Ruben Lugo Delgado Mexico: Development, Institutions and Policies May 14, 2013.

Position paper proposal: Public policy directed to attract inward foreign direct investment. According to the Mexican Ministry of Economy, during 2012 Mexicos inward FDI accounted for only $12.659 billion USD, this is half of the average inward FDI received in the period between of 2000 to 2012. Furthermore, during the last quarter of 2012, inward FDI had a negative growth of almost one billion dollars, driven by an almost $2.5 billion USD setback on new investments. Inward FDI was increasing steadily since the year 2000, reaching a peak of $31.38 billion UDS in 2007, a level that it has not been reached again. This work intends to evaluate the policymaking of the Mexican Government directed to become more competitive in order to attract and retain foreign direct investment. This assessment will be based on the role Mexican institutions play in the attractiveness of the country as an investment destination, and will evaluate its performance some of the commonly used competitiveness factors, such as: rule of law, environmental policy, society health, education and participation, macroeconomic environment, political system, market access environment, leading industrial sectors, government efficiency, and sophistication and innovation in economic sectors. To some extent, where data is available, a violence perception component would be evaluated. A crucial tool for my analysis will be the work of the Mexican Institute for Competitiveness IMCO (Instituto Mexicano para la Competitividad), which compares the capacity of a country to attract and retain investment and talent with comprehensive conditions to maximize the socioeconomic condition of businesses and persons. In the 2011 International

Competitiveness Index published by IMCO, Mexico ranked 32 among 64 selected economies. The main indicators hurting Mexicos position were: objective and reliable judiciary system, stable and functional political system, and world class precursor industries. Another useful source for this paper will be The Global Competitiveness Report 2011-2012 of the World Economic Forum. This report ranks Mexico in the 58th place among 142 economies, and recognizes weak areas which are holding back Mexicos capabilities to enhance competitiveness which include: flaws in the public institutional framework, efforts to fight organized crime, security concerns from the business community, policies directed to boost domestic competition in strategic sectors. Also, this report calls for institutional reforms on the labor and education sectors directed to increase the efficiency of the Mexican economy. A tentative framework of this work includes the following sections: 1. Inward FDI in Mexico: Figure and trends. 2. Mexico and the competitiveness indexes. 3. Mexican institutional framework relative to the competitiveness indicators. 4. Analysis of public policies directed to enhance competitiveness and attract FDI. 5. Conclusion: Suggested course of action/possible policy solutions.