca. The goal is to optimize service by providing faster deliveries and prominent national coverage. With over 50,000 available part numbers, Mopar Mexico’s Distribution Center plays a crucial role in the supply chain for spare parts and accessories for Stellantis. SOURCE: CLUSTER INDUSTRIAL