Introduction
Maggie Switek, Senior Research Director at the Milken Institute, a US-based think tank, has identified two key areas where Mexico needs to focus to attract domestic investment while navigating global uncertainty over tariffs.
The Current State of Investment in Mexico
If we ranked countries based on the economic opportunities they offer to investors, Mexico would occupy the 62nd position out of 100 countries. This ranking is derived from the Milken Institute’s Global Opportunity Index 2025, which evaluates countries based on five categories: perception of trade by businesses, financial services, international norms and policies, economic foundations, and the institutional framework.
Mexico’s Standing Among Its Peers
In the global metric, Mexico ranks 62nd, below Malaysia (31), China (36), and above Vietnam (73). This position has remained consistent since 2019, and the current evaluation does not account for recent changes in the judicial system or the disappearance of autonomous bodies.
Leading Economies
According to Switek, advanced economies like Sweeden, the Netherlands, and the United States lead the rankings. These countries primarily benefit from significant investments in innovation, development, and technology.
Challenges for Domestic Investment in Mexico
Switek emphasizes that Mexico should work on two main factors to encourage domestic investment:
- Promoting Innovation: Mexico should open a dialogue to boost innovation, as it is an advanced economy that doesn’t rely solely on foreign capital.
- Reducing Insecurity: Addressing physical insecurity for individuals and businesses is crucial to attract domestic investments.
Importance of Addressing Challenges
Switek explains that resolving these issues would provide “a breath of fresh air” for Mexico while global uncertainty over trade policies persists, driven by the United States.
Investment Trends in Mexico
According to data from Mexico’s National Institute of Statistics and Geography (Inegi), the gross fixed capital formation accounted for 23.4% of the GDP in 2023, while Foreign Direct Investment (FDI) was equivalent to 1.9% of the GDP. Both figures represent the lowest levels since 2006.
Mexico’s Strengths
Despite the challenges, Mexico excels in perception of trade by businesses, compliance with international policies and norms, and economic fundamentals.
Key Questions and Answers
- Q: Why is attracting domestic investment important for Mexico?
A: Attracting domestic investments allows Mexico to develop its internal capital and incentivize local investors, reducing dependence on foreign capital.
- Q: What factors can multiply domestic investment in Mexico?
A: Improvements in public governance, particularly addressing security concerns and respect for the rule of law, can encourage more domestic investments.
- Q: How does the Milken Institute’s ranking help Mexico?
A: The findings from the Global Opportunity Index 2025 can assist Mexico in enhancing its investment profile and addressing areas for improvement.
Conclusion
By focusing on innovation and reducing insecurity, Mexico can create a more conducive environment for domestic investments. The Milken Institute’s Global Opportunity Index 2025 highlights Mexico’s strengths and areas for improvement, offering valuable insights to help the country attract more investments.
