Contributed by Raúl Argüelles, Deputy President, Mexican Bank for
Foreign Trade: Bancomext
the World Development Report 2001, Mexico is classified as an
upper-middle income economy.
Last year, Gross Domestic Product (GDP) reached
6.9%, population was approximately one hundred million (33% under
fifteen years old) and the fiscal deficit was 1.1% as a proportion of
The economic growth rate averaged 5.5% during the
period from 1996-2000; the inflation rate dropped to one digit (8.9%);
the unemployment rate was 2.3%; and one of the most important facts is
that exporting performance was sustained (17% yearly average growth
At the beginning of 2001, Mexico stands out as the
eighth exporter worldwide and first in Latin America. Total value of
international trade surpassed USD 340.9 billion by the end of 2000.
The World Competitiveness Scoreboard 2000 (IMD)
considers 49 economies, and places Mexico in 36th position,
below Brazil, Portugal and China, but above India, Argentina and
Exports Promotion in Mexico
circumstances during the 1980´s and 1990´s modified the
international business environment. Foreign investment flows grew
towards the emergent countries. Trade of products and services
increased as never before. Global sourcing strategies were developed
and many countries had new opportunities to access world markets.
Globalization has been a powerful engine for
worldwide economic growth. Particularly, policies that promote trade
and investment liberalization and non-discrimination have been
Clearly, a set of governmental polices from major
countries influenced the advance of globalization and the ways in
which domestic economies reacted to a more competitive international
environment. Mexico was not the exception.
During the 1980´s, Mexico began an ambitious plan
of modernization and transformation at all levels in order to
participate more fully in the global marketplace. This included
developing a commercial policy based on liberalization, deregulation,
privatization and integration, and a flexible exchange rate policy.
In response to international trade dynamics and
through government policy, the country has looked for ways to provide
the best conditions for exporters' performance and to attract more
foreign direct investment (FDI).
Mexico had to react rapidly and modify its legal
framework. At the same time, new promotion strategies were initiated
and new opportunities were available according to the country's
competitive advantages ("We had to change the direction
while going 100 mph").
Since 1986, the export promotion strategy
together with the attraction of foreign direct investment (FDI) was
entrusted to Bancomext, a bank founded in 1937 to finance Mexican
Regarding trade promotion activities, Bancomext
follows the rules established by the Economy Ministry, and carries out
the Ministry’s programs.
Both financing and exports promotion allow the Bank
to offer integral support to take advantage of economics of scale, to
improve the knowledge regarding the performance of small and
medium-sized enterprises (SME), and to facilitate the credit process.
The financing and promotion binomial contributes to
reduce risk, from banking point of view, and makes it possible to
understand the bottlenecks in production chains.
And, according to Porter’s competitive concepts,
it is possible to divide the value chain into specific productive
branches and identify areas for opportunities.
Therefore, economic and human resources can be
provided in efficiently way, and follow-up and evaluation become
Bancomext at a Glance
the Mexican government's development bank, that has been financing and
promoting Mexico's foreign trade for sixty four years (total assets in
2000 amounted to USD 9.4 billion).
Mission: Training and assisting Mexican small
and medium-sized firms by offering the highest quality of financial
and promotional services in order to turn them into worldwide
competitors and facilitate their successful access to the
international markets, as well as to promote domestic and foreign
Bancomext does not receive any transfer of fiscal resources from
the federal government. However, the Bank is perceived by the main
international financial markets as one of the most prestigious and
trustworthy entities in Latin America, whose credit standing is solid
and well accepted.
Last year, USD 4.4 billion of loans, guarantees,
and solidary obligations were disbursed to foreign trade operations
Of the total credit and guarantees portfolio, USD
3.8 billion were granted to direct exporters to cover working capital
necessities, as well as to expand and modernize their production
USD 394 million were given to support the
incorporation of suppliers into the export chain, to acquire
technology and to expand facilities.
In 2000, the number of firms that received
financing from Bancomext´s credit programs reached 1,945. All of them
were assisted on-site by branch offices throughout the country.
Financial resources given during the year 2000
encompassed a wide variety of high export potential activities, such
as: Food (fresh, processed and fishing), 18%, Textile and apparel
17.5%, Chemical and pharmaceutical 8%, Metal-mechanic industries 8%,
Tourism 6%, Furniture 4%, Household building materials 3.2%,
Automobiles and spare parts 3%, Energy 13% and others 20%.
Figure 1. Financing 1999-2000 (Million USD)
Total Loan Disbursement
Guarantees and Solidary obligations
Bancomext has 36 branches throughout the country (Bancomext
Centers) and close to the main production sites, and 43 offices
abroad (Trade Commissions), located in the most dynamic
cities for international trade, in Canada, USA, the European Union,
Latin America and Asia. In 2000, Bancomext provided the following
trade promotion services:
Figure 2. Export Promotion Services in Mexico
Export Promotion Services
Information (users served)
Publications (copies distributed)
Bancomext Website (hits)
Figure 3. Export Promotion Services Abroad
Export Promotion Services through Trade
Information on Mexican products by foreign firms
Market information by Mexican firms
International Promotion Events (firms assisted)
Good credit practices, efficient risk management,
and charging for promotional services are keys to Bancomext's
operations, in addition to the continuous improvement in the quality
of financial and promotional services in order to achieve clients'
total satisfaction. Figure 4 shows Bancomext's Promotion Assistance
Figure 4. Bancomext's Promotion Assistance Flow
Bancomext's Trade Promotion Strategy
Exporter Development Model
At present, Mexico is recognized as one of the
most open economies. Mexican products have preferential access to
almost one billion consumers as a result of free trade agreements
signed with more than 30 countries all over the world.
This unique circumstance constitutes the basis of
the Mexican Trade Promotion Model, which is managed by Bancomext under
its Exporter Development Approach.
Bancomext's Promotion Model includes a wide network
of trade services, training and information offered through
Bancomext's Portal (www.bancomext.com),
as well as by specialists located throughout the country, who give
personalized assistance to exporters.
Globalization has emphasized competition in the
business environment. The paradigm of our time is competitiveness,
and countries, companies, and people are aware of competitive
Thus, promotion programs and support schemes in
Bancomext are directed at encouraging the competitiveness of the small
and medium-sized Mexican exporters.
FIGURE 5. EXPORTER DEVELOPMENT MODEL
The problem with Mexico’s export supply is not
related to market share, but to have enough production in terms of
volume, quality, and price, in order to fulfil the consumers'
Supplier Development Model
Some forms of trade have become especially
important in the context of globalization. For instance, international
sourcing (understood as the purchase of semi-processed or intermediate
goods from foreign sources) has grown faster than domestic sourcing
and now accounts for at least one half of all imports by major
countries. As a result, intra-industry trade has risen significantly.
Imported intermediate goods are particularly
important and have grown rapidly in technology intensive assembly
industries, such as computers, electronics, aerospace, motor vehicle,
as well as textiles and clothing.
The industrial situation described above
contributed to define the second part of Bancomext's Promotion Model: Development
of Suppliers, accompanied by schemes to integrate
productive chains. Bancomext has encouraged strategic
alliances between Mexican and foreign industries. Figure 6 shows
Figure 6. Bancomext's Supplier Development Model
Foreign Investment Attraction Model
Research and intensive development (R&D), high
wage products and industries have taken an increasing share of
international trade. In these industries, import penetration and
export coverage tend to be higher and intensify the international
trade flow against low tech and low wage industries. We are referring
to knowledge economy industries.
Mexico recognizes that knowledge is critical for
development. "For countries in the vanguard of the world economy,
the balance between knowledge and resources has shifted so far toward
the former that knowledge has become perhaps the most important factor
determining the standard of living -more than land, than tools, than
labor" specifies the World Bank Knowledge for Development Report.
Mexico lacks monetary resources to support all
fields of its industries based on scientific knowledge simultaneously,
but encouraging foreign direct investment fosters technology
transfer. This is the third part of Bancomext's strategy.
Figure 7. Bancomext's Foreign Investment Attraction
Trade promotion in the new millenium
Mexico enters the XXI century with a new development
concept. World thinking about fighting poverty, raising the standard
of living, improving education and welfare, among other concerns, have
been listed in the Mexican government priorities.
Democratic participation by all members of society,
eliminating corruption and fiscal responsibility are urged in everyday
The trade development goals of Mexico are indicated
in the Mexican policy known as the National Development Plan 2000-2006
(NDP), whose main strategic objectives are:
Globalization and the new economy are changing the
perspective for the international business environment. Digital
markets, e-commerce, and m-commerce will influence how businesses
operate, as will new competitiveness schemes based on information
technology (IT) and knowledge management.
Specialized output processes focusing on market
niches and the strengthening of production chains will help Mexico
attain a balanced regional development.
In that sense, foreign trade and FDI will continue
to be the main forces of the Mexican economy, along with the growth of
the domestic market.
Under the National Development Plan statements,
Bancomext is building a platform to reach any point in the two million
square kilometers of the Mexican territory. A powerful information
network is being constructed with federal, state, and municipal aid.
SMEs are connected to local-regional information
nodes (OEP) through a standard promotion organization, and are linked
to a central nucleus (Bancomext + Federal Authorities +
Entrepreneurs). One or more nodes can operate distribution centers
overseas (CDE), joined or separate, in order to increase the
availability of Mexican products in market niches.
Bancomext supplies the necessary resources to
constitute new OEPs together with regional and city governments. In
addition, it provides the network infrastructure as well as
information and training.
The Mexican offices abroad are centrally
coordinated, as shown in the system of promotion networks diagram
(Figure 8). All of them form an international network.
Both national and international networks work
together to propitiate business contacts and enlarge market
possibilities for small and medium-sized Mexican exporters.
Figure 8. System of Promotion Networks
Bancomext's strategy regarding export promotion has
the following main principles:
And now, where are we headed?
Bancomext's model is structured in such a way that
there is a nucleus, the headquarters in Mexico City, the satellites,
the regional offices throughout the country, and the trade offices
abroad. The goal is for each of these offices to function alone,
following the established guidelines.
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