PUBLIC-PRIVATE DIALOGUE IN THE STATE OF AGUASCALIENTES, MEXICO Armando Jiménez, Ph.D Paris, 1 February 2006

CONTEXT Aguascalientes is at the forefront of PPD in Mexico Mexico, from a controlled economy to a market-oriented one –Past experiences in Mexico in PPD were marginal. (Pacts & Nafta) –Gradually, the presence of the government in the economy decreased and dialogue with private sector emerged. Aguascalientes, the “Mexican Asian Tiger” –A small, industrialized state, characterized for the best business climate and the highest standards of living in Mexico. –Many local government officials have a private sector background, and some businesspeople have experience in public service. –Champion for dialogue: Current governor (Luis Atmando Reynoso) is a succesful entrepreneur and promoter of PPD.

OBJECTIVES The objectives of PPD in Aguascalientes are: To promote participation of the private sector in the governmental decision-making process. To create and strengthen committees that promote dialogue. To improve transparency in public and private administration. To facilitate communication between both sectors.

3 SUCCESFUL EXPERIENCES January First workshop on public policies for economic and social development with private and public participants (World Bank). March, First workshop on competitiveness for the State of Aguascalientes (World Bank). The main collaboration result was the proposal to create a formal structure for the improvement of competitiveness. The agreements reached in the workshops were also reflected in the State Development Plan Building Economic Policy through PPD (Workshops on Public-Private Competitiveness policies)

3 SUCCESFUL EXPERIENCES 2. Building a local Public-Private Partnership (PPP) Model This year, Aguascalientes will become a pioneer State in Mexico in establishing a PPP program at the local level. It will be necessary to modify some key aspects that law did not considered in the past. At this point, in Aguascalientes the government, the private sector and also the local Congress, are working together on the legal and economic-feasibility analysis.

3 SUCCESFUL EXPERIENCES 3. Negotiating the establishment of a new levy Government invited the private sector to an open dialogue to discuss the introduction of the payroll tax in the State. Its rate and the creation of a trust to allocate the resources obtained by this levy were also discussed. Government proposed that the trust would be integrated by five delegates from the private sector and five public officials. Such scheme allows the private sector to become an active partner in policy making and the allocation of public resources.

RESULTS In the recent Doing Business Study (World Bank, 2005), Aguascalientes was awarded first place in business climate in Mexico. Aguascalientes also obtained a high ranking at a global level, compared even with developed countries. As a follow up to this result, a commitment with the World Bank was established to improve competitiveness.

RESULTS Doing Business Results

RESULTS Several action lines proposed and implemented in the State Development Plan in order to enhance competitiveness, e.g.: –To implement a system of indicators on business climate. –To identify (jointly with private organizations) responsibilities for economic development. –To reestablish Aguascalientes as one of the best destinations for foreign investments. –To create a State Committee for Regulatory Improvement, Transparency and Accountability together with the private sector.

RESULTS In 2005, the Financial Times named Aguascalientes State as having the second-best FDI promotion strategy in Mexico. There have been several cases of interviews and reports on television and newspapers, witnessing the progress of private-public dialogue in the state.

ADDITIONAL INSTRUMENTS Two Committees for Competitiveness have been created at the State and Federal level. Workshops on Better Practices in Competitiveness with the Presidency of Mexico. Development of a system of State Indicators to measure competitiveness with the National Statistical Institute. To extend the Doing Business Study (World Bank) in all Mexican States.

THANK YOU