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Bajio Alliance: Mexico’s strongest region un...

Bajio Alliance: Mexico’s strongest region unites

For many years, the states of Central Mexico—a region known as “El Bajio”, which includes the states of Aguascalientes, Guanajuato, Querétaro, and
San Luis Potosí—have stood out nationally and internationally for the strength of their people, their territory, and their economy. It was not until recently, however, that their isolated efforts sparked a question among their governments: why don’t we work together?

In November the “San Miguel Agreement” was signed by late 2018 to address that question. This event became a milestone, for it was the first investment, production, logistics, exports, education, sustentability, and security alliance created in the interior of the country. Its main objective is to boost the region’s social and economic development in a collaborative and coordinated way.

“It’s time to consolidate the region as a top-level innovation platform. It is necessary to create a synergy that allows us to make the most of our country’s treaties in force so that our growth can bene t the people”, pointed out Aguascalientes Governor Martin Orozco Sandoval.

These four states have united to create something that can be compared to a small nation with great economic potential. In population terms alone, they have over 12.4 million inhabitants, a figure that is closely comparable to that of Greece and Belgium. And, it exceeds the number of people living in Sweden, Portugal, and the Czech Republic.

These four Mexican powers accumulate more than 11% of the national population, with a territory that stretches roughly 109 thousand square kilometers. Were the region a country, it would rank amongst the top 100 in the territory category, above nations like South Korea, Iceland, and Hungary.

In terms of economy, these states lead the growth of Mexico. A clear example is their gross domestic product, which combined represents a little over 89 billion dollars, a GDP similar to Slovakia’s and larger than Costa Rica’s, Uruguay’s, and Bulgary’s. Moreover, their projected annual economic growth is between four and five percent, which doubles the national expectation of 2.5 %.

A GLOBALIZED REGION

To a large extent, El Bajío’s economic dynamics has been support- ed by an attractive Foreign Direct Investment (FDI) climate, which has encouraged the arrival of new, high value-added companies from the automotive, information technologies, and aerospace sectors.

Nissan and COMPAS occupy a central space in Aguascalientes, while Guanajuato is strong thanks to big players like General Motors and Mazda. The same can be said of Querétaro, with Boeing and Bombardier, and San Luis Potosí, with companies as important as BMW and Cisco Systems.

In the last years alone, these states’ FDI went over 11.2 billion dollars, which represents more than 17.6% of the total foreign investment in the country (63.6 billion dollars). Guanajuato contributed almost 3.9 billion dollars; Aguascalientes, 2.7 billion dollars; San Luis Potosí’s share was 2.5 billion, while Queretaro’s added up to almost 2.1 billion dollars.

These investments made both an indirect and direct impact on job generation. In February, the last registered month, all four states showed an average progress of 4.45 %. The breakdown is as follows: Aguascalientes 4.9%, Guanajuato 4.7%, Querétaro 5.6%, and San Luis Potosí 2.6%. This result is well above the national growth rate—3.1%.

As a result, these Bajío states created more than 2.3 million jobs, which is equivalent to 11.5% of all jobs generated in the country (20.3 million).

WHERE ARE WE HEADED?

Four months after formalizing the regional alliance, Bajío governments are now building the bases in which a strategic direction can be set for achieving growth that matches each of the states’ performance.

The four states governments made connections with the Public Policy Laboratory of the Center for Economic Research (CIDE), run by Dr. Eduardo Sojo Garza-Aldape, who was Secretary of Federal Econo- my and President of the Governing Board of INEGI.

Three team-building workshops were held to draw up a strategic agenda for the region, helped by academy and enterprises of each state. Barriers that hinder the states’ development, as well as the strategies to overcome them and keep a steady development, were discussed during the events.

Some of the main requirements were to: standardize the states’ judicial framework—essentially to offer all companies the same investment conditions—, continue strengthening the labor ecosystem, diversify the economy, and share each state’s best practices.

Among the key sectors that will be part of the regional collaboration are: automotive, aerospace, and healthcare industries; agribusiness, information technologies, plastics, logistics, and energy. All four states are leaders in these industries both nationally and internationally.

A MILESTONE IN NATIONAL CHANGE

The Bajio Alliance’s is not restricted to pursuing sustainable and strategic development in just one region of the country. On the contrary, its mission is to become a model that can be reproduced in other parts. Governors of Aguascalientes, Guanajuato, Querétaro, and San Luis Potosí have reaffirmed their commitment to collaborating with the federal government and applying this collaboration to every region of Mexico.

Following this philosophy, Dr. Eduardo Sojo has qualified this alliance as a “long term process” rather than a “stand- alone project”. Dr. Sojo stressed the importance to go beyond one administration in order to lay the foundation for Mexico’s sustainable development for the next twenty-five years.

It is worth mentioning that this initiative includes, apart from the four state governors, the secretaries of economic development and planning, who offer their specialized viewpoints on different areas.

Aguascalientes Governor Martin Orozco affirms that this model is expected to become “an example of continuity and quality of life for the entire country”. Orozco specified that long-term responsibilities will be essential to generating an effective growth plan in our nation. In his words, “This is the type of practice we must follow in all the regions of the country; all thirty-two states must realize we are part of one universe in which competitiveness can only be achieved as long as we’re united”


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