Strategic Plan = Economy Growth?

ESEUNE Business School Weekly Articles

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Alejandro Martin Tamayo

Alejandro is an industrial engineer graduated from Universidad Autonoma de Baja California (UABC), Mexicali. He is equipped in accounting and finance consulting training, in addition to the lean manufacturing certification (Green Belt). Alejandro has relevant work experience across its professional career, such in Automotive manufacturing and Accounting and Finance consulting on multinational companies . Alejandro is a dedicated and hard working professional focused on innovating and investment attraction. he currently lives in Tianjin, China where he is studying his MBA focused in global emerging markets.

In my previous article, I explained the importance of a country’s image to attract foreign investors. During my MBA, I have ben analyzing Mexico’s importance in economics and political strategies. As mentioned before, Mexico’s greatest disadvantage is that is in Red Alert area in the World Corruption Perception Index. Even though it is, “ranked 2nd in Latin America and 31st globally in terms of the best conditions for entrepreneurship”, according to the Index of Systemic Conditions for Dynamic Entrepreneurship (ICSEd).

México appeared in the 9th position in the ¨Breakdown of components of average real growth in GDP at PPP (2011-2050)¨ delivered by Price Waterhouse Cooper. Another mind blowing economic metric is that Mexico by 2050 is projected with a GDP at PPP of 7,409 US$BN, in front of Germany, France and UK. Mexico is expected to enter the top 5 in foreign investments derived to its closeness with the USA, low labor cost, and high natural resources.

So we can conclude that the landscape of Mexico looks good? Yes, but this projection can change if we do not develop correct and real economic and political strategies to secure the economic growth of México.

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I am going to explain the two most important Strategies that China produced in this five-year plan to show the importance of a correct economic and political policy. The first one is call, ¨One belt one road,¨ that is a development strategy and framework, proposed by the People's Republic of China. Its primary focus is on connectivity and cooperation among countries primarily in Eurasia, which consists of two main components, the land-based "Silk Road Economic Belt" (SREB) and oceangoing "Maritime Silk Road" (MSR). The strategy underlines China's push to take a bigger role in global affairs, and its need to export China's production capacity in areas of overproduction such as steel manufacturing. The other strategy that China developed is called ¨Shanghai Free Trade Zone¨ which consists of a unified airport, seaport, or any other designated area for duty-free import of raw materials, components, sub-assemblies, semi-finished or finished goods. Such items can be stored, displayed, assembled, or processed for re-export or entry into the general market of the importing country (after paying the required duties). Also called foreign trade Zone or free zone.

China has positioned itself as the number one export in the world because it has cheap labor and fortune 500 companies are encouraged to invest. Although Mexico has cheap labor, fortune 500 companies are afraid to invest in a volatile country with high corruption and delinquency. We have a perception to change, and we must act fast to encourage other countries to come and invest. We are capable of competing with any other country in the world, the only thing that holds us back is ourselves.


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