[Image: havilchis – Flickr]
After a few years of stagnancy, Mexico’s economy has been picking up due to injection of capital from international pension funds around the world. For many years, Mexico has been in the shadow of Brazil, Latin America’s fastest progressing emerging market. However, this year alone Mexican companies have raised almost $10 billion USD in investment. Brazilian engineering, construction and petrochemical conglomerate, Odebrecht, sees the opportunity in Mexico and has pledged to invest $8.1 billion over the next five years. The nations are often competitors, so this will be the largest investment from a Brazilian firm to date.
Many are attributing the growth to the election of Enrique Pena Nieto, who has been passing a series of market-friendly regulations to bring life to the country’s energy and telecommunication sectors. This new and effective policy making comes at a time when competitive emerging markets are experiencing political and social unrest that is affecting their economies for the short to medium term. Additionally, higher transportation costs from China have made Mexico a competitor in the manufacturing sector. All of this paired to the link between the U.S. economy with the Mexican economy, means as the U.S. economy does well so does the Mexican economy.
Do you think Mexico is a contender to become Latin America’s most prosperous nation? Are these effects of new leadership or other microeconomics conditions?
More on Odebrecht’s investment in Mexico: http://www.reuters.com/article/2013/10/01/us-mexico-odebrecht-idUSBRE9901EV20131001
Interested in hearing more about the fastest growing Latin American markets? You should attend Private Equity World Latin America or Real Estate Investment World Latin America.
