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Mexican special economic zones to be established

Mexican special economic zones to be established

Southern states will see Mexican special economic zones as a means by which to improve security and material conditions.

Earlier this month, Mexico’s president, Peña Nieto, outlined 10 points for a new reform plan aimed at cleaning up corruption, improving industry, and cutting down on organized crime in lesser developed states. Mexican special economic zones are to be implemented by 2016, and will be implemented in what have historically been the economically challenged states of Guerrero, Oaxaca and Chiapas, along Mexico’s southern border.

Background
The establishment of Mexican special economic zones in three of the most economically underdeveloped states: Guerrero, Oaxaca and Chiapas is particularly important to lift levels of material well-being in these areas to those approximating the prosperous South Central and North of the country. In Guerrero, for instances, outside of tourism areas, Acapulco, in particular, jobs of any kind are scarce. As a result, the state is a particularly fertile one in which individuals are recruited into the narcotics trade. Oaxaca is the country’s third most impoverished state. Although it accounts for a bit more than three percent of the Mexico’s population, as a whole, it contributes scarcely more than one percent to Mexican GDP. Finally, in Chiapas almost seventy-five percent of state residents live in poverty, while the poverty in which about thirty-two percent of these people live in can be considered to be “extreme.”

Policy Solutions
In response, President Nieto announced a bold, 10-point plan for transforming the economy and security situation southern region through the establishment of Mexican special economic zones. Some of the major steps proposed include:

  • A national emergency phone system like 911
  • A streamlined police force organized by state rather than by local municipalities
  • More transparency and public information on contractors working for the government
  • A constitutional amendment allowing the federal government to intervene and override local municipalities thought to be infiltrated by organized crime

Mexican Special Economic Zones
Possibly the most significant part of the plan is the establishing of three special economic zones (SEZ) to transform the socio-economic landscape of the region in hopes of warding off poverty and crime. In his blog the week before the announcement, the president called for a “large-scale integral development strategy that will involve the whole country in order to support the neediest sectors in Mexico.” These three zones will be:

1. The Inter-Oceanic Industrial Corridor in the Isthmus of Tehuantepec to link the Pacific to the Gulf of Mexico
2. The Puerto Chiapas
3. The Puerto Lázaro Cárdenas in Michoacán and Guerrero

The SEZs are to operate within a regulatory framework and include tax incentives for businesses. Two deep-water ports, one in Chiapas and the other in Lázaro Cárdenas, are to be a major highlight of the project. Additionally, a number of incentives and financial assistance will be offered, including:

  • Modern infrastructure
  • Security
  • Preferential financing
  • Foreign trade facilities
  • Lower tax rates

 

 

Image credit: http://panampost.com

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