After a period of economic crisis caused by the COVID-19 pandemic, Mexico City seeks to attract more investment from the hand of a tourism sector that, despite having particular challenges in the urban segment, continues to grow, coupled with industries that , in an incipient way, are beginning to make their way as magnets of fresh capital in the capital, such as the audiovisual industry.
The arduous economic panorama of the crisis begins to be left behind in the capital. Luz Elena González Escobar, Secretary of Administration and Finance of Mexico City, explains that, after a 9% drop in the country’s economy – the largest nationwide – informality rates have begun to park at a threshold of 5.2% in the second quarter of the year, after an index of 7.3% in the first quarter of 2021.
This has gone hand in hand with investments, which on the foreign direct investment side, represented 9,356.2 million dollars for Mexico City, which concentrated 34% of the total captured during the second quarter of the year, and which had an increase of 127.76% compared to the same period last year.
“At the end of 2022, public investment will amount to 90,782.5 million pesos; added to the long-term investment for the modernization of Line 1 of the Metro, it will reach 129,000 million pesos,” said the official during the Mexico City Investment Fair.
Being an entity with an economic activity predominantly in services –with 91% based in the tertiary sector–, several sectors see digitization as the way to continue promoting consumption in the city.
One of them is tourism. Eduardo Rogelio Roldán, general director of tourism investment of the Ministry of Tourism (Sectur) assures that work is being done to digitize migratory processes to make the entry of national and foreign travelers to the country more fluid.
“Mexico City is particular; after Cancun, it is the most important tourist center for international tourists (…) The Federal Sectur with the Ministry of Tourism of Mexico City renewed laws to make tourist registration more dynamic, friendly, and for biometrics to be the first step for an easier income”, said Roldán.
For Rodrigo Brand de Lara, executive president of the Association of Banks of Mexico (ABM), digitization is a trend that is increasingly present in the city, and which also represents a way to further formalize economic activity.
“Growing up in formality is very important. To the extent that you are digitizing the services, the mobility that is done through smart cards, for example, you have digital users, and you are trying to formalize them”, he explained.
For other industries, the sights on Mexico City are set because of the availability of talent. This is the case of the audiovisual sector, where production companies like Amazon Studios see not only the largest production market in the Latin American region, but also a candidate to enter the first five global places in the field.
“Between 2020 and 2021 there was a 49% growth in audiovisual investment, a foreign direct investment of 11,000 million pesos. In Sao Paulo there are 954 production companies, but in Mexico City there are 2,554 (…) The city needs to solidify itself as an audiovisual industry to grow even more,” said Joana Almeida, senior manager of economic development for Latin America at Amazon Studios.
However, the private sector still sees areas of opportunity to promote an even more competitive environment for the injection of capital.
Antonio del Valle Perochena, chairman of the board of directors of Grupo Kaluz and president of the Mexican Business Council, pointed out that, despite the relevance of foreign direct investment –which represents between 15% and 17% of the total–, more than 80% of the capital injected into the economy comes from national and local companies, so an environment must be sought to continue encouraging them to invest.
“General conditions are important. The secretary [of administration and finance of Mexico City] spoke of responsibility in public finances, which is fundamental in macroeconomics. The first thing we businesswomen want is certainty, and the first thing that will give you certainty is economic stability so that you can plan not only in the short term, but also in the medium and long term (…) We need to simplify the paperwork, to facilitate establishing businesses and carrying out investments, as well as the rule of law, compliance with regulations and enforcing the law,” he concluded.
