1. México Julieta Dorantes Maria Porto

2. Agenda. Mexico: General information about the country. Mexican Industry: quick review. Industrial Policy: what are we doing. Conclusion: study case.

3. Location. North-America North: USA South: Guatemala & Belize East: Atlantic Ocean West: Pacific Ocean

4. Characteristics. 1,973,000 km 2 Population: 97,014,867 Urban: 72,406,270 Rural: 24,608,597 Official language: Spanish Religion: 89% catholic Currency: Mexican peso

5. Political characteristics. Representative & Federal Republic ExecutiveLegislativeJuridical

6. Macroeconomic indicators. GDP : US $617.8 billion. GDP per head: US $6, 368 Growth: 0.2 % (2002)

7. Income distribution.

8. Other indicators. Inflation rate: 6.5% Unemployment: 2.46% Minimum wage: US $3 per day!!! Gross external debt: 11.8% Exchange rate: free- floatation

9. Industry. Geographic distribution.

10. Firm’s sizes according to sectors. SECTORMICROSMALLMEDIUMBIGTOTAL Agriculture & livestock4101925211665 Mining153423633264 Manufacture Textil industry28,40310,1165,2952,48446,298 Construction11,4033,27167210815,454 Total40,36913,6216,0552,63662,681

11. Micro & Small firms. 90% of the total established firms 42% of the GDP 64% of the employment

12. Industrial Policy. Human capital development Financing & taxation system Regional integration Technological change Internationalization Goal: Highest competitiveness, close the gap among Mexico and it’s international partners.

13. Financing & taxation system. Banking as a development instrument. Credit support & technical assistance. Development of secondary stock market. Create venture capital as an alternative financing source. Elimination of imports taxes. Reduction of sales tax.

14. Human Capital development. CONTIGO: Social strategy. Goals: eradicate poverty complete development of every single Mexican

15. Technological change. Soft and hard technology investment Skilled labor force Imitation of successful international enterprises

16. Regional integration. Incorporation of “productive chains” Comparative & competitive advantages Regional consolidation Competitiveness & Internal market development

17. Internationalization. Mexico: an open economy Strategic international alliances NAFTAAPEC A perfect business partner: Low –cost competitive inputs Preferential access to world-wide markets

18. Trade. Imports: US $168.3Exports: US $ 159.2

19. Exporting sectors. Exports: 1. Oil & mining 2. Agriculture 3. Manufactures: Automobiles Electronics Household appliances Textiles

20. Network of free trade.

21. NAFTA. USA, Canada & Mexico Long-term agreement 1994 signed up - 2004 tariffs will be face out 10 years to create infrastructure for a “fair competence”

22. APEC. 21 members 2.5 billion people 47% of world trade 70% of global economic growth

23. Conclusion Study case: Small textile firms. 35 years of specific targeting Stimulate import of technology: by reducing import taxes. Capital and input financial support. Simplification of administrative affairs. Results: Export growth rate: 20.3% 92% of manufacture goods exports

24. Industrial Policy. Human capital development Financing & taxation system Regional integration Technological change Internationalization Goal: Highest competitiveness, close the gap among Mexico and it’s international partners. Thank you.