Foreign investors have confidence in the Mexican economy, but not so much in domestic businessmen. Flows from abroad are breaking historic records, while local investors have preferred to take refuge in the financial market rather than invest their money in businesses and employment. Unfortunately for Mexico, the foreign contribution represents only a tenth of the total investment; The result is that the economy does not grow. And this will only happen when thousands of entrepreneurs decide to invest.
In a way, both parties are trapped. For the Fourth Transformation government, it is essential that the business world emerges from the quagmire and reactivates the economy. And it needs it because after the enormous merit of having lifted 13.5 million people out of poverty, thanks to the increase in the minimum wage and social benefits, the government is having difficulty, so to speak, financing the next cycle. He has succeeded in improving the distribution of the pie, but if the pie doesn’t grow, the only way to continue benefiting the poor is to take it away from the rich, which would eventually cause them to take their share elsewhere to keep it safe.
Lack of growth is also a problem for the entrepreneur. Failure to grow carries the risk of being overtaken by competition, of stagnating technologically, of becoming hostage to stock market fluctuations, of paralyzing wealth formation. Not investing is a temporary option during lean times, but it is not a permanent option. And the reality is that 4T government is here to stay for a while. He has been in power for seven years and will probably stay in power for another eleven years. A total of 18 years, too long to remain in a state of hibernation or almost. From a practical point of view, businessmen know that there is no competitive electoral route to change the political scenario. What there is is the 4T and the need to understand it.
Both parties know this and, in principle, both are interested in meeting. This is evidenced by the Mexico Plan, the agreements on the minimum wage, the reduction of working hours and the numerous meetings organized. But change does not come. Because? Is it just a matter of time or will resistance to investment persist and condemn us to meager and insufficient growth?
It is impossible in this space to address the reasons that explain the fear of entrepreneurs and the lack of certainty to invest. This is a complex subject that does not allow for simplistic readings. Trump and his whims and threats are only part of the explanation; but also ideological and political differences. But the essential thing doesn’t seem to me to be there. Money has no ideology; Like water, it flows wherever it finds its best channel (as demonstrated by investments in China or Singapore). A merchant will not decide whether or not to open a new branch based on the party for which he voted, but rather based on his possibilities and the calculation of success or failure; The same goes for a small industrialist. Even before López Obrador, private initiative had shown strong reluctance, as evidenced by the fact that from 2000 to 2018, average growth was 2% per year, barely higher than population growth. And undoubtedly, many of the government’s proposed fourth quarter changes have introduced additional nervousness.
Identifying the reasons why entrepreneurs do not decide to take risks is not difficult either. A tangled cocktail of obstacles of all kinds: lack of credit, insecurity and extortion, corruption, rigidity of public administration, inability to compete with imported products, customs, qualified labor, lack of energy or infrastructure, legal insecurity, among others. And, it must also be said, the vices of crony capitalism, the addiction to quick profit, rentism and speculation.
And yet, there is much both parties can do to begin to patiently and collaboratively resolve each of these issues, provided they address the following points.
1. There is no worse scenario than entrenching each person with their biases. The 4T government should start from the principle that at present the best way to fight for the poor is to create jobs and that to do this it is necessary to foster a favorable investment climate. Maintaining power simply to own coverage that is not enough to cover everyone would be a waste of the opportunity it represented to govern the country; Getting involved in the country or death, in the celebration of “we put them twice in the ballot box”, without reducing the 56% of workers who work in the informal sector, is irresponsible. Being left-wing right now means getting to work so that the majority of people have decent jobs.
2. The business sector must understand that after 35 years of loss of purchasing power for the majority, a strong adjustment is necessary. No system can be sustainable if it does nothing against the inertia that widens inequalities. For the good of all, first of all the poor, it is not only an ethical declaration, it is an essential strategy for the stability and viability of Mexican society. The question is how.
3. Neither government nor businessman is an abstraction. You both need to know each other better. 4T is many things and Morena is a political amalgam. But at present it is led by modern and professional leaders, like Claudia Sheinbaum. It has the popular support and political strength needed to explore a reasonable combination of growth and distribution. A historic opportunity that we may not have again. And vice versa. There is more to business than the dozen financial owners who make up the president’s advisory council. We understand why they are there and the exemplary character they have for the hundreds of thousands of remaining businessmen. But they are overrepresented. There is a risk that small and micro-industries, even medium-sized, which account for the majority of jobs, will not have the means to express their needs, which do not always coincide with those of big capital.
Private initiative must do more than just sit and listen to the state’s proposals and be convinced or not. This requires developing your own approach, defining in what circumstances you are ready to participate in making “poor first for the good of all” possible. And once they have it, they will find themselves halfway with the government’s proposal. The only way out for Mexico is an intelligent conciliation between political power and economic power. It is not a question of imposing one national project by punishing the other, but rather of finding the best possible version of the country that we can build together.
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