Mexico: Publication of Mexican National Development Plan June 2013

Mexico: Publication of Mexican National Development Plan – June 2013

British Embassy Mexico City

Summary

President Peña Nieto presents his administration’s National Development Plan for 2013-2018. Plan’s main objective "to drive Mexico to its full potential", based on five national goals and three crosscutting strategies. Much of the Plan is based on actions and themes already included in the Pact for Mexico, although more detail is given on economic and trade policy, as well as funding for Science and Innovation..

Detail

On 20 May, the President, flanked by his Finance Minister Videgaray, presented a National Development Plan (NDP) for his administration’s six-year term.  As laid out in the Constitution, a government has to present a National Development Plan during its first six months of office. The Plan traditionally includes the objectives, strategies and priorities which the Government will work to; putting meat on the bones of the manifesto it was elected on.  Whilst the Plan doesn’t provide specific budgetary allocations for each of the five goals, it represents a framework for next year’s budget, due in December.

The Plan’s goals

The five goals of the Plan build on the main themes of the cross-party ‘Pacto por Mexico’ which was unveiled at the start of Peña’s Presidency.  They are:

  • Mexico in peace: based on strengthening democracy, security and governance.

  • An inclusive Mexico: focussed on guaranteeing social rights for all citizens.

  • Mexico with quality of education: designed to coordinate education, science and technology.

  • Prosperous Mexico: intended to enhance the country’s productivity.

  • Mexico with global responsibility: with the aim of having an active foreign policy.

The plan emphasises the importance of the development of several key areas of the economy including government spending, banking and oil. Again, mirroring the aims of the ‘Pacto’, key actions in the plan are focused on decreasing dependence on non-renewable oil revenues, reducing exposure to price shocks, better regulating state-level public debt, and improving tax collection. Projects to develop Mexico’s infrastructure through public and private financing are also featured.

Similarly, the plan calls for broadening trade liberalisation, providing legal certainty to investors and simplifying tariffs. The plan also centres attention on attracting investors by increasing competitiveness, and deepening productive integration with the United States.  On economic diplomacy, the plan specifically seeks to broaden and deepen bilateral dialogue with the United States, and build and consolidate ties in Asia as a means to diversifying the economy, particularly through the Trans-Pacific Partnership, and via Mexico’s membership of the Pacific Alliance.

The Plan also details the Mexican Government’s emerging policy on funding Science and Innovation, including the commitment to increase national investment in scientific research and technological development to a minimum of 1% of GDP. On average Mexico has invested 0.4% of GDP in Science, Technology and Innovation (STI) during the last 15 years, well below the OECD average, even though the 1% of GD target has been in the statue books for a number of years. To achieve the higher figure, the Government will look to increase public expenditure, to promote investment in STI by public higher education institutions, to incentivise investment from the private sector, and look for additional sources of international funding.

How will the challenge be met?

For the first time the Government included specific delivery and evaluation metrics in the Plan, which individual Government Department are expected to perform against, although ownership of each of the indices is not yet specified.  Under the heading of ‘democratising productivity’ (a term the Mexicans are using as a way to define strategies meant to boost productivity across the country) the Government pledges to implement policies which remove barriers limiting Mexico’s productive potential.  The Plan also eschews the productive use of resources by all economic actors, and pledges to analyse all income and expenditure policies and government programmes, in order to reduce formality. Lastly, the Plan also commits the Government to ensure access to information and the protection of personal data, to foster accountability.

These five goals will be measured using different indicators, such as the poverty headcount, the National Evaluation of Academic Achievement in Schools, the WEF’s Global Competitiveness index and the Globalisation index, among others. 

Press and Public reaction

The (Mexican) OECD Director General Jose Angel Gurria, who was in town to launch the recent biannual OECD review of the Mexican economy, welcomed the PND, recognising that it addressed most of the recommendations in recent OECD work.

Overall, press coverage was mostly factual, describing the national goals, strategies and indicators.  However some commentators were critical, particularly over the lack of impact of the consultation process.  Others highlighted how the Executive Power was not actually accountable for the results of the Plan, since its proposed goals depended on Congress’ approval of initiatives and budget.  There had also been no specific Departments named as accountable against each indicator.  Some were simply underwhelmed, due to past experience of Plans such as these disappearing into the ether shortly after their launch. The Government didn’t respond to these criticisms.

Despite the above, many have recognised that the inclusion of Indicators in this plan as differentiating it from previous administrations’ efforts. They hope that this indicates that the goals within this Plan will be pursued, and that measurable progress will be made. 

Comment

The PND represents the main “flight path” for Government policies during the next 6 years and, on its record so far, there is clearly a determination to implement it in good faith.  The main challenge on the ground is to increase productivity – Mexico’s slow growth in recent decades is generally cited as the main reason for not achieving sufficient economic dynamism necessary to create jobs, tackle poverty and increase prosperity across the country.

But implementation will not be easy. This program needs not only coordination and commitment from the Government agencies, but also a high degree of political consensus among the main parties and, the inclusion of indicators of success also highlights this Government’s preferred style of having a “to-do list”, which can be publicly followed up on and evaluated.

Disclaimer

The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report

Countries: Mexico
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