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good morning the us-mexico Foundation and the American Enterprise Institute welcomed you to this webinar on where Mexico is today in the midst of the colvett crisis and economic recession and where important relationship is headed under president's mobile silver Gore the president Trump I was wrong when I predicted four years ago that these two men would not be shall we say natural friends it is clear from their meeting last week that they have managed each other rather well however at the risk of being wrong again I'm concerned that the meeting in Washington masked a deeper crisis happening in both of our countries and for our economic relationship Mexico's economy was slipping into a recession even before Amla took office and even before the global kovat crisis made it even worse at a time when companies and investors should be thinking about bold moves to jumpstart the North American supply chain many doubt whether Mexico is a good bet the series of arbitrary decisions by amlo have undermined investor confidence for all the triumphal rhetoric the u.s. MCA agreement is scarcely sufficient to overcome deep-seated doubts about the Mexican economy and many are concerned by the lack of strategy for responding to the ruthless narco traffickers who threaten our two countries my colleague Enrique Bennett will open our discussion Enrique is the director of the us-mexico foundation it came to that organization in 2018 from pro mexico and he has served elsewhere in the next government promoting competitiveness he has a degree from the tectum one today in international commerce as a master's degree in economics and government and his study at Harvard Wharton and SMU let's turn the floor over to him Enrique Thank You Roger and good morning to everyone I'm Enrique pirate and the secretary director for the us-mexico foundation based here in Washington and and I have the honor to present our three guest panelists and I'm I mean I'm gonna start the first round of questions for them it's gonna be very simple you will have three to four minutes to to answer the question and then we'll go to a second round our first injured our malaria malaria muy malaria welcome valaria is the director of encode instituto mexicana para la completely competitive e de the competitiveness center in Mexico that is a think-tank one of the most prestigious think-tanks in Mexico malaria also worked for Mexico cava como vamos another thing tank in Mexico she has been working in the past at the national banking and securities commission she's a professor at item she also worked as a researcher for Harvard Business School Valeria Moy is a weekly columnist of millennium regarding economic matters and frequently participate as an economic economic analyst on on TV radio and print publications I'll move to Antonio Ortiz Mena our second panelist Antonio is a senior vice president for outright Stonebridge the base here in Washington DC where he provides strategic counsel and assistance to client across America prior to operate the Stonebridge doctoral on Tony Ortiz manager for over eight years as the head of Economic Affairs at the Embassy of Mexico here in Washington DC Antonio it's also a professor at CAA in Georgetown here in Washington and back in Mexico City our our our last panelist Bernardo Gonzalez Rosa's Bernardo serves today as a president of amatory the Mexican association of pension funds since January 19 20 19 prior to AMA 4e he served as financial sector specialist at the World Bank and senior advisor for the financial integrity Network in 2018 he services chairman of the national banking and securities commission the CMDB in Mexico and throughout his career he has also been appointed chairman of the board of six Development Bank's in Mexico mr. Gonzalez was the responsible for the drafting an approval of the FinTech law in the Congress two years ago and he was the chief technical negotiator for the financial services chapter for the USMC a the agreement who was just implemented by the three countries so I'm gonna start with you oval area if and it's not a question is more a comment from your part the the most recent data on the on the economy of Mexico employment unemployment investment private investment public investment I know you you you've worked this data a lot you talked about this data a lot on the media on TV on radio and give us give us this overview of the status of the economy right now in Mexico please sure thank you thank you every day thank you all for inviting me here well the economic data in Mexico is pretty much all over in the world has been really bad for the past few months even for the first quarter were terrible numbers even though they call big crisis just started to hit in Mexico at the end of March so last year as Roger was mentioning the country was slipping into a recession and it was funny enough that we were discussing if it qualified as a recession so you saw you know bigshot economies say well it's not a recession because it's not as hard it's not so deep because the economy decrease or had a negative growth rate of minus 0.3 percent so the discussion at the end of 2019 was if it qualified as a recession or not firm it was released pricing that we were stuck in that discussion it's like it doesn't really matter we are producing less that what we were producing the previous year so we might go into the details of what a recession is but it's pointless at some point in time all the other numbers at the end of 2019 were terrible the investment decrease five point one percent so what usually what maintained the GDP is not to decrease more was actually experts expert group last year and experts group mainly because the dynamics of trade in the United States were still doing ok they weren't as fast or as dynamics us had been the previous years but actually they were pretty good actually the trade conflict between the United States and China helped Mexico in the sense that we became the primary the first trade partner of the US and we stayed there for quite a few months but then the co bid nineteen crisis hit hit Mexico it started to to keep the numbers in March in January February we had some so numbers they weren't either very important in the you know in an optimistic way and they were very low in anapest mystic way we had you know consumption increased just barely investment decreased actually but they weren't this huge decreases that we start singing in March the COBIT started to hit Mexico in March s animatron and actually it was a second part of the month so the numbers that we have that are usually related to the first quarter they don't realize they don't contain the full effect of COBIT the second quarter is going to be much more difficult for the country the last number we had of GDP is that Mexico decreased a 2.2 percent the first quarter compared to that first quarter of last year but there are some others numbers that worry me much more than GDP the first one is investment investment decreased during April around 30 percent private investment investment and public investment as a whole the crease was about 30% if we compare April 20 20 versus April 20 19 we have never seen those numbers and of course those numbers can be really attributed to COBIT 19 so we have maybe would have to separate but since we were in this decreasing trend is very difficult to separate the impact so investment is doing really bad really awful for the first time in 17 years investment during the last quarter was below 20% as a developing country what we expect or what we should have is to investment to represent around 24 25 percent of GDP those that number is what we aim to to get at some point in time and when I had at Mexico como vamos that was one of our goals that Mexico reached that 24 25 percent and we were actually around 22 23 so we weren't doing that bad in investment most of that investment was private investment around to around 19% was due to private investment and the rest was public investment public investment which is another of my main concerns has been decreasing seriously for the past 5 4 3 second I mean all those years in public investment is decreasing and decreasing and decreasing when this administration came into power they promised as everybody does that public investment would increase up to 5 points of GDP there were around 3 percent 3 points of GDP and they would increase that percentage to 5 points of GDP of course those were only words it hasn't translated into reality nowadays public investment is even below 3 percent just a little bit below 3 percent and we are seeing continuously decrease and that and that number employment moving to employment employment has been of course seriously hit with a Kovach crisis we have lost in the four months that can that we can relate to the pandemic 1 million 113 jobs formal job please remember that in Mexico the job market is completely separated we have two markets we can call the dual market we have been the formal sector there is around 44% of the total occupied population and then we have the informal sector that is not registered with the social security Institute and that occur that occurs for around 56% so when we talk about loosing more than 1 million jobs we are talking about the formal jobs there are some other numbers that are very interesting regarding the job market the last one came from the in 1880 is conducting telephone surveys because they can do person real-life interviews and the last survey regarding employment gave us very tough number 20 million people have lost their full-time jobs some of those 20 million people had to be Nabal or have been able to get some kind of job for partial or in format or they can work a couple of hours so they're managing to get a little bit of income we don't know what kind of job stir they're doing but they they have been able to deal with it in a way but 20.5 but 12.5 million people have not been able to even search for a job so what we are seeing is that the unemployment rate that you were mentioned in America hasn't increased that much because people are not even looking for a job and to be unemployed you have to be looking for a job so these people twenty twelve point five million people they're not looking for a job they just moved to the unoccupied or to the non economically active population so we have a very big problem a very big situation in the employment market in the job market and we haven't even been able to address that the public administration the government hasn't done basically anything to to try to suppress this crisis or to try to contain this employment crisis so basically if you lose your job you lose your job and you have to be able to look out for yourself so those are the big numbers I won't talk more to give the other the other participants some time and maybe we can come back to those numbers later Thank You Lydia for the overview and now and I will stay with investment but now though the the pension system that the pension funds has been a key player on the last 20 years of development of the country infrastructure energy seed and venture funds and what's the scenario for the for the pension funds right now I mean we were seeing the investment a decreasing but but capital is there savings or are there and how the pension system is seeing this this is an area where not oh thank you Enrique and thank you all for for inviting me to participate in this panel well I would say Enrique that as Valerie was saying we we see that even though Mexico's economy began to slow began the slowdown since the last quarter of 18 there is a severe deterioration of economic activity as a result of COBIT 19 some estimates are that we are going to our GDP is going to fall as much as 10 percent during this year I think that the future will largely depend on our capacity to mitigate the negative impact of the pandemic on economic activity in this scenario I think that the US Mexico Canada agreement will play a prominent but not absolute role in Mexico's economic recovery in regards to a pension system that you were that you were mentioning I would say that this was one of the most important and transforming reforms in our country in the last 20 years it was a the 97 pension reform that accomplished to fund things one it strengthened the workers property rights over its pension and as Mexico moved from pay-as-you-go system to a defined benefit I mean a pay-as-you-go system with the fine benefits to one of individual accounts with the fine contribution and the other one is to turn this gave us fiscal sustainability to the system and also it helped to develop a very profound financial system which is right now quite sound compared to what we had in 95 it has been in a lot of cases one of the solutions to economic problems in the country instead of the cause of a problem like it happened in 95 the the Forest System does has played a key role in Mexico's development right now the savings of the workers amount to almost 70 percent of GDP if you compare this number to all the credit given by the banks in Mexico the 51 banks in Mexico they have a balance of 22 percent of GDP so in these last 23 years of our system workers have accumulated almost the same amount of money that banks have lent or or the balance of the length of the banking system in Mexico this year so it is really impressive from from that point of view and it has also helped to create a middle class in Mexico and let me give you a number to to sustain this this sentence that I'm saying is that for one for three families out of ten in Mexico the pension fund therefore a fund is their first and most important asset so as you can imagine this is very relevant for a system that was created only 97 and on the other hand for another 50% of the population of the families in Mexico they are for a account represent the second acid the second most important asset these are numbers from the National Statistics Institute in Mexico and it really reflects the importance of the system however it also shows because when you see what are the balances of these accounts in time the balance on average is about seventeen thousand pesos or around I don't know three thousand dollars which it means that we are a poor country we don't have really valuable assets in our country however this is the first one for a 30% of the family sort of a second one for another 50 percent so it has also been a ador for financial inclusion that means that I would say that the most important instrument for financial inclusion because you have 767 million workers or million people in Mexico with an individual account and this is relevant because as malaria said we have for economic active population 64 almost 60% are our informal so when you when you see that 67 million people have an account it's it's relevant because it means that they some time or some point in time they used to work in the formal sector and they open this account so finally I think it has created competition among retirement fund managers and also they have been more developing expertise in managing the assets of the workers along these 23 years which is also real good presently there is a debate in Mexico about the room retirement system sure we need to make reforms more than two therefores I would say that to the laws the laws that right now require the mandatory savings to be around 6.5 percent of the workers income and this is really low compared to what other countries are mandatory saving for retirement which is around 15% so we are in the in the lowest part of of the curve with all the countries that have a system like ours and and we need to do something the other section that is not really useful because it's it's a requirement in your system to have 24 years of formal labor in the formal sector and as you can imagine this is very hard to achieve for a worker the expectation is that only 30 percent of workers will get to that number of formal weeks worked or use work in the system and we need also to change that well in regards to what we've achieved in terms of investment I would say that of every four pesos that we invest in infrastructure in Mexico one peso come from comes from the money of the workers of their forest so it's a very important insti utional investor the most important institutional investor in in Mexico and also the second most important financial institution however we need to make those changes to the retirement system in order to make sure that people can have a decent pension at the end of their of their working life and right now we have a debate we are hoping that in the middle of this economic and sanitary crisis we can have really a reform that builds upon what with along these 20 through 23 years and that will allow maksakov to continue to invest in the well in infrastructure development in creating jobs this sector can be very important to achieve those goals of investment that that the country required for the long term growth going back quickly to the u.s. MCA I would say that it also grants us the possibility of having a long term vision that protects private investment that stimulates international commerce and that keeps linking the development of Mexico to the growth in the US and Canada which have very good expectations for the for the near future so I think those that that's a definite asset but we need to also strengthen our our loss on the fulfillment of those loss thank you thank you thank you for now though and I'll move to Antonio Antonio Valeria mentioned that the government it's a it's basically doing nothing [ __ ] that's that what she said and and I'll move to small and medium businesses in Mexico there are essential in key part of the of the economy in Mexico millions of small shops and medium-sized businesses in Mexico um how's the scenario for them some of them have the the pension fund to to use as a credit line to survive but what was the status on that point and we can if I can good to begin with for Millenia Bernardo Roger and you I divide this in terms of what's happening in Mexico and what if anything the u.s. MCA can do in terms of small and medium enterprises in terms of what's happening in Mexico the situation is frankly pretty dire right not only will GDP decrease by two digits investment is low that means that their recovery we'll be slow again going back to the wave an idea opened and saying you know did we have a recession last year or not well basically we bore zero who cares about the definition something happens with debates about they recovered will it be a meet will it be the shape will be a square each a positive a sentiment you know who knows it will be probably pretty slow okay so both 2020 and 2021 will be at a minimum they're difficult years for SMEs in Mexico there was very little country cyclical fiscal support or any support in Mexico so a lot of us it means we'll die and it is very difficult for them to be reborn in such a dire situation so I am pretty concerned about the domestic situation for small and medium enterprises in Mexico not I'll try to be optimistic regarding us mga it has a chapter on small and medium enterprises that the NAFTA did not have and what does that chapter do it creates a working group word by the three governments are supposed to get together with the private sector this isn't part is not only a government-to-government discussion to see how SMEs can benefit from the new trade agreement and they are supposed to provide opportunities for minority groups for indigenous groups for women so I think it's important for all those companies that are interested to contact their own governments to see how they can work together to make the potential about ssme impacts a a reality so I would say that's a positive outlook beyond the u.s. MCA what we've seen in terms of our clients is that there is a push to real ocol eyes supply chase both because of the us-china trade clash and because of the weakness of the dough eto so companies are trying to reduce their to mitigate their risk by tree localizing production that means that there is a possibility for some s amis to be part of the supply chain of the large multinationals so I think this makes sense from an international trade perspective it's pretty rough out there right it is better to stay in the neighborhood but also and perhaps even more importantly because of environmental and social government's ESG we have seen pressure from investors for example from Blackrock that said you really have to change the way you behave in terms of environmental impact and social impact or we will no longer investing just this week I believe that they should have a sort of quota more friendly warning to 50 companies so it's not idle talk right and another company sorry if I can use this expression in the watchlist so separately from the chaos in international trade I would say pressure from investors and from social groups are compelling large multinationals to be more cognizant of their environmental or social impact emitted one way to do this would be to work much more closely with SMEs and lastly and I want to keep this short because I want to start more of a conversation than a complaint I've tried to pitch this idea so far I don't think people have bought it but I think we're in a new era of import substitution import substitution under an open economy or import substitution of America theoretically open economy but that work work but where trade barriers can be enacted the national security excuse us or non time buyers over your food health and safety or regulations you name it and I do believe we're back in an era of import substitution right you need to produce locally not only to reduce cost but to be acceptable to numbers of the political and social group and to address with criticisms about the protocol exit excesses of capitalism and excesses of globalization so I think we're seeing more long term trends to real ocol eyes production and to working with SMEs that's separate from the Cova drama and he was separate front from the weakness of the don't you I see this has more long-term trends whether this will remain or whether this is feasible to knows but I would posit the idea that we're entering a new phase of import substitution Thank You Antonio Roger your round of questions you're unmuted I'm I'm you didn't know thank you appreciate you all being with us to get today valaria let's start with you you made reference to public investment in the economy being woefully low or of concern this is a matter of it's important to us companies invest there that have supply chains deeply integrated with Mexican collaborators with partners and they're concerned whether that supply chain is going to be there to be adequate partners and these economy start to to to recover after the kovat crisis is brought under some control you see Chile Peru Brazil has spent between 6 and 12 percent in stimulus packages I'm a conservative former Republican who's always advocated fiscal restraint we're now at 14% the US and we're talking about another trillion dollars it would push it closer to 20% of GDP in terms of stimulus packages certainly in this kind of crisis this is precisely when a stimulus would be called for it would be justified to sustain the economy please give us your thoughts are you concerned that the president will pass over Laura's fiscal being a fiscal hawk or or concerned about deficits is something that may be a virtue at other times but maybe a serious problem for Mexico today well just to put some context into your interior question you were mentioning that the United States is spending around I don't know 1413 percent of GDP in fiscal stimulus and then we can see Germany that is spending around 30 percent of GDP in fiscal stimulus what Mexico is spending in fiscal stimulus is 0.4 percent of GDP and I'm being very very generous considering this because I'm considering a social program transfer that was already budgeted for the end of this year that was advanced so that shouldn't be included but since I want to be you know see the glass half full I include that otherwise it would be just 0.2% so there is one thing about being conservative and being irresponsible I think and that's the difference and that's that's a difference I'm a fiscal I love but being fiscally responsible I don't like deficits I don't like super audits as well it's just we have to be I love it balanced budget but then again you don't have to consider that evil or good just per se that has to be used when it needs to be used and what we are doing in Mexico right now is we're not apparently apparently incurring in more that that's a way pret the President sees things and the way he says fiscal balance he's very conservative in that regard he doesn't like debt but the thing that worries me is that he doesn't like that by itself he gives that this characteristic of being bad just for Benny debt which I don't agree with I think that that should be used when you need it and to foster some of the projects or some of the needs that your country have what we are doing right now is we're not apparently incurring in more that but since our GDP is going to decrease so badly the ratio that GDP is going to increase so that's going to actually play against he's sewn objectives of not increasing the ratio that GDP because our GDP is going to decrease so badly that let that GDP is going to increase so I think we are doing a poor policy there and the thing that worries me the most it's not only that we are not encouraging that because that might be debatable the thing that worries me is that we're going to spend a lot of money a lot of resources public resources that they are always scarce as we all know in several proud texts that have no public in public how do you say a fundamental public public benefit yeah so returned that was the word I was looking for sorry that they don't have any public return so we're going to spend a lot of money in a refinery that we're going to build actually in the green area a very complicated area to build a refinery we're going to crush the mango it's going to be very complicated to build it there but we are going to build it there because it's the present state where he was born and she wants the refinery there so we're going to build that we are going to build a train in the Maya area and the peninsula that Yucatan which I mean it might be nice it might be a fun train it might be a good to attract tourism but it has no public return at all not financially not economic not social returns and we're going to destroy the jungle well we build it and we're going to build a new airport and this is really funny and it's really hard to say it's we're going to build a new airport that doesn't add any single flight to the current capacity so the question is why we're gonna build it and I don't have an answer for that so we're going to separate the actual the current capacity where you go instead of having water part we're going to have two airports and that capacity is going to be split into airports the reason behind that I think it's just a whim personal whim of the of the current administration so it's not the debt issue it's not the lack of support is the thing that worries me is that we are spending a lot of money in projects that have no social return no economic return whatsoever and we are not using those resources those monies to help deal with the current situation so the crew situation is not being attended is not being supported workers are not being supported some SMEs are not being supported of course big firms aren't being supported as well but we are very stubborn on building the refinery building the airport and building that's that's the thing that is very contradictory for me it's like if we don't have money we don't have money you know if we if you if we make the decision of not supporting employment or not supporting the firm's because we have no money then it might be understandable to say we don't have any money we can't do it I mean if we want to be fiscally responsible at MA and that might be considered you know a higher objective let's stick to that so we are being fiscally responsible but we are spending in so many projects that have no social returns and that's the thing that sounds very contradictory so that's that's what worries me about the public finances it's understandable that's a very fair very fair critique I want to remind the audience that the questions will be welcomed if you want to send them by Twitter - hashtag us/mexico future and we'll field those questions but later you referred to this series of arbitrary decisions by President locust over Laura if I can use that word I'm not signing that word to you but to certainly us partners and we are very close partners and have been for decades they see these things - they see the the cancellation of at the Mexico City Airport that in favor of this other white elephant Airport they see arbitrary decisions visa vie Constellation Brands huge investment bottler the would have employed 2,000 people in Baja California they seen decisions on the in the energy sector and let's let's go to energy for Antonio so these the reforms president Pena Nieto launched and before him some other efforts made they made some halting progress I tend to be not very generous about this but made some halting progress toward opening up that sector to private and foreign investment the nationalistic statist and even worse bureaucratic practices actually the Mexican people of cheap energy and more importantly squandered source of revenue for the state what would animal I'm allowed to do differently to realize that energy sectors real potential what would he have to do differently to send a signal that that sector was really open for business and and the simple word everything differently does not work we have we need an explanation let me take one step back Roger and I think the key word here is stability stability in terms of the rules governing investment both national and foreign investment so way back when we were negotiating NAFTA the idea was to provide stable rules companies could decide whether or not they wanted to play with those rules but those were their move same thing with ushca the basic premise is that it will provide a stable environment for trade and investment okay and I think that we have a problem with that because in the case of energy the government is trying to change the rules right no regulations through legal amendments and that provides a lot of instability and the problem is that in some instances the government is doing this after the investment has already been executed that was the case with the debate with the pipeline companies Canadian US and Mexico all of NAFTA right great all three nationals are being affected after they've already built the pipeline infrastructure because the government decided that the contracts where I'm fair the the word is punished were no needles annual they did that they defined what's fair and fair what's no meanness and they force a renegotiation okay and this affects not only energy companies but all companies investing in fixed assets how am I going to invest if the government after the investment will want to change the room for me that is the biggest issue that is the biggest concern how could that be resolved by two you say US legal turn ceasing and desisting this type of behavior and by correcting the Bronx that was done and a number of areas that you mentioned okay that's for me that's the biggest that the general concern and I don't think that the u.s. MCA to do this Manti the protection for foreign investment that the US and provides especially for manufacturing is much lower than the NAFTA protection that's u7c a chapter fourteen is weaker than not to chapter 11 and this affects specifically US companies because Canadian companies can you investor protections that are provided for under the Travis if ik partnership and even European companies can use the agreements between the EU or F top well you're pretty free trade association in Mexico so the US company set up about a particular disadvantage with the US MTA and I think that the Mexican government if it wants to attract investment and reach the 25 percent needed to grow at acceptable rates to create jobs it will need to change course in general not let me turn briefly to energy I think some folks believe that the sort of market adverse decisions on both uncertainty on hydrocarbons it's not only renewable bu also renewable affects companies in the energy sector I would say this is not right again in such a troubling signal to companies across all industries and secondly it also affects companies that are consumers of energy in terms of consumers of energy right not only producers but also consumers is the problem no it's a huge problem okay it's not an energy problem what can the government do it can they can say okay maybe I did not like the rules that existed before yes for I will change the rules but I will do them respecting the independence of regulatory bodies which they had not they will avoid surprises and I will try to engage his constructive discussions with energy companies to see how they can have a positive impact on employment on wages on the environment etc so there's a possibility to do that but so far I think that this is a lose-lose situation I don't think in the end Pemex will be better up through these policies it can be a black hole to work which were channeling resources but Lydia mentioned their refinery their firings part of the black holes a lot of other funding is also going to supporting Pemex beyond their canary I don't think it will help CFE I don't think it'll help employment I wouldn't think it will help the environment or Reno's it really is a lose-lose proposition and I won't make adjustment causes you to make predictions do I think this will change I will say that sooner or later the reality will dawn and I hope it's sooner rather than later because this is really a lose-lose proposition no matter where you look at it Russia well dramatic but I think valid critique Bernardo let me ask you perhaps the toughest question of all does amel have a strategy well in all I know we've all described various concerns does he have a strategy on it on any of these things so you know we watched him for a long time a lot of people will say you we got exactly what we should have expected when he was elected but he was overwhelmingly elected what strategy is he satisfying people with the strategies people voted for him Thank You Aurora and it definitely is the toughest question thank you now I would say that la passerelle has pursued and done everything he promised before being elected he was going to do cancel the airport strengthen Pemex strengthen CFE I think we have to be very clear we have to understand that the goal of of the administration is to have strong energy companies state energy companies and of course this is a conflicting objective with with the energy reform that we have the previous administration of course there are contracts they are protected by our laws and by our judicial system which has given some good good good results to some of the legal demands that there have been requested but by these companies I think we have to understand that that this administration will last only six years that we have a chance if we don't like it to change it after six years that we have to coexist with this vision of public policies the majority of Mexico decided to go that way and I think his popularity is still high among the people that voted for him it's decreasing for attack and the other part is that we also have to understand that we have a treaty like the u.s. MCA and it's great news that this administration has really backed backed up that that treaty because it gives us as I was saying at the beginning of my intervention a framework for for the long term and a framework of free Commerce of free markets of competition and this is the view of an administration that that will change and even though another can do from the president's party win the next election it's not the same it's not the same vision it's not the same ideology so we have to learn how to coexist with this of course it scares private investment it has had very negative and profound effects in our economy I mean the uncertainty created by by some of the public policies that we were seeing in the case of our of the pension system we've seen how some legislators have presented initiatives in Congress to make use of the savings of the workers by the government and so that the government will manage all those funds all those four billion pesos were two trillion dollars for foreign investment for investing in projects like malaria described right now we have because the president has not I think so strong feelings regarding the pension system he has some ideas but he has been very open to strengthen the system that we have we've been working with the private sector the government in order to find ways to make a reform to the system and not destroy what we built during these 23 years we need to learn how to work with this new ways of thinking and try to make the best work for Mexico really I think we have a strong democracy and I really believe in those institutions and we don't like a government program we can we can always decide to change the thing is that popularity still have and and we'll see what happens next rally but at least I believe that that things like our judicial system strong commitment to us MCA and other international treaties are important to to maintain the course of our country let me just ask you Lydia Bernardo referred to democracy strong democratic institutions you know people were expecting that the mid-year congressional elections would be an opportunity for amel oh if anything to add to his to his advantages is there a possibility that the Mexican people will well that there's enough of a articulated opposition in the country among the other political parties that they will be able to push back and and sort of level the playing field a little bit in terms of congressional elections that will be coming up in a year and a half well that's it that's a very difficult question to to us can it seem more difficult to to answer it and what I'm sitting right now in terms of opposition is that the opposition is really segmented is really fragmented and maybe we have local leaders local people that might be of a lot of interest regionally not as a national level but since the midterm elections are more regional regional related might might be the strategy the strategy that works but what I'm seeing that kind of worries me because I don't agree with it but let's be very clear I'm not a political analyst turn or anything of the sort what I see is that people are trying to make a huge posting block you know to try to have all the other parties PRI PA n MC all the other big and smaller political parties to unite and to build a coalition in order to be as strong as more than is right now so maybe the idea is that we're not otherwise saying the president still has a lot of popularity so maybe what they are thinking is they're trying to create an opposing bloc that can't fight back and oppose the forces that Miranda has I don't think that's a very good idea because morena built through the years and we have to be very clear on that the current precedent were they did campaign you for almost 18 years and he were was basically knocking every door in the country for long for a long long time and trying to build a coalition out of the blue so yeah we're in a data coalition you have far left far right and it's not a political parties more it's more movements than a political party and there you have lots of mixtures but it kind of worked because the president the now president did a lot of campaigning and it was almost a personal issue if we try or if the opposition tries to make something similar I don't think it can work but maybe they think they can and that's what I'm seeing right now they're trying to move towards forming a block in order to deal with the morena strength in the next year maybe it's too soon and but that's what I'm saying they are trying to form a political bloc and I don't think look of United force I don't think that can work but maybe I'm completely drunk well you will see we will see there's a long way to that obviously and we're even a long way our election here and United States you suppose anything could happen let me just ask the other two panelists Antonio and Bernardo to weigh in on there's gonna be one saying when we talk about nearshoring decoupling from China I think it makes abundant good sense but then again I'm an American astronomer in the Caribbean and candidates makes a heck of a lot of sense but you know if there's one thing you SFC a given okay if there's one or two things that the private sector could do to advance this kind of vision I think our our national leaders political leaders are so preoccupied with the kovat crisis that's a good reason I think this is a time when private sector people should be sitting in their home offices thinking about how did they jumpstart this vision in the Western Hemisphere this economic integration or Antonio we'll start with you what are your fun Roger well just very briefly on the elections in addition to legislative elections fifteen governorships are up for election so it's not legislated but the state executives and I think that's something to look out for that's half of the country's government and maybe that won't change the cause of power shift who knows I'd just throw it out there but will happen I have no idea okay now let me turn to what can companies do my sense is that they should really take ESG seriously and make it an integral part in holistic part of their production process not some add-on like y'all know donate to school or I'll publish a book on the Mexican Caribbean with beautiful pictures on eleven being sarcastic but you know that was the way it was done before why do I say this first because there are huge political and social pressures in Mexico to do things in a different way are you a good corporate citizen are you really paying your taxes or not about your wages how about your relation with unions how about the environmental impact how about you know minorities etc so that's in terms of just domestic pressure but in terms of the u.s. MCA I would say that it really is a new type of agreement in some ways I think it backtracks by more I'm more of a liberal than that you associate more market let Free Trade Center but that aside in terms of the progressive agenda there are a lot of things in the u.s. MCA I can be used I mentioned that the SME component and the gender component that very few people see there there's a gender component in the USMC there's an indigenous groups component and then there's a North American competitor that has barely been mentioned so I think that through years G companies can really try to reduce risk and to improve things so do good and do well otherwise I think they'll be all over the place hood has to be he is G completely aligned with what they're doing not an add-on that's what I would do look great Bernard over your thoughts I think you're still muted sir I'm sorry I would say that it sells by itself I mean the economic returns of original integration for commerce instead of China it makes sense it makes sense regionally economically from a lot of point of views I would say that the private sector should focused on developing or trying to invest in sectors that are not controversial for Mexico's government I think there are a lot we've seen that they have strong feelings with the energy sector but we have many more and we could try to push and and try to attract investment through us MCA to all those other industries again and also I think the US government has had a very relevant impact on the public policies in Mexico and I think it would be great if they also the private sector both in Mexico and the US could use that relationship and that leverage in order to keep or continue to strengthen the rule of law in Mexico public safety for our citizens and of course international investors and improving working conditions in in Mexico if we really if the private sector focused I think in those issues I think we can have a successful regional integration and make the USMC a true success and and have a very prosperous region probably I'm on the positive side of how I see things of how things can be analyzed but I really see there are a lot of possibilities right right right well I think we're all we all have to remain optimist because there really don't have any other choice where it's just an important partnership and we have to make it work and great resources great people on both sides of the border I want to thank you on behalf of AEI for your participation I want to thank our audience members actually we did have a couple questions at the end that I should have identified any questions from the audience Enrique I want to thank you well so for your participation I'll toss it to you for what final word or two and also before I go on this Martinez Fernandez for your great work here at AEI and putting this together Enrique Thank You Roger I truly believe that the relationship between Mexico and the u.s. it's a it's super-important for both countries we're seeing a a region at the border with ten states working on on COBIT for for sure but working also an infrastructure working on on the industries like the aerospace the automotive industry electric electronics I mean many many industries that are thriving in Mexico thriving in in u.s. and obviously in Canada so we we need to think more as a region North America in in the u.s. obviously most of you think on Mexico as as part of Latin America and and and I think that chip wouldn't need to change as seen Mexico more as a North American region and and the possibilities are huge Thank You Roger and AI to host this event I think I mean if all the listeners follow Antonio valaria and Bernardo on social media they will learn more about Mexico and and the us-mexico foundation well it's here to stay to help the interaction between the u.s. and Mexico Thank You Roger and thank you Andres again great thank you we're adjourned appreciate it very much thank you Oh