Transcript No Slide Title

Why Mexico needs a fiscal reform?
the territorial dimension
Paris, 26 March 2007
1. Globalisation / Decentralisation
2. Growing disparities between regions
3. Ineffectiveness of conventional policies
and governance
Does this sounds like Mexico?
SWE
CZE
.034
.041
.046
.054
AUS
NOR
.057
.065
JPN
DNK
.067
FRA
.082
KOR
.070
.085
NLD
FIN
.089
.097
BEL
IRL
.101
.106
.116
POL
UKD
GRC
.124
ESP
.136
.140
.126
.000
SVK
.050
.129
.100
AUT
CAN
PRT
.153
.159
.145
.150
DEU
ITA
HUN
USA
.178
.200
.200
MEX
Territorial disparities in OECD Countries (gdp per capita 94-2000)
.250
Economic Growth and Regional Disparities
4%
Czech Rep.
3%
Hungary
2%
Australia
Regional Disparity
Finland
Denmark
Mexico
1%
Norway
Italy
Austria
0%
Spain
Portugal
Japan
Belgium
-1%
UK
Slovak Rep.
France
US
Netherlands
Canada
Greece
-2%
Germany
-3%
.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Growth
Adopting a ‘territorial approach’ ?
factors of national growth are strongly localised
promoting national growth requires improving
the use of these factors within regions
regional policies
an example of what NOT to do…
When spending forgets the ‘regional dimension’: the case of Italy
1971
1996
MEXICO: fiscal reform can’t ignore the regional dimension
Individual and territorial disparities + unused potential
> Threats to Mexico’s competitiveness and cohesion
Northwest
32 %
Northeast
South-Southeast
Centre-West
Centre
70 %
3 key territorial challenges …and potential resources
Concentration
Urban development
challenges
Dispersion
Rural
development
challenges
+ cross-border dimension
Metro-urban dimension: the case of the ZMVM
Federal Government
Federal District
State of Mexico
Delegaciones
Municipalities
State of Hidalgo
Municipalities
Non-Governmental actors
metropolitan commissions…
do / can actors co-operate?
cost…63/66
Rural dimension
1. Rural Mexico not synonymous with decline
2. …nor is synonymous with agriculture
What is the spending strategy?
Cross-border dimension: Mesoamerica
1. Strategic geo-political location
Central and
Northern Mexico
North America
Tampico
North America
Tuxpan
Europe
PUEBLA
Coataacoalcos
Villahermosa
XPUJIL
Chetumal
Flores
BELMOPAN
Sto. Tomas
San Pedro Sula
La Ceiba
GUATEMALA
North
America
Key
TEGUCIGALPA
Quetzal
SAN SALVADOR
Cutuco
Pacific Corridor
Asia
MANAGUA
Inter-oceanic corridors
Caribbean tourism corridor
Europe and South America
SAN JOSÉ
Limón
SE Mexico highway expansion
South
America
PANAMÁ
South America
Territorial approach: rethinking multi-level governance
Federal
Regional
Local
Upper Horizontal co-ordination
Mechanisms
Vertical co-ordination
Local horizontal co-ordination
Objetcive:
•
Finding the right mix of knowledge/responsibilities/resources
Key issues
1) need to tackle the disparities issue
2) fiscal reform crucial for regional policy
3) regional policy can support fiscal reform
long-term vision, political commitment are key