1. Why Mexico needs a fiscal reform? the territorial dimension Paris, 26 March 2007

2. 1.Globalisation / Decentralisation 2.Growing disparities between regions 3.Ineffectiveness of conventional policies and governance Does this sounds like Mexico?

3. Territorial disparities in OECD Countries (gdp per capita 94-2000)

4. Economic Growth and Regional Disparities

5. Adopting a ‘territorial approach’ ? an example of what NOT to do… factors of national growth are strongly localised promoting national growth requires improving the use of these factors within regions regional policies

6. 1971 1996 When spending forgets the ‘regional dimension’: the case of Italy

7. Individual and territorial disparities + unused potential > Threats to Mexico’s competitiveness and cohesion 32 % 70 % MEXICO: fiscal reform can’t ignore the regional dimension

8. 3 key territorial challenges …and potential resources Dispersion Rural development challenges Concentration Urban development challenges + cross-border dimension

9. Metro-urban dimension: the case of the ZMVM Federal Government Federal District State of Mexico State of Hidalgo Delegaciones Municipalities Municipalities Non-Governmental actors metropolitan commissions…  do / can actors co-operate?  cost…63/66

10. 1. Rural Mexico not synonymous with decline 2. …nor is synonymous with agriculture Rural dimension What is the spending strategy?

11. Cross-border dimension: Mesoamerica 1.Strategic geo-political location PANAMÁ BELMOPAN SAN JOSÉ GUATEMALA TEGUCIGALPA Sto. Tomas Flores San Pedro Sula Quetzal Cutuco MANAGUA Limón La Ceiba Chetumal PUEBLA Coataacoalcos Villahermosa XPUJIL Tuxpan Tampico SAN SALVADOR Key Pacific Corridor Inter-oceanic corridors Caribbean tourism corridor SE Mexico highway expansion Central and Northern Mexico North America Europe Europe and South America South America Asia North America South America

12. Territorial approach: rethinking multi-level governance Federal Regional Local Upper Horizontal co-ordination Mechanisms Vertical co-ordination Local horizontal co-ordination Objetcive: Finding the right mix of knowledge/responsibilities/resources

13. Key issues 1)need to tackle the disparities issue 2)fiscal reform crucial for regional policy 3)regional policy can support fiscal reform long-term vision, political commitment are key