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Dubai Chamber Highlights Vast Investment Potential of Mexico

29 April, 2014

A study released this week by the Dubai Chamber of Commerce and Industry and compiled by the Economist Intelligence Unit (EIU) shows that Mexico is now one of the world’s most important areas of investment potential. In addition, the study outlines clear guidelines for businesses in the United Arab Emirates (U.A.E.) and the nation’s investors to capitalize on these new opportunities. 

“According to the report, U.A.E. imports from Mexico were over three times bigger than exports in 2013 as the planned reforms increase competition in major sectors, improve infrastructure and education,” writes Emirates24|7.com. “A result of which could increase Mexico’s structural growth rate from under 3.5 to as much as 4.5 percent per annum.”

The study also demonstrates that more than 60 percent of Mexico’s GDP in 2013 came from its tourism and services sector, followed by manufacturing at 18 percent, oil and gas at 8 percent, construction at 8 percent, and agriculture and fishing at 3 percent. In addition, it found that Mexico’s extensive network of free trade agreements, established with more than 50 nations worldwide, have given Mexico access to more than 70 percent of the total global GDP, making it easier for corporations doing business in Mexico to trade with most parts of the world.

“The expected growth of the Mexican economy in 2014 comes from its developing consumer market, the diversity of its economy, optimistic outlook for foreign direct investment (FDI), and an improving business environment ensured by the commitment of the Mexican government to increase investments,” writes Emirates24|7.com. “These factors are enhancing the strength of the Mexican economy and luring investments into the country.”

In 2013,U.A.E. imports from Mexico vastly outpaced exports, totaling more than $479 million, including $230 million in transport trucks, $52 million in machinery,$50 million in organic chemicals and $49 million in electrical equipment. By comparison, U.A.E. exports to Mexico totaled only $143 million, including $94 million in aluminum, followed by a variety of much smaller categories, the largest of which are machinery at $12 million, iron and steel at $8 million and plastics at $6 million.

In addition, the study shows that, in the ten-year period spanning 2003 to 2013, Mexico attracted two-thirds of the available FDI in the manufacturing sector, which hit $35.2 billion in 2013. Furthermore, the report ranks Mexico number 32 out of 85 countries for its “attractiveness of doing business,” specifically naming its good macroeconomic environment, foreign trade and exchange control, FDI policies, financing, labor market, infrastructure, tax regime, private-enterprise policies and other market opportunities as the reason for this high ranking. 

“In its outlook for 2014-18, the report states that key sectors like retail will witness a volume growth of 4 percent per annum,” writes Emirates24|7.com. “It also states that private sector investment in the energy sector is expected to increase by $40 billion to $50 billion annually, while a $300 billion infrastructure plan that will be completed by 2018 encompasses highways, railways, telecoms infrastructure and port upgrades.”

Finally, telecom reforms are expected to bring an additional $20 billion to the industry by 2018, while Mexico’s stable regulatory system has also prompted analysts to forecast substantial credit and other growth potential for both the financial services and automotive manufacturing sectors.

Topics: Investment