Mexico Moves into the Spotlight
Hjerpe, Heidi, PM Network
As the once-booming economies of India and China slow, Mexico is emerging as a somewhat surprising up-and-comer on the project scene.
Mexico has been dismissed by business leaders in recent years because of its reputation for extraordinary violence. There were more than 27,000 homicides in the country last year, and though drug-related killings are down in 2012 compared to the first half of 2011, several mass body dumps have kept the country in the headlines.
But other statistics point to a country on the rise: In June, Mexico's economy grew 3.8 percent from a year earlier, according to Bloomberg. The country's 4.1 percent annual GDP growth in the second quarter of 2012 was ahead of Latin American favorite Brazil, which posted 0.9 percent growth in that period.
While the risks are real, economie numbers like that are winning over the skeptics.
"The best way to improve your image is GDP growth," Luis de la Calle, an economic analyst and former Mexican trade negotiator, told The New York Times in June. Big projects such as a US$642 million solar power project and a US$167 million seaport container terminal are currently boosting that GDP potential.
Mexico's growth is not a fluke: It now ranks as the second- largest economy in Latin America.
"The country has record-high reserves, a balanced budget and low debt," says Roberto Toledo, PMP, managing partner at Alpha Consultoria, Mexico City, Mexico.
One of the primary contributors to Mexico's steady economic growth is the North American Free Trade Agreement. Since the pact was enacted in 1994, Mexico's share of U.S. imports increased from 7 percent to 12 percent, according to the CIA's World Factbook.
Mexico is also leveraging its proximity to other countries in the Western Hemisphere- and their shared time zones- to grab outsourcing projects. Mexico's outsourcing industry is expected to grow by an estimated 10 percent to 15 percent in 2012, according to MexicoIT's Going Global· Vie 2012 Investor's Guide to Mexico's Business and Technology Services. The sector is expected to hit US$13 billion by year's end, with IT accounting for roughly 60 percent of that figure, the report says.
Despite all the upsides of the Mexican marketplace, the country's aging infrastructure presents a significant stumbling block. …