OECD Territorial Reviews_ Chihu - OECD

267 Pages·3.174 MB·English

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Assessment and recommendations ial R OECD Territorial Reviews
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Chapter 1. Chihuahua’s economic model and challenges v
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Chapter 2. Policies and institutions to enhance economic growth w CHIHUAHUA, MEXICO
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Chapter 3. Tackling inequality to foster growth
Chapter 4. Going local to enable complementarities
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Please cite this publication as: , M
OECD (2012), OECD Territorial Reviews: Chihuahua, Mexico 2012, OECD Publishing. E
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http://dx.doi.org/10.1787/9789264168985-en IC
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ISBN 978-92-64-12897-2 -:HSTCQE=VW]^\W:
04 2012 02 1 P

OECD Territorial Reviews:
Chihuahua, Mexico
2012
This work is published on the responsibility of the Secretary-General of the OECD. The
opinions expressed and arguments employed herein do not necessarily reflect the official
views of the Organisation or of the governments of its member countries.
This document and any map included herein are without prejudice to the status of or
sovereignty over any territory, to the delimitation of international frontiers and boundaries
and to the name of any territory, city or area.
Please cite this publication as:
OECD (2012), OECD Territorial Reviews: Chihuahua, Mexico 2012, OECD Publishing.
http://dx.doi.org/10.1787/9789264168985-en
ISBN 978-92-64-12897-2 (print)
ISBN 978-92-64-16898-5 (PDF)
Series: OECD Territorial Reviews
ISSN 1990-0767 (print)
ISSN 1990-0759 (online)
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© OECD 2012
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3
FOREWORD –
Foreword
In a world marked by economic slowdown, ageing, migration, climate change and
increasing inequality, policy makers are looking for new development paths.
International debate since the crisis has called traditional economic models into question
and the search is on for new approaches that can better reconcile economic growth with
other social and environmental objectives. This crucial debate is focusing attention on the
role that regions play in national economies, both as sources of underexploited potential
and as the places where different policies can be most effectively integrated. Indeed,
policy trade-offs are best addressed at the regional level, where it is often possible to
identify the ways in which economic, social and environmental policies can be mutually
reinforcing, rather than antagonistic, thereby optimising use of scarce public funds.
The search for a new, more sustainable path to economic recovery is a global
challenge, but also very much a regional concern. The State of Chihuahua is at a
crossroads. After a period of remarkable success in attracting foreign direct investment
and advancing up the technological ladder, it has been losing growth impetus for a
number of years. As in many other regions, the crisis has exacerbated weaknesses that
were already present. Now, with limited resources and pressing economic and social
challenges, the state has to develop a new vision for its future. This review aims to
support the government in its efforts to find new paths for development and to reduce
inequality, while at the same time providing ideas for other regions in Mexico and
elsewhere that are facing similar challenges.
The recommendations that the OECD makes in this review are relevant for other
regions that have been successful at benefiting from an outward-oriented development
model, but that now need to strike a better balance with more endogenous sources of
growth. The review’s recommendations can be grouped in three broad categories. First,
to strengthen inter-relationships among economic agents that can be, for instance,
generated by policies to create innovation networks. Second, to further seek the
integration of policies that can generate complementarities between economic, social and
environmental objectives, such as the link that needs to be established between policies
for FDI and for local-firm development. Third, to foster the inclusion of other actors in
policymaking and the inclusion of vulnerable groups in society.
We at the OECD hope that the analysis and recommendations presented in this
Review will help policy makers in Chihuahua and elsewhere to devise and implement
policies that can make their economies stronger, cleaner and fairer. The challenges are
enormous, but so is the potential.
Rolf Alter,
Director of Public Governance and Territorial Development
OECD TERRITORIAL REVIEWS: CHIHUAHUA, MEXICO © OECD 2012
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– ACKNOWLEDGEMENTS
Acknowledgements
This Review was produced by the Regional Development Policy Division within the
OECD’s Public Governance and Territorial Development Directorate (GOV) headed by
Rolf Alter, in collaboration with the Government of the State of Chihuahua and the
support of its Economic Development Council (CODECH). Special thanks to the
Governor of the State of Chihuahua, Mr. César Duarte Jáquez for his support throughout
the process. The Secretariat is also very grateful to H.E. Mr. Agustín García-López
Loaeza (Mexico’s Ambassador to the OECD) and Mrs. Sara Topelson (Mexico’s Under-
Secretary of Urban Development and Territorial Planning, SEDESOL) for their constant
support from the outset.
Special thanks to the local review team, which was co-ordinated by Rodolfo
Valenzuela (Director of CODECH) and Oliver Torres (Co-ordinator of CODECH), and
included a group of very committed public and private actors most notably by Jorge
Contreras (President of CODECH), Jorge Cruz (President of DESEC), Gabriel Ortiz-
Hernan (former President of CODECH), Alonso Ramos (President of CODERs) and
Carlos Villanueva (Director of Planning, Chihuahua State Government), assisted by
Felipe Terrazas and Ernesto López (CODECH staff).
The OECD Territorial Review of Chihuahua belongs to a series of OECD Territorial
Reviews produced by the OECD’s Regional Development Policy Division (RDP),
directed by Mr. Joaquim Oliveira Martins within the Organisation’s Directorate for
Public Governance and Territorial Development.
This Review was co-ordinated and drafted by Javier Sánchez-Reaza, under the
supervision of Ms. Lamia Kamal-Chaoui, Head of the Urban Development Programme
(RDP), with contributions from Aziza Akhmouch, José-Luis Álvarez-Galván, Michael
Donovan, Jacobo García-Villarreal, Karen Maguire, Ernesto López-Córdova (IDB), Carlo
Pietrobelli (IDB), Joan Prats (IDB) and Raffaele Trapasso. Vicente Ruiz, Daniel Sánchez-
Serra and Julien Vavasseur provided very useful help with statistics. Key comments were
provided by José Antonio Ardavín in the early stages of the review, and William
Tompson during the drafting phase. Ms. Jeanette Duboys prepared the manuscript for
publication.
The Secretatariat is also grateful to a team of international peer reviewers that
participated in the review process:
• Italy: Mr. Marco Magrassi (Italy’s Ministry of Finance and Economy)
• USA: Mrs. Eloisa Klementich (US Department of Commerce)
The review similarly benefited from the knowledge and insight of a team of
international experts: Prof. Mike Danson (University of the West of Scotland), Prof.
David Freshwater (University of Kentucky), Prof. Rongxing Guo (Regional Science
Association of China) and Mr. Nick Vanston (Economic Consultant).
OECD TERRITORIAL REVIEWS: CHIHUAHUA, MEXICO © OECD 2012
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ACKNOWLEDGEMENTS –
The review is the product of a successful collaboration with the Inter-American
Development Bank (IDB). The Secretariat is grateful to Ernesto López-Cordova, Carlo
Pietrobelli and Joan Prats, whom as IDB officials took part in missions, contributed to the
discussion, provided inputs and were effective partners to create a ‘landing gear’ for the
recommendations that the review is making. The OECD is also thankful to Jorge Silva
from the North American Development Bank (NADBank) for taking part in one mission
and on discussions on border-related issues.
The review was possible thanks to the support of regional officials: Mr. Alberto
Chretín (Secretary of Economy), Mr. Javier Garfio (Secretary of Urban Development)
and Mr. Octavio Legarreta (Secretary of Rural Development). Other key participants
include Mario Alberto Fernández, Luis Donato Nava (CONAGO), Pedro Ávila
(Secretariat of Finance), Diana Contreras (Secretariat for Rural Development), Silvia
Castro (Urban Development and Ecology), as well as David Dajlala Ricarte, Juan Ubaldo
Benavente, Sergio Jurado, Luis Fausto Ornelas and Ulises López Villarreal from the
Secretariat of Economy.
The OECD also wishes to thank the more than 200 actors from the private sector,
civil society and academia that participated in several meetings. The missions took place
in Chihuahua City, Cuauhtémoc, Delicias, Juárez-El Paso, Mexico City, Nuevo Casas
Grandes and Parral thanks to the participation of key institutions and actors among which:
ALCODESA, the Maquiladora Association NPO (AMAC), the State of Chihuahua’s
Maquiladora Association NPO (AMEAC), the Chihuahua Vive Programme, the
Community Centres Programme, the state’s National Chamber of Manufacturing
(CANACINTRA), the Advanced Materials Research Centre (CIMAV), the Border
Environment Co-operation Commission, the the City of El Paso (Texas), the City of Las
Cruces (New Mexico), the City of Sunland (New Mexico), El Paso Chamber of
Commerce, Grupo La Norteñita, the Municipality of Juárez’s Planning Institute (IMIP),
Chihuahua Municipality’s Planning Institute (IMPLAN), the State’s Housing Institute
(IVI), LACMENO, the municipal governments of Chihuahua, Juárez, Parral and
Samalayuca, the North American Development Bank (NADBank), Pavos Parson, the
Paso del Norte Group, Plan Estratégico de Juárez, Regional Development Corporation
(REDCO), SOFI de Chihuahua, Southwest Maquila, Textron International Mexico,
UNIFRUT, Autonomous University of Chihuahua (UACH), Autonomous University of
Juárez (UACJ), the University of Texas at El Paso (UTEP) and the US Federal Reserve
Bank of Dallas-El Paso Branch. The OECD is also thankful to: Abelardo Armendariz,
Miriam Castellanos Pacheco, Pierre Yves Chicoineau, Lisa Colquit-Muñoz, Bob Cook,
Roberto Coronado, Oscar Corral, Rosario Díaz Arellano, José Antonio Enríquez, Miguel
Fernández Iturriza, Claudio Fierro Islas, Roberto Flores Medina, Arturo Fuentes Velez,
José Luis García Naranjo, Héctor García Nevarez, Julio González Lardizábal, Ana Laura
González Valdez, Kelly Jones, Marco Parson, Myriam Rappa Gudiño, John Roberts,
Magda Rubio, Jorge Ruiz, Jesús Ruíz Palma, Héctor Tarango, Alberto Terrazas Seyffert,
Francisco Uranga and Silvia Venzor for useful presentations and discussions while on
mission. The OECD is also grateful to federal authorities of the ministries of Agrarian
Reform, Economy, and Energy, in particular to Jaime Tomas Ríos Bernal (Mexico’s
Under-Secretary of Rural Property), and Leonardo Ríos Guerrero (Deputy Director,
National Council for Science and Technology (CONACYT) for their time and policy
discussion during meetings.
OECD TERRITORIAL REVIEWS: CHIHUAHUA, MEXICO © OECD 2012

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TABLE OF CONTENTS –
Table of contents
Acronyms and Abbreviations ......................................................................................... 11
Assessment and Recommendations ................................................................................ 15
Chapter 1. Chihuahua’s Economic Model and Challenges .......................................... 33
Overview ........................................................................................................................ 34
1.1. Economic growth and productivity ......................................................................... 37
1.2. Determinants of growth .......................................................................................... 51
1.3. FDI and clusters ...................................................................................................... 70
Notes .............................................................................................................................. 87
Bibliography .................................................................................................................. 88
Chapter 2. Policies and Institutions to Enhance Economic Growth ............................ 93
2.1. Institutional framework in Chihuahua .................................................................... 94
2.2. Policies to enhance endogenous growth ................................................................. 96
2.3. Multi-level governance to facilitate co-ordination ................................................ 134
Notes ............................................................................................................................ 151
Bibliography ................................................................................................................ 152
Chapter 3. Tackling Inequality to Foster Growth ....................................................... 159
3.1. The many expressions of inequality ...................................................................... 160
3.2. Insecurity, social issues and citizen participation ................................................. 169
3.3. Policies to tackle social challenges ....................................................................... 174
3.4. Fiscal challenges ................................................................................................... 178
Notes ............................................................................................................................ 191
Bibliography ................................................................................................................ 192
Chapter 4. Going Local to Enable Complementarities ............................................... 197
4.1. The role of space and place-based policies to manage equity and efficiency
objectives ..................................................................................................................... 198
4.2. Urban challenges and policies for development ................................................... 202
4.3. Rural challenges in Chihuahua ............................................................................. 218
4.4. Water governance: wider integrated planning at the state level ........................... 238
Notes ............................................................................................................................ 251
Bibliography ................................................................................................................ 252
Annex A ........................................................................................................................ 256
Annex B ........................................................................................................................ 258
OECD TERRITORIAL REVIEWS: CHIHUAHUA, MEXICO © OECD 2012
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– TABLE OF CONTENTS
Tables
Table 1.1. Chihuahua's economic structure, 2003 and 2009 ..................................... 35
Table 1.2. Private investment in Chihuahua by sector .............................................. 55
Table 2.1. Economic and manufacturing development programmes
implemented by the state of Chihuahua ................................................. 100
Table 2.2. Programmes in the Secretariat of Economy for the commercial
sector ...................................................................................................... 113
Table 4.1 Abandoned homes in Chihuahua, 2010 ................................................. 206
Table 4.2. A comparison of bus rapid transit systems in Latin America ................ 213
Table 4.3. Leading farming activities in Chihuahua ............................................... 222
Table 4.4. National Water Commission’s multi-level co-ordination efforts .......... 247
Table 4.5. Comparison of Mexican states’ legal frameworks ................................. 248
Figures
Figure 1.1. Economic growth, 2000-07 ...................................................................... 37
Figure 1.2. Sources of real income gaps in the OECD in 2009 ................................. 38
Figure 1.3. Productivity growth in the OECD ........................................................... 39
Figure 1.4. State contribution to national growth ....................................................... 40
Figure 1.5. Regional economic growth, 1995-2000 ................................................... 40
Figure 1.6. Regional economic growth, 2000-07 ....................................................... 41
Figure 1.7. Exports by state in Mexico, 2000 ............................................................ 43
Figure 1.8. Factors influencing income differences across Mexican states ............... 44
Figure 1.9. Economic growth among Mexican states, 2004-09 ................................. 46
Figure 1.10. Real annual economic growth in Chihuahua, 1995-2006 ........................ 47
Figure 1.11. Real annual economic growth in Chihuahua, 2003-09 ............................ 48
Figure 1.12. Chihuahua's growth factors ...................................................................... 50
Figure 1.13. Growth factors in Mexican states ............................................................ 51
Figure 1.14. Public investment by Mexican states ....................................................... 53
Figure 1.15. Public expenditure by Municipalities in Chihuahua and Mexico ............ 54
Figure 1.16. Sectoral investment growth and shares .................................................... 55
Figure 1.17. Skills in selected OECD TL2 regions ...................................................... 56
Figure 1.18. Educational attainment in Mexican states ................................................ 57
Figure 1.19. Concentration of skills in the OECD and Chihuahua .............................. 58
Figure 1.20. Degrees awarded by Mexican universities by state ................................. 59
Figure 1.21. Basic education among Mexican states ................................................... 60
Figure 1.22. Skills in Chihuahua by municipality ........................................................ 61
Figure 1.23. University enrolment in Mexico and Chihuahua by field of study .......... 62
Figure 1.24. Quality of schooling in Mexican states: the PISA test............................. 63
Figure 1.25. PISA results, 2009 ................................................................................... 64
Figure 1.26. Human capital in science and technology in Mexico by state ................. 68
Figure 1.27. Patent applications by Mexican states ..................................................... 69
Figure 1.28. Chihuahua's links for innovation ............................................................. 70
Figure 1.29. Evolution of FDI stocks around the world ............................................... 72
Figure 1.30. Relative importance of FDI ..................................................................... 73
Figure 1.31. Evolution of FDI flows in Mexican states ............................................... 74
Figure 1.32. Labour costs compared ............................................................................ 75
Figure 1.33. Wage growth in the manufacturing sector ............................................... 75
Figure 1.34. OECD's FDI restrictiveness index, 2010 ................................................. 76
OECD TERRITORIAL REVIEWS: CHIHUAHUA, MEXICO © OECD 2012