To understand this opportunity, two of the great changes produced or accelerated by the terrible pandemic must be noted, along with the emergence of a pressing need for the planet. On the one hand, the tendency to reverse economic globalization, which had already been coming for a few years with the changes in the political leadership of various countries; it is causing several nations to change the focus of their economies to recover their production internally or close to their closest spheres of influence. On the other hand, the interruption in supply chains has generated great problems for many companies, which are rethinking whether the philosophy of minimizing costs with few suppliers in distant countries and just-in-time logistics is the best option, with several companies leaning more towards stronger supply chains.
Additionally, the need to combat climate change has become an urgent priority for humanity as a whole, and although there are still no necessary agreements in the discourse, in some countries it is becoming concrete actions that involve large amounts of resources. to migrate to clean energy at a faster pace.
These changes are seen with particular clarity in the United States, whose government is embarking on a colossal program of investment in infrastructure, whose transversal axis is the change towards clean energy. Several of the large US industrial corporations are changing their processes towards closer and more resistant supply chains, which implies large investments in additional logistics, such as warehouses, means of transport and specialized services. They are also migrating their processes to the use of clean energy, not only as a cosmetic issue, but also responding to the real demands of increasingly environmentally conscious consumers.
One of the repercussions of these changes, and of the ultra-expansive monetary policy that the central banks of the most developed economies have followed, has been the rise in inflation worldwide, which has become one of the most serious threats to the economy. recovery of global economic activity in the coming years.
Much of this inflation is likely to be due to changes in relative prices that occur over very long periods of time. Seen in a simplistic way, while the developed world was transferring to countries like China, its production processes to take advantage of the abundance of cheap labor, this allowed a downward trend in costs, and consequently a downward pressure on the inflation in those economies. The incorporation of new technologies as a result of globalization and greater economic integration in the world, also allowed having falling costs and low levels of inflation for many years. Now that production is becoming more regionalized, and with bottlenecks produced by both the pandemic and new needs, many prices have started to rise in a trend that could last for several years. This will require changes in the monetary policy of several countries, ending the era of “free money”, or risking the trigger of inflation with its dire consequences. To the extent that production is concentrated within countries, even in the most developed such as the United States, their prices will suffer from this concentration due to the loss of economies of scale and comparative advantages.
For the productive transition underway in the United States to be successful, and not to generate exaggerated inflationary pressures, it must rely heavily on the region, especially its trading partners, Mexico and Canada. This opens up great opportunities to participate in the development of this new supply chain that is more regional, resistant and, above all, cleaner in terms of energy.
For our beloved country, the opportunity is historic. Mexico has the conditions at hand to take advantage of this opportunity, since we are not only in the right geography, but we also have enormous potential to generate the clean energies that the times demand, we have one of the most open economies in the world with great export potential, a young and abundant population to educate and provide the work necessary for production processes, and as if this were not enough, there is a lot of entrepreneurial and entrepreneurial talent.
Seizing this historic opportunity requires a couple of simple but substantial changes. On the one hand, reorient the country’s energy strategy to allow the development of clean energy. On the other hand, realizing that the private sector is not the enemy of development, but the most powerful ally that any economy can count on. At the end of the day, an economy is the result of the interaction of all its people, and those that manage to generate the greatest harmonious participation of its productive forces are those that achieve the greatest development, the greatest generation of opportunities and the greatest expansion in well-being. of its population. Just changing the presidential discourse to recognize these opportunities and aim towards the generation of true legal certainty for investments would produce the great push that investment is sorely lacking.
Of course, these changes require an adjustment in the country’s development vision and a true U-turn in the national energy strategy, which would be highly desirable, but seems, unfortunately, highly unlikely. The window in which this great opportunity will remain open may last a few years, and the next administration may still be in a position to seize it. For those companies and investors that are in the right sectors and regions in our country, the time to start acting is now, although the risk is high, since if the current vision of the country’s development persists in the next government; the opportunity would pass by and the investments would be fruitless.
The cost of not acting correctly to take advantage of this opportunity is enormous, since the growing needs of our population can hardly be met without a more modern and inclusive productive apparatus. Today in the world there are again differences in the levels of development and well-being of countries like those in the 70’s, where there was a clear trichotomy between those who were capitalists, socialists and the so-called third world. Missing this great historical opportunity would lead us towards that third world classification characterized by high levels of poverty and scarcity, ignorance and misery. Instead, today we could take great steps to become a first-world economy, with great thrust and with greater well-being for millions of Mexicans, something like the dream of the great statesmen.
The opportunity is there. Hopefully the vision to take advantage of it too. We still have time to adjust our approach for the good of our beloved country.
* The author is an independent economist, vice president of the IMEF Economic Studies Committee, member of the IMEF Indicator Committee, lecturer, media commentator and youtuber, with his channel Economía en Breve, in which he comments weekly on the most relevant issues for the economy from Mexico to be well informed.
Reference-www.eleconomista.com.mx