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After
maintaining fairly high levels of investor confidence since the
late 1990s,
Mexico, for the first time ever, fell from among the top 10 most
attractive markets in the world in an annual study conducted by
A.T. Kearney.
Mexico dropped from third to 22nd most attractive destination.
Unfulfilled reforms in key areas such as telecom,
infrastructure, and energy, and the magnetic pull of China have
led global investors to rethink Mexico. Since the all time high
of $26.8 billion in 2001, Mexican FDI inflows have declined each
year falling to $10.8 billion by 2003 which is the lowest level
since 1996. Dampened enthusiasm for
Mexico
is most apparent among European and Asian investors.
From the end of 2000 to April 2004,
roughly one in four of maquila enterprises left
Mexico, cutting nearly a quarter of a million jobs. Among these
firms about one in three reportedly relocated to
China.
While Mexico led major emerging market in meeting investors’
expected profit targets in 2003, this year
China,
Brazil, India and Poland surpassed Mexico. Mexico falls dead
last when ranked against China, India, Poland and Brazil in
terms of investor short-term (one-three years) and medium-term
(10 years) FDI attractiveness.
Currently,
Mexico’s
loss of competitiveness appears to be limited to labor-intensive
industries characterized by low-cost and large-scale production.
But, Mexico must continue to move to more complex industrial
production activities and services to offset lost manufacturing
that is flowing to China and Central America.
China, India tops
China and India rival one another and are aggressively
challenging the United States as the world’s most favored
destination for foreign direct investment, according to the
latest Foreign Direct Investment Confidence Index, an annual
survey of executives from the world’s largest companies
conducted by global management consulting firm A.T. Kearney.
For the first time since 2000, a
sizable majority (69 percent) of leading executives are more
optimistic about the global economy, compared to only one in 10
expressing more pessimism. Corporate investors expressed an
increased willingness to make overseas...
...Continued
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