1. Why invest in Mexico? May 14 th, 2012 1

2. Internationalization: Accenture’s formula for profitable growth 2 SOURCE: ACCENTURE, The formula for profitable growth. Geographic expansion is one of the main growth strategies for high profitable growth companies. Mexico represents an excellent business case for those companies.

3. Mexico has one of the largest growths 3 Source: Proméxico with data from Global Insigt, 2012 South Africa EU Switzerland Japan Brazil Hong Kong Canada Mexico Russia Australia USA

4. 4 Solid macroeconomic environment SOURCE: INEGI and Central Bank. 1. 1986- GATT 2. 1992- Privatizations 3. 1994- NAFTA 4. 1995- Floating Exchange Rate 5. 1996- Central Bank Independence 6. 2000- FTA with the EU 7. 2002- Investment grade 8. 2006- Prepayment of debt 9. 2008- Deregulation 10. 2011- Application to the Trans- Pacific Alliance Inflation International reserves Exports 12345678910 Inflation Exports International reserves

5. With 12 trade agreements, Mexico has privileged access to 44 countries (one billion people). We are champions of free trade 5 SOURCE: IMF, OMC, Sea Rates. Number of FTA’s and countries Our FTA’s reach 2/3 of the world’s GDP.  Part of the world’s largest economic block (NAFTA).  NAFTA market= 18 trillion USD.  And we are the gateway to Latin America. Altamira-Belem (Brazil) 10 days Manzanillo- Arica (Chile) 9 days Altamira- Philadelphia (USA) 7 days Countries with FTA Lázaro Cárdenas- New York (USA) 10 days

6. We have a high economic complexity 6 Mexico ranks in the top 20 of Harvard’s Atlas of Economic Complexity Recognizes that our country holds vast amounts of productive knowledge We manufacture and export a large number of sophisticated goods 115,000 engineers graduate every year from science and technology programs. 80% of Mexican exports in 2011 were manufactured goods. SOURCE: INEGI, Presidency and Harvard/MIT, Atlas of Economic Complexity.

7. The most competitive country in terms of costs and taxes, according to Global Benchmark Report 2011. The Alix Partners Manufacturing Outsourcing Cost Index ranks Mexico as the best country (better than BRIC’s). Source: Competitive Alternatives 2012, KPMG; Global Benchmark Report 2011, of the Danish Industry Confederation; Manufacturing Outsourcing Cost Index 2010, Alix Partners. Most competitive total costs 7 According to KPMG, in 2011 Mexico had an average cost advantage of 21% (over 19 industries), compared to the US. Baseline

8. Where the future growth will be? Main destinations and key variables to invest 8 Mexico Indonesia Korea Turkey Brazil Russia India China KEY VARIABLEINDEX 1. Macroeconomic Environment WEF, The Global Competitiveness Report 2011- 2012, Macroeconomic Environment Index 2. Open Economy World Bank, Doing Business 2012, Ease of Doing Business 3. Economic complexity Harvard University and the MIT, The Atlas of Economic Complexity 4. Total Manufacturing Cost Alix Partners, Manufacturing Outsourcing Cost Index 5. Domestic Market WEF, The Global Competitiveness Report 2011- 2012, Domestic Market Size Index 6. Demographic Bonus United Nations, World Population Prospects, The 2010 Revision 7. Workforce quality FDI Benchmark, Labor availability and quality of the Automotive OEM’s: Skills, attitudes and productivity 8. Engineering graduates UNESCO, Institute for Statistics/ International Monetary Fund. Engineering, manufacturing and construction graduates per capita 2009 9. Democratic System The Economist, Democracy Index 2011 10. Human Development United Nations, Human Development Index

9. COUNTRY BrazilRussiaIndiaChinaMexicoIndonesia South Korea Turkey BRICMIST 1. Macroeconomic environment 2. Open economy 3. Economic complexity 4. Total manufacturing cost 5. Domestic market 6. Demography 7. Workforce quality 8. Engineering graduates (per capita) 9. Democratic system 10. Human Development Index 9 Equal or above MexicoBelow Mexico, but closeClearly under Mexico Source: 1. Macroeconomic Environment: WEF The Global Competitiveness Report 2011-2012, Macroeconomic Environment/ 2. Open Economy: Doing Business 2012, Ease of Doing Business/ 3. Economic Sophistication: The Atlas of Economic Complexity, Harvard University/ 4. Total Manufacturing Cost, Manufacturing Outsourcing Cost Index, Alix Partners/ 5. Domestic Market: WEF The Global Competitiveness Report 2011-2012, Domestic Market Size Index/ 6. Demographic Bonus: UN World Population Prospects. The 2010 Revision. Forecast of total dependency rate in 2025 (population <15 & 65+ years) (15-64)/ 7. Labor availability and quality of the DFI Benchmark, Automotive OEM, Skills, attitudes and productivity/ 8. Engineering Graduates (per capita): UNESCO Institute for Statistics, International Monetary Fund. Engineering, manufacturing and construction graduates per capita 2009/ 9. Democratic System: The Economist, Democracy Index 2011/ 10. Human Development Index: UN, Human Development Index. Mexico is a well positioned country

10. Source: Goldman Sachs. The N-11: More Than an Acronym. Global Economics Paper No: 153. March, 2007/ HSBC. 1/ Goldman Sachs forecast / International Monetary Fund. 2050 1 5th place 11th place 2011 Goldman Sach’s Forecast Gross Domestic Product (Billion Dollars) Mexico will be one of the top 10 economies Goldman Sachs estimates that Mexico will be the 5 th largest economy by 2050. World's largest GDP measured by PPP (Billion Dollars) According to HSBC Mexico will be the 8 th largest economy in the world by 2050. According to Accenture, Mexico will be one of the Big Six in 2025. 10

11. 1 1 2 2 3 3 Help European companies and SME’s to internationalize their activities in Mexico. Involves implementing the actions through cooperative mechanisms that will be signed between the two governments (MOU's) for this purpose. Proposals to boost business between our countries Strengthen the image of Mexico and its position among European companies. We manufacture and export sophisticated products. We are a great destination for advanced technology, innovation and R&D projects. Strengthening our business partnership. Providing information and one-to-one assistance. Promoting strategic alliances between Mexican companies and foreign investors. Strengthen our industrial cooperation through our strategic sectors. Access to financing and grants.

12. 12 www.promexico.gob.mx caguzman@promexico.gob.mx @ProMexicoTW +52 (55) 54 47 7000 Camino a Santa Teresa 1679, Col. Jardines del Pedregal CP 01900, México, D.F. Thank you!

13. Mexico is the 7 th EU’s FDI destination 13 Source: Eurostat. http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Foreign_direct_investment,_EU-27,_2007- 2010_(1)_(EUR_1_000_million).png&filetimestamp=20111114161321http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Foreign_direct_investment,_EU-27,_2007- 2010_(1)_(EUR_1_000_million).png&filetimestamp=20111114161321 POSITIONCOUNTRYFDI (Euro 1,000 million) 1USA79.2 2Switzerland43.9 3Brazil8.8 4South Africa5.9 5China5.8 6Turkey4.2 7Mexico4.0 8Arabian Gulf Countries3.9 9India3.4 10Ukraine3.0 EU Foreign Direct Investment (2009)

14. 14 What could go wrong? SOURCE: INEGI and Central Bank. Inflation Exports 123456789 2015 1. 1982- Collapse of public finances. 2. 1985- Earthquake in Mexico City. 3. 1987- Stock market crisis. 4. 1988- Hurricane Gilbert. 5. 1994- Peso devaluation and decrease in reserves. 6. 1997- Hurricane Pauline. 7. 2005- Hurricanes Wilma and Emily. 8. 2007- Flooding in Tabasco. 9. 2009- Global Crisis.

15. Demographics are on our side Source: Oxford Economics, Creating Jobs in a Global Economy; INEGI, 2011; Population Projections for Mexico 2005-2050, CONAPO. 15  112 million inhabitants with a median of 26 years.  47 million in 2010 were in the labor force.  According to forecasts, there will be more than 60 million people of productive age by 2030.

16. Growth in labor force 16 The graph shows that Mexico will record the highest growth in labor force in the coming years, compared to other emerging economies. Source: UN Department of Economic and Social Affairs, World Population Prospects. See: http://esa.un.org/unpd/wpp/Excel-Data/population.htm http://esa.un.org/unpd/wpp/Excel-Data/population.htm

17. Quality of our labor force 17 Source: FDI Benchmark (Labor Availability & Quality/ Skills), 2011. According to the FDI Benchmark, Mexico offers a higher quality and availability of labor force and talent than India, China and Brazil.