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Mexico Declines on FDI Ranking
New Mexico airport worse, Panama says farewell to unpopular laggard.
BY LATINVEX STAFF
Mexico declined eight spots on the latest A.T. Kearney FDI Confidence Index.
The Index is constructed using primary data from a proprietary survey of 500 senior executives of the world’s leading corporations. The rankings are calculated based on questions about the respondents’ companies’ likelihood of making a direct investment in a market over the next three years.
Mexico now ranks in 25th – or last – place, compared with 17th place last year.
“Despite a significant fall in rank, Mexico’s score increase indicates it remains attractive to investors,” A.T. Kearney says. “These mixed results may be due to the expectation that the government will roll back privatization measures while opening the economy through new trade deals.
AMLO AIRPORT MORE EXPENSIVE, LESS USEFUL
Mexican President Andres Manuel Lopez Obrador cancelled a $13 billion international airport that was a third finished in order to build a new one that will be more expensive and less useful, according to experts.
The Santa Lucia airport planned by Lopez Obrador (popularly known as AMLO) will be insufficient within a decade, according to an analysis by the Latin American Air Transport Association (ALTA), El Financiero reports.
Meanwhile, a committee of the College of Civil Engineers of Mexico had earlier estimated that the Santa Lucia airport planned by will cost 315 billion pesos (US$16.5 billion), much higher than the government's own estimates of 70.3 billion pesos.
“The worst enemy of @lopezobrador_ is arithmetic,” Jorge Suarez-Velez, a New York-based businessman and columnist in Mexican newspaper Reforma, wrote on Twitter.
On April 26, AMLO announced the construction start of Santa Lucia in June, the second delay after it was supposed to start in January and then April, Reuters reports.
Brigadier General Ricardo Vallejo, head of the military college of engineers, told a news conference the first phase of the airport should be completed by June 2021.
AMLO’s decision to cancel the international airport being built sparked widespread criticism and alarm among local and foreign investors. (See Mexico Airport: Default, Investor Confidence Loss).
PANAMA ELECTS NEW PRESIDENT
Goodbye, Tortugon. Juan Carlos Varela, Panama’s president since 2014, is set to leave office in July and hand over power to Laurentino “Nito” Cortizo, who won Sunday’s presidential elections in a narrow vote.
Varela had inherited a booming economy from his predecessor, Ricardo Martinelli, but then managed to slow down or paralyze nearly everything, including the second line of the Panama City metro. Earning him the nickname Tortugon (a slang version of turtle in Spanish).
On average the Panamanian economy has grown 5.2 percent the past five years under Varela, compared with 7.8 percent under Martinelli, according to Latinvex data. That includes the banner years 2011 and 2012, when the economy expanded by 11.3 percent and 9.8 percent, respectively.
Meanwhile, Panamanians shook their heads in disbelief when Varela provoked the United States – its long-time ally – by offering to locate China’s new embassy in a key area near the Panama Canal.
Varela has also been harshly criticized for what appears to be serious abuses of the judiciary system to persecute Martinelli and many of his key people, including former finance minister Frank de Lima.
Cortizo, a former agriculture minister, is expected to follow relatively business friendly policies, but has signaled he plans to try to change parts of the Panamanian free trade agreement with the United States and Central America, according to AFP.
“The election results are unlikely to lead to a meaningful shift in the country’s business-friendly macroeconomic policy model,” Eurasia Group, a consultancy, said in a pre-poll note to clients quoted by the Financial Times.
STATON, POMA HONORED BY WILSON CENTER
Woods Staton, executive chairman of Arcos Dorados (the world’s largest McDonald’s franchisee) and Ricardo Poma, CEO of Salvadoran conglomerate Grupo Poma, have been honored for corporate citizenship by the Latin American Program at the Woodrow Wilson International Center for Scholars.
They were honored during an awards ceremony in Miami on April 30.
Staton has been a leading figure in the McDonald’s franchise, opening the first restaurant in Argentina in the mid-1980s. Since that time, he has been successful in identifying where philanthropic efforts can best address the challenges facing the region, such as enhancing entrepreneurship and formalizing entry into the labor market for thousands of young people.
According to the World Economic Forum, six out of 10 young people in Latin America work in the informal labor market. For Staton, “a business model focused on youth participation and inclusion, where economic opportunities can lead to a career and newly acquired skillsets, is critical in tackling the difficulties young people face every day in Latin America,” he stated.
Since 2007, Arcos Dorados has provided opportunities to more than 600,000 young people aged 16 to 24 years old, which for more than 80 percent represented their first formal job. Beyond his business, Staton’s native Colombia and current home in Argentina have been the epicenter of his philanthropic work. He has helped found Endeavor and Ashoka in Argentina, platforms that promote entrepreneurship to address pressing social issues.
Staton also currently serves as the chair of the Advisory Board for the Wilson Center’s Latin American Program.
“Woods understands the complexities of politics and policies throughout the region,” stated former U.S. ambassador to Argentina, Noah Mamet. “He has a passion for ideas and is always looking for new and better ways to create opportunities, not just for entrepreneurs, but also for people that have been marginalized and underserved historically.”
Poma’s expansive career has grown, from the early days of his father’s automotive business to a diverse portfolio managed by Grupo Poma, which now also owns and operates InterContinental, Marriott International and Choice Hotels in Central America, Colombia, the Dominican Republic and Miami.
One of the initial investors in Bain Capital, Poma has helped shaped major industries in his native El Salvador after its twelve-year civil war. According to former Salvadoran foreign minister, Marisol Argueta, “Ricardo has not only been an outstanding business leader who has excelled in his corporate endeavors; his vision and social commitment have also been truly inspiring.”
Argueta added that Ricardo Poma “has led multiple initiatives that have transformed the lives of many.”
For more than 30 years, the Poma Foundation has been dedicated to developing projects that promote social progress, focusing on health, education, culture, and environmental issues. In addition to his foundation work among other philanthropic activities, Poma serves on the board of the Salvadoran Foundation for Health and Human Development, founded by his late father, Luis Poma.
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