Sovereignty and Nearshoring: Compatible or Incompatible?

(Expansion) - Mexico faced with the Nearshoring energy opportunity

“Some countries on the continent such as Brazil and Chile have taken a step forward, let's do the same in our country; this great opportunity, combined with the Trade Agreement with the US and Canada, places us in excellent conditions to achieve more and better results, which invites Mexico to be at the forefront,” says Alejandro Ledesma, CCO of REGULUS.

Electricity, for domestic use and industrial motor

Electricity has ceased to be a simple resource for illuminating spaces, and has become an essential input for the operation of complex automated industrial buildings that drive the production of goods and services. It is therefore key to redefine its role: from a basic resource for the household to a strategic component within the production chain.

Technology and electricity: a historic alliance

Since the 18th century, scientific and technological advances have been profoundly linked to electricity and its application in different sectors: domestic, agricultural, commercial and industrial. Today, in the 21st century, it is essential that the conceptual evolution of electricity be aligned with current challenges.

Nearshoring: a phenomenon with an energy impact

In the current context, the world has given way to emerging economic trends such as relocation or Nearshoring. This practice, which emerged as a result of global interruptions in supply chains, seeks to bring companies closer to their strategic markets. However, this strategy faces challenges when faced with rigid interpretations of the concept of “Sovereignty”.

Energy Sovereignty: Necessary Redefinition

The concept of sovereignty, understood as the power of the people according to Rousseau, ranges from State authority to resource management. In Mexico, “Energy Sovereignty” has no explicit definition in the National Development Plan 2019-2024. It was not until the Sectorial Energy Program 2020-2024 that it was referred to, highlighting the strengthening of State productive enterprises as guarantors of national energy security and development.

However, to think that sovereignty is exercised solely through state control of goods and services, especially in energy infrastructure, is a mistake. The key lies in a “Win-Win” strategy where the public, private and social sectors participate in a harmonious way.

Joint investment, not privatization

Allowing the participation of the private sector is not equivalent to ceding strategic resources, but rather to generating more added value for the benefit of the country. Shared investment does not weaken sovereignty; on the contrary, it strengthens and expands it.

Mexico: unbeatable conditions for Nearshoring

The Mexican Government has recognized the potential of Nearshoring. During the LatInFinance Finance and Infrastructure Forum in July, Undersecretary Gabriel Yorio González, of the SHCP, noted that specific incentives are being created for strategic sectors such as electronics, pharmaceuticals, transportation, microprocessors and aerospace. In 2023, nearly 47 new industrial parks were registered in the country, a growth of 30% compared to 2001.

An opportunity not to be missed

The growing demand for industrial spaces in the north and the Bajío reflects interest in investing in Mexico. Limiting this wave of investment by strict interpretations of national sovereignty could hold back development.

Final Thoughts

1. The future requires modern and inclusive public policies to ensure survival and sustainable development.
2. The State must ensure a clear legal framework that encourages investment in the energy sector.
3. Mexico faces an historic opportunity to position itself as a highly attractive country for foreign investment.
4. A fiscal reform that promotes investment in infrastructure and energy would strengthen the benefits of Nearshoring.

Editor's Note: Alejandro Ledesma is CCO of REGULUS. The opinions expressed in this column are the sole responsibility of the author.