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The Challenge of Growth During Globalization. Presentation by Stephen Haber Coparmex Annual Meeting Monterrey, NL September 9, 2004. A World Increasingly Open to Trade.
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The Challenge of Growth During Globalization Presentation by Stephen Haber Coparmex Annual Meeting Monterrey, NL September 9, 2004
FDI Finances No More than 12% of Mexico’s Total New Investment
Manufacturing Can’t Grow if Services Don’t Grow • Manufacturers consume inputs from the Service Sector—on average 25% of their inputs are non-traded services. • If the service sector does not grow, and does not become more productive, manufacturing cannot grow. • But services cannot grow if there is little domestic finance.
The Importance of Political Institutions • The political institutions that limit the discretion and authority of the government are a key to the development of the financial system—and hence a key to economic growth. • Examples: Colombia and Mexico
% of Directors of Colombia’s Banco de la República From Government
Why Mexico is Well Positioned for the Future Mexico is solving the problem of limiting government. • Party competition limits authority and discretion of government. • Growth of state governments limits the authority of central government • Changes in expectations in civil society reinforces formal laws.
Economic Changes Already Afoot • Independent Central Bank. • Sofoles. • Afores. • SHF.