Program Introduction and Incentives
On May 22, 2025, the Federal Government announced the start of operations for the Economic Development Poles for Well-being program. This initiative offers various incentives to investors within these Poles, including immediate deduction of up to 100% for fixed asset investments and an additional 25% deduction for training and innovation investments. Furthermore, land concessions from federal, state, and municipal governments are planned to support these investments.
Historical Context and Success Stories
This program launch is a positive development for Mexico’s economy and job creation, which are currently facing negative trends. Countries like the Asian Tigers (South Korea, Singapore, Malaysia, Indonesia, and Thailand) successfully implemented industrial policies, fostering complete productive sectors and achieving global market leadership with annual economic growth rates exceeding 7% between 1960 and 1990.
Mexico also has a history of successful industrial policies. For instance, the Bank of Advancement, one of the world’s earliest development banks founded around 1830, primarily supported the textile sector and industries related to cotton, wool, paper production, silk, and iron foundry. During the Stabilization Development period, Nafinsa backed strategic industries such as steel, cement, electricity, fertilizers, and metalworking, driving industrialization and strengthening crucial sectors for national economic growth.
Current Challenges and the Need for Comprehensive Strategies
However, the industrial landscape has drastically changed since then. Today’s industries incorporate artificial intelligence, navigate tariff wars, and enjoy advanced logistics, yet markets are increasingly distant due to protectionism and mercantilist policies. Production methods are more dynamic, and scenarios are more uncertain, demanding innovative and deep strategies for successful global insertion.
Thus, the resurgence of industrial policy, after seven years of ineffectiveness and absence, is welcomed. However, merely creating Development Poles on paper won’t be enough for genuine success. Robust and intelligent public policies are essential in other key areas, such as the energy sector, market regulation, and public security.
Key Policy Areas for Success
- Energy Sector: Develop a comprehensive strategy to encourage investment in the electricity sector, focusing on generation and transmission deficiencies. Insufficient capital has limited new power plant construction and grid modernization, resulting in unstable and expensive energy supply.
- Market Regulation: Implement stable, coherent, and timely market regulations to ensure legal security and promote competition. Fragmented and overly politicized norms create uncertainty for investors and economic agents, favoring certain actors over a genuinely competitive market.
- Public Security: Address the significant presence of criminal organizations operating with near-total autonomy. Ineffective security strategies, combined with corruption and impunity, hinder a coordinated and effective state response. This insecurity discourages investment and obstructs economic development, pushing away both local and foreign investors.
Conclusion
The creation of Economic Development Poles is promising for those seeking growth translating into decent-paying jobs. However, this progress must be accompanied by comprehensive public policies establishing a framework based on legal certainty, input availability, and fair rules of the game—essential for all to thrive.
