The entrepreneur considers that there is trust for investment in Mexico; investment can boost economic growth, ensures
After the announcement of an agreement between the federal government and the gas pipeline construction firms, businessman Carlos Slim stressed that there is confidence from the private sector for investment in Mexico, as this is “a paradise for investors.”
During the conference of President Andrés Manuel López Obrador, the engineer explained that this is possible due to the attractive interest rate offered by our country compared to other nations.
“The interest rate in Europe is negative, in the United States it is 1.5% in the long term, in Switzerland and Japan it is negative. Mexico is a paradise where they can have rates of 8% in Cetes (Treasury Certificates), ”said the president of Grupo Carso.
He explained that in order to achieve the desired economic growth for the country, there is a need for greater investment by the government and private initiative, both national and international since there is potential in the infrastructure works that the federal administration seeks to carry out.
Therefore, Slim Helú considered that once the government starts programs to encourage investment in the country, the situation can be reversed, as there are resources for development.
“We are in a situation where growth can be 0 or 2 or 0.2 or 0.8, it is not important, the important thing is that it is because there has not been that great investment that is being raised and that is in government programs and that it is imminent you can start walking even earlier even from this year, ”he said.
Mexico reaches a deal to settle pipeline contracts dispute
Hopes raised that agreement will boost business confidence in López Obrador’s administration
Mexico’s President Andrés Manuel López Obrador, flanked by the country’s richest man Carlos Slim, claimed a major victory in a dispute over pipeline contracts that he said would result in $4.5bn in savings for the state and pave the way for major private sector investment in a large-scale infrastructure plan.
The deal reached on Monday night resolves a bitter battle over pipeline contracts signed by the state electricity company, CFE, before Mr. López Obrador took office last December, which his government claimed were “exorbitant and unfair”.
The dispute had threatened fragile business confidence by raising the prospect that the government would not honor contracts with which it disagreed. While the contracts were, in the end, renegotiated, Carlos Salazar, head of Mexico’s powerful CCE business lobby, called it a “win-win” for all sides.
Mr. López Obrador told his daily news conference that the new contracts — which lower tariffs for transporting gas in a series of major pipeline projects with US, Canadian and Mexican companies — were beneficial to all sides and praised business leaders for their goodwill.
The president had spooked investors before taking office last December by scrapping a $13bn airport project in which Mr. Slim had been a leading investor. But Mr. López Obrador singled out the telecoms mogul for particular praise on Tuesday, saying he had been the first to sign on to the new pipeline terms.
That agreement by Carso Energy “set the tone” for IEnova, a unit of US company Sempra Energy, and Canada’s TC Energy to follow suit, Mr. López Obrador said. Fermaca, a Mexican company, was still in negotiations.
Full details of the deal were not immediately available, but Mr. López Obrador said the companies had agreed to a roughly 30 percent reduction in their profits.
The resolution of the dispute, which the CCE had escalated last month by initiating international legal action, paves the way for a key subsea pipeline carrying cheap US gas from southern Texas to Tuxpan, built by TC Energy and IEnova, to start operations “in a week at the most”, the president said.
“I think it’s very positive that today we are in a different place, that there’s a different tone,” said Pablo Zárate, managing director of FTI Consulting and an energy expert. “This was not the only problem for business confidence, but it had become a major one . . . Today we have a happy ending, but this is a situation the government created.”
The deal comes just days before Mr. López Obrador’s first state of the nation speech on September 1, in which he will emphasize how he has delivered on campaign promises, including social programs and higher minimum wages.
But promises of stronger growth have failed to materialize. Revised gross domestic product data published last week showed zero growth in the second quarter, after a small contraction in the first quarter, pushing Latin America’s second-biggest economy to the brink of a technical recession as investments remain on hold.
Mr. López Obrador has promised to lift Mexico’s stubbornly sluggish historical growth rates to 4 percent a year during his presidency. “Growth may be zero, that doesn’t matter. The important thing is that there hasn’t been a lot of investment and that it is now imminent, even starting this year,” Mr. Slim said, saying there were opportunities in hydrocarbons, road, water, education, health, ports and airport projects.
Mr. López Obrador said the government would soon announce a national infrastructure plan but gave no details.
Marco Oviedo at Barclays in New York said he was not convinced the resolution of the pipeline dispute would be enough to kick-start investment. “Probably doing something market-friendly on Pemex might,” he said, referring to the troubled state oil company that the president has blocked from pursuing joint-ventures with the private sector.
Mr. López Obrador said it was “very important” that Mexico had averted an international legal process “that would have taken years and generated a climate of distrust towards the Mexican government and economy at a time when we need national and international investment to achieve higher growth”.
Ultimately, he said, consumers would benefit. “This will enable us to maintain our policy of not increasing electricity prices,” he said.
Source: excelsior, financial times
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