Former President (Centro Fox)

- Hace poco más de año y medio, cuando el presidente Peña Nieto comenzó su administración, tanto la prensa nacional como la internacional empezaron a hablar del “Mexican Moment” y del auge del “Aztec tiger”. Sin embargo, y a pesar de que México tiene números macroeconómicos como pocas economías en el mundo, parece que el Mexican Moment no termina de llegar. ¿Considera que la Reforma Energética puede ser el eslabón perdido del país y el detonante de su potencial de crecimiento tan esperado?

Si. Quería añadir un comentario antes. En este encuadre, me gustaría caminar por la vía de energía pero también caminar por la vía de la tecnología. Me parecen que son dos cosas importantes para el país.

El Mexican Moment o el Brazilian Moment o el momento de cualquiera siempre es una gran ilusión de todo político, de todo presidente, es una gran ilusión de todo país tratar de ponerse en ese momento que permita acelerar todos los temas de desarrollo. Para que este momento se de, tiene que conseguir muchas cosas y tienen que remover algunos obstáculos. Yo creo que la reforma de energía junto con la reforma de telecom y la reforma de educación es un paquete que efectivamente en el papel o en la opinión  pública o en los medios de comunicación genera este momento. Pero los momentos no aterrizan si no hay nadie que haga que ocurran. Así que México está nuevamente por tercero ocasión ante la posibilidad de hacer real su momento. No lo hizo en los dos anteriores. Se creó entusiasmo y al final no pasó nada. Así que en esta ocasión hay la nueva oportunidad de que este momento sí se traduzca en realidades importantes.

Para que esta suceda hay que tener dos cosas: una aterrizaje y management del tema totalmente adecuado. Y me refiero a que tienen que estar los secretarios del gobierno y del estado, tienen que estar los directores de PEMEX, las petroleras, y la de electricidad muy pero muy conjugados de excelencia con la aterrizaje de estas reformas. Si no, va a ver una gran frustración. En sí misma la reforma sí da para encontrar el eslabón perdido que en este país no hemos encontrado en 30 años. Que hemos podido pasar de pro medio a mediano plazo de dos por ciento de crecimiento.

Yo creo que este es el eslabón perdido que nos debe de dar el crecimiento de 5% y por primera vez ponernos en ruta a un crecimiento sostenido y sustentable.

¿Es usted optimista a que la tercera valla le ha vencida?

Sí, pero hay que evitar dos obstáculos. Hay que darle vuelta a dos obstáculos. Una, la violencia. Si no logramos pasar de la violencia a la paz y en un plazo corto, no hay modo en que haya ninguna reforma y no hay modo de que ningún ciudadano funcione. Solo en escenarios de paz y de tranquilidad, las personas y las economías dan mejor rentabilidad. Y el obstáculo numero dos es management. Por eso la reforma, sus puntos principales para mi es haber quitado a PEMEX, la empresa del estado, y a la CFE, la capacidad de decidir por sí mismos y la capacidad de ser monopolio. Ahora estas decisiones están depositadas en las comisiones que se crearon la de hidrocarburos, la de energía, la propia secretaria de energía que ahora recuperan mucha capacidad de decidir. Otro punto crucial estratégica es los cinco nuevos miembros del consejo de administración de PEMEX y CFE, que son miembros que vienen del sector privado, el sector empresarial y/o del sector académico. Entonces, ellos van a jugar un papel absolutamente definitorio.

Mexican Energy Reform coincides nicely with the current US energy revolution, which, in the medium term, should allow for the US to become completely independent in terms of its energy production. Is it realistic to consider the region encompassing the US and Mexico to be the next great potential energy hub in the coming decades?

That will come. First there must be an adjustment and a paradigmatic change. We are moving from an absolute monopoly, controlled by the state, into a market economy with open doors for private investment. The monopoly lasted for 70 years. And we all know that monopolies don’t work. They cannot be efficient, and they usually lead to 100% corruption. The big titanic, PEMEX, was sinking and it was below the water about to disappear, so it was a very timely reform. At the same time, there was no choice. It was either this reform comes or there was no future for energy in Mexico. First, we have to make things happen. We have to make all these changes part of our daily business practices. That will take about 5 years to adjust. Those coming as new investors will bring management capacities that the state doesn´t have. They will also bring in technology that PEMEX and CFE don’t have. That is what is going to happen, and many adjustments still need to take place.

I would say that we should not expect great results in the output of oil or energy in Mexico in the first phase of this reform. After this phase, I would expect huge results and changes because of the necessary construction of the infrastructure, gas pipelines, roads, ports, and airports. Building all the infrastructure needed will promote economic growth. So, that’s the first phase—5 years. From then on, Mexico should be in the position to be extremely competitive with its energy derived products. We should be as successful as Texas, and the miracle will surely replicate in Northern Mexico. It will happen there because we have the same resources. The experience and technology from Texas will come to Mexico, as the Texans are already the first people interested in coming to Mexico.

So you believe that, by the second-phase, Mexico will truly start seeing its results?

We have to return to the levels of barrels of oils that we had. When my presidency ended in 2006, the level of production reached 3.2 million barrels a day, and today we are at 2.4. So we have to get back to where we were. We are importing 50% of the gas we are consuming in Mexico. We need to be self-sufficient.

During the CITEK Forum 2014, you announced the creation of a fund with a total of 500 million dollars to invest in energy oriented projects. Can you tell me more about this activity?

That’s part of what I do now. I am participating, helping and supporting an equity fund that is working exclusively on bringing investment to the energy sector. The idea is to raise 500 million dollars, which is already in the process, and to invest and associate with those who are going to be operating together with PEMEX on the reform. I want to make sure, personally, that the launch of the reform is efficient, without corruption, and is being run the right way. That is why I am participating in this form.

When you talk with investors-both national and foreign-What stands out the most or attracts them most to Mexican Energy Reform?

Everybody knows about Mexico’s energy capacity, not only with oil and gas, but renewable and alternative energy. Mexico has plenty of capacity for growth. That is our number one attraction. Number two: every investor looking to participate in this investment opportunity is participating because they know that Mexico has had stability and a strong economy for the last 18 years. Eighteen years have passed since Mexico has experienced any shakeups, high inflation rates, or economic crises. It has been extremely stable, so investing in Mexico right now is absolutely secure and with a high return. Number three is that everybody knows about energy potential in Mexico, so everybody wants to come and participate in the great amount of opportunities available in the country. The rates on return are around 20%, and the Mexican currency is very strong. There are no devaluations expected in the medium and long term, so there is a pretty good return.

Has a deadline been set for investors to put down the money? Is there a deadline for it to liquify?

I think the glass is so empty that it will take quite a lot of time for the investment to come and meet all the projects that the nation has. We are at 0 in terms of shale for instance. Mexico has not exploited shale oil at all. We are at 0 in deep waters in the Gulf of Mexico. Mexico has not exploited the Gulf at all. Deep waters are quite prepared for investment. Also, we have two or three gas pipelines to import the gas that we need, but we cannot distribute it to the consumers of this natural gas.

Everywhere you look there is opportunity. We don’t have the roads in the three or four states that deal with shale; the roads still have to be built. We don’t have hotels and motels, they have to be built. We don’t have the electricity grid and power lines to meet the needs. Therefore, infrastructure is extremely attractive investment opportunity.

So every sector has a part to play in making this happen?

If you want to see and try to envision what is going to happen. I would say, take a look at Colombia. This country has gone from 3% growth to 6% just because of the oil. Peru, same thing, they moved from levels of 4% to 7%. Brazil has had a magnificent percentage of growth, from 5% or more. If you look at these examples, this is what we can expect to happen in Mexico in the next five to ten years.

Corruption and the theft of fuel in Mexico has been a significant problem in the country over the years. The laws have now changed, and the punishment for such crimes have become more severe. Now that more foreign companies are going to be involved in the sector, is it realistic realistic to believe that such crime and corruption can truly decrease with even more actors in play?

Two comments here. One is that it is natural that many people and investors still look at the dark side of Mexico. There are two obstacles that need to be removed: violence and corruption. We must also have good managing practices. This must be improved or it will not be a successful moment. On the other hand, not everything is oil in Mexico. Oil is only 8% of the GDP and 4% of our exports. Just take a look at the automobile industry. 47 billion USD is being exported in automobiles from Mexico. That’s 3 times, almost 4 times what we are exporting from oil. So that’s 400% more automobile exports. So you must realize that Mexico has the strongest manufacturing cluster in all of Latin America—much larger than that of Brazil. Mexico’s manufacturing cluster is the most competitive today compared to anywhere else in the world. Today, Mexico produces at a better cost, with better efficiency, and better quality than you do in China. Companies and corporations that have moved from Mexico to China under the gold rush idea that many said was going to happen in China, today, are coming back to Mexico. Let me give you another example. This community here, Centro Fox, we are currently hosting an IT corporation that is about to build their headquarters for Latin America to hire 10000 engineers. They already hired 900 that are working here in Centro Fox while they are building their facilities. Mexico is moving from a manufacturing economy to a knowledge economy: high-tech and information technologies. In the end, India is the master, it is the big guy in information technologies. This place is going to be taken by Mexico, because of one single competitive advantage, which is the time zone. This change is already happening here in this community, in San Cristobal. Jobs from India are being transferred here to work for the large US fortune 500 corporations. Here you can walk throughout the Centro Fox and you will see these young engineers working for Walmart, GM, GE, Citi Bank, and  Bank of America. This is only growing and growing.

In terms of exports, 168 billion USD of talent and services come from IT. That is 15 times what we are exporting from oil right now. Mexico has to handle this energy moment, but it is actually much more than that. Through energy, Mexico can mobilize our economy enough to move further in manufacturing and knowledge economy.

The Centro Fox was formed with the ambitious goal of developing the training of quality leaders dedicated to serving their respective communities in Mexico and Latin America. How do you see the growth of the Centro Fox in the medium term?

First it’s about leadership. We are in the genesis of leadership. What do I mean by that? It’s not that you promote or train leaders. It’s that we are all leaders. We are born leaders. Why don’t we see that many leaders then? We don’t see them, because we don’t discover our own leadership. We don’t learn about the resources that we have. When you discover your own leadership, that power within, that capacity to lead and change things, and innovate, that’s when you produce. When you can give something back to your community or society.

So, what we are doing here, you can see with the kids that come here. We bring in poor kids, kids that come from indigenous communities, kids that are from rural areas. We bring 75000 of them. Through an exercise of six hours of leadership, we teach them to find leadership within themselves, and we give them all the techniques, all the know-how on how to develop their leadership. That’s what we are doing here. Once you discover that, there are no limits. You can go as high as you want, you can go as far as you need. That’s the charm, that’s what we do here with leadership.

It’s not true that leaders lead and followers follow. That’s something that is being taught, and it is erroneous. We are all leaders and we are all followers. We can join someone else’s project, and then we are followers of that leader. Or we can develop our own project, and we are leaders of our own project, and we can invite others to join it to form a team. So, that’s exactly what we are doing here. What is the point? That is what Latin America needs. The only leaders we’ve had in the 20th century have been dictators, guerrillas, and authoritarian governments, and they destroyed the dreams and the possibilities of Latin America. That’s why we are one of the lost regions of the world. Finally, we learned, and we decided to fight for democracy. This was in the last two decades of the century. We got rid of all the dictators. It’s a miracle because it happened simultaneously. There was a lack of citizenship during this time. We believed that the leaders would give solutions to our problems, but now we know the truth, and this is why we have finally found high rates of growth, we are reducing poverty, and education averages have increased.

For the kids that pass through here, say they are at the end of their six hour tour and training, and they say to themselves, I want to be like Vicente Fox, I want to be President. Coming from these poor communities, do you offer any resources or follow-up training?

That’s a challenge and a task. When they go back to their communities, it’s like going back to reality. They say to themselves, Centro Fox was a dream. What they told me was not true. We tell them, when you go back, you are going to face your reality, but that’s when leaders can act. If that window is broken, they should tell their school teacher or parents and say, this is not acceptable. They can do great things. We prevent them from the shock of this reality in a way that they can use it to do positive actions. It is still not enough. We would love to create something like Disneyland, where you remember Mickey Mouse and the sort, but we need more visual impact in the program to create a longer lasting impact. We also would need to have follow-up sessions with the kids, but we need support.

Centro Fox aims to be a prestigious analytical center with the ability to create ideas and influence in Latin American politics. Are you satisfied with the influence Centro Fox currently holds over the Mexican economy and political spheres?

We act like a think tank in Mexico. We do academic activities to develop high-performance individuals in either politics or business. We welcome diplomats as well. We are also associated with Universities and we have a master’s program. All of this is associated with universities. We are committed to education. We don’t have enough money to be a full encompassing think tank, but we do work on oil. I work on attracting investment to Mexico. Here, we research on how best to attract investment. We are working on a project to support the elderly in Latin America. Many of the elderly don’t have retirement or pension plans when they retire, so we have developed a project to bring this problem to the attention of governments around the world. We have developed plans to bring aide to the elderly across Latin America.

As of late, the United States, has decided to tackle three basic reforms: healthcare, immigration reform, and financial reform. The way in which the US has dealt with such reforms has been nothing short of extreme to say the least. What could or should Mexico learn from their actions or viceversa?

The relationship is absolutely incongruent. The US builds a giant wall separating us, and at the same time, they promote such things as the NAFTA agreement. The immigration package has been in Congress for years, and no one is willing to take the bull by the horns. When you don’t act upon things, that is when things tend to go wrong. I think the position of the United States in respect to immigration is absolutely misguided. After something like September 11, they are acting more out of fear, and they are not acting making decisions based on wisdom. I think immigration is the greatest asset that a nation can have. The United States is a nation of immigrants. No one can claim to be truly American except the original indigenous people of North America. This immigrant nature of the US is what makes the nation so powerful. The US needs immigrants. Without immigrants, who is going to care for the elderly or work in the fields? These workers sustain the growth of their economy, otherwise they are not going to be able to do it.

You have come out in the media in favor of President Pena Nieto’s reforms, many of which you had tried, and failed to implement during your presidency. Is there anything that has yet to be addressed that you would like to be addressed.

I have been called a traitor for supporting President Peña Nieto in the last election. Maybe when you are 72, you see things differently. I think political parties are suffocating, and they take away our freedom. Governments need to be focused on what is really important, policies and providing the best for their country. This game of Republicans and Democrats and who is right and who is wrong is not what is best for countries. I supported Peña because I sat down and talked with him, and we discussed the reforms. He committed to implementing the reforms, and I committed to giving him my support. I’m glad he complied, but we cannot yet celebrate. The reforms still have to make it to the playing field.

To conclude the interview and to recap a little, How do you envision the future of Mexico in the short and medium term?

I see Mexico as becoming a very developed nation, with around 20-30,000 dollars per capita—right now we are around 10. This income disparity along the Mexican and US side of the border has decreased greatly since the creation of NAFTA. I see the border as a border of happiness and efficiency. I believe that in 10 years, Mexico will be equal to the US in terms of income per capita.