Light at the end of the tunnel • Chapter summary

The Mexican economy faces a long road ahead to recovery, with some analysts fearing that GDP could contract as much as 9% by the end of 2020, grim news for a country that was already struggling to keep its numbers afloat before the pandemic. According to official data, the country experienced a contraction of 1.2% between January and March 2019 and an overall contraction of 0.1% for the entire year. “This crisis is the perfect storm for Mexico, given that the current situation impacts the country’s most important economic sectors, starting from tourism, and also due to the country’s dependence on the US and its economy,” noted Ary Naïm, Country manager of IFC. However, Mexico is not alone in facing such tough times, as the entire world has been shaken by the severe actions adopted by governments scrambling to keep COVID-19 under control. In the face of these challenges, Mexico continues to hold cards of competitiveness under its sleeves that it can play to its advantage. “Despite the halt in economic activity, there are still things happening that we are keeping an eye on, such as the rearrangement and reorganization of supply chains in global production chains, which means there might be a shifting of some supply from Asia into Mexico,” said Roberto Martínez Yllescas, Head of the Mexico Center, OECD. The Mexican representative of the intergovernmental organization predicts the reorganization of global supply chains could be good news, as corporations in search of new sites for plants may find Mexico to be an optimal location. Along with the opportunities within the transition of modern supply chains, this chapter dives into the main advances between Mexico and Asia in terms of trade. In its 2020 publication, The Business Year is highlighting opportunities between Singapore and Mexico, considering that Mexico is the Asian nation’s second-largest trading partner in Latin America. “Notwithstanding the disruption caused by COVID-19, I see good opportunities for Singaporean and Mexican companies to continue our collaborations in infrastructure, technology and innovation, agrifood, and logistics,” said Chee Hong Tat, Singapore’s Senior Minister of State for Trade and Industry and Education. While the world struggles to maintain open ties as the UK prepares for Brexit, and tensions between China and the US worsen, Mexico’s many treaties are an upper hand that will continue to attract trade and investment in manufacturing, among other industries. “As the world’s response to COVID-19 has shown, countries that remain open are more resilient and better able to provide for their people’s needs,” Chee told The Business Year. The economic impact of a global recession, the recently implemented tax and labor reforms, opportunities in international trade, and more are discussed in this chapter that compiles the perspectives of leading experts in the country.