The CEO of JPMorgan Chase has lauded Mexico as a nearshoring and business destination, saying that it may be the best country in the world in which to invest.
In an interview with El Financiero Bloomberg TV during a visit to Mexico this week, Jamie Dimon was asked about the attractiveness of Mexico as an investment destination and the challenges the country needs to address to take full advantage of the nearshoring opportunity.
“I think it’s one of the great opportunities. … If you had to pick a country this might be the number one opportunity,” he said.
Dimon, CEO of JPMorgan Chase for the past 18 years, said that Mexico could become an even more attractive investment destination by making improvements in a range of areas, but stressed that the country already has a lot of positives.
“Remember you already have very capable companies here, universities, infrastructure, technology,” he told El Financiero Bloomberg.
“… The better you do with infrastructure, the better you do with affordable energy costs, the better you do with universities, the better you do with good policy, [Mexico] will be better for that, but you already have a lot of it [and] you already have more companies moving operations here,” Dimon said.
“And I’d add security, which I think is a mutual problem for America and Mexico. I hope we’re working on it together because the more we can solve that the better it is for both countries. Of course there are problems, [but there are] still huge opportunities,” the billionaire banker said.
Despite security concerns in Mexico, Dimon described North America and South America as “seas of peace and tranquility in the world you see today” and asserted that countries in the region have an opportunity to take advantage of their relative peace in an economic sense, including by attracting more investment.
For the bank he leads — one of the largest in the world — “Mexico is a critical market,” the CEO said.
“We’ve been here for 120 years, we’ve been all over Latin America for well over 100 years. … We invest for the long run. We’ve doubled or tripled our capital here in the last six years. We cover more clients and private banking, investment banking, asset management, so our commitment is total,” he said.
Dimon, who met with Mexican business leaders while he was in Mexico City, identified manufacturing, including advanced manufacturing, and agriculture as among the sectors that have the greatest opportunity to benefit from the growing nearshoring phenomenon, in which companies establish a presence in Mexico to be close to the lucrative U.S. market while taking advantage of a range of favorable factors here, such as competitive labor costs.
Indeed, numerous foreign manufacturing companies have recently announced plans to establish or expand operations in Mexico, including Tesla, Ternium and Kawasaki.
Foreign direct investment in Mexico is on the rise, but Dimon believes there is significant scope to attract more capital from abroad.
“I look at your capital market — just to give you some numbers your GDP is US $1.3 trillion in Mexico, your market cap is $400 billion,” he told El Financiero Bloomberg presenter Susana Sáenz.
“It could and should be a lot more than that so there’s a huge opportunity to have capital markets grow here, to bring both more foreign direct investment and [to have] more investment here,” Dimon said before praising Mexico’s tech sector.
“I have met with a bunch of high-tech companies that are very impressive, so I think you’ll see that grow,” he said.
Later in the interview, Dimon said that “Mexico should aspire to do much more” to grow its economy.
“It’s about policy, you’ve already mentioned infrastructure but it’s [also] about work skills, effective regulation, transparency, corporate governance, rapid permitting. It’s all those things [and] consistency of law that have a country grow,” he said.
“And the important part of having a country grow, it helps all of the citizens. There are more taxes, you have more wherewithal. It’s not just for big companies that you want to grow an economy, you really want it for everybody, every job created is a job for someone,” Dimon said.
Data published in late October showed that Mexico’s economy grew 3.5% in the first nine months of the year compared to the same period of 2022, exceeding expectations.
One person who has similar views to Dimon about Mexico’s economic potential is Nuevo León Governor Samuel GarcÃa, a presidential aspirant who has courted investment from several foreign firms.
He said earlier this year that the nearshoring phenomenon could spur annual economic growth of up to 10% in Mexico.
While there are “circumstances of crisis and risk” around the world, “the planets are aligning for our country,” GarcÃa said at a business forum in March.
Claudia Shienbaum, the ruling Morena party’s candidate for the 2024 presidential election, said in August that nearshoring will help drive significant economic growth during the six-year period of the next federal government, while Xóchitl Gálvez, candidate for the Broad Front for Mexico opposition bloc, has described the relocation of foreign firms to Mexico as “the country’s best opportunity” for growth.
Mexico News DailyÂ
Well, Mexico should not go back to becoming a colony of international corporations and Chase should get off its butt and open up banks in Mexico.
Very exciting to hear Jaime Dimon’s perspective. He travels everywhere and sees a lot in his role. For him to speak so highly of Mexico’s potential is inspiring.
Thank you for publishing these articles communicating the critical need for more good Mexican policy and consistent practice
Yes. The Americas are a relative sea of tranquility at this time providing a unique opportunity. Strengthening work skills, and educational opportunities in Mexico (which is happening) is a boon for all the Americas.
This is big. Bigger than Tesla. Dimon knows his stuff, and the fact he’s spending time here indicates he wants to buy in (to the next government). And of course he’s right, growth does make a difference for everyone. You know this is if you come from a low growth state and visit a place like Texas where generally people are happy, optimistic, doing fun activities despite it being a featureless and uninspiring landscape. Mexico could have it all… and just might
one very important part that is missing for Mexico’s growth for ALL…WAGES. The wealthy don’t pay the workers a wage they can live on. Thats the Reason for immigration moves to go North to the U.S. IF the workers could get a decent wage in Mexico, they would NOT Leave home.
I can’t find a white collar Mexican that wants to come to the states. You are right but that’s talking about laborers and factory type workers. If you’re in IT or other white collar field even with the lower wages you have a better life in Mexico than here. Educated Mexicans with certain degrees and exp can work without a h1b in the states. Same as Canadians. They just don’t want to.
The problem in the US is workers think they are worth more than they are.
Totally agree! Wages need to rise to help create a strong middle class. Unfortunately, the hacienda mentality still exists and 50% of Mexico lives in poverty. Maybe more investment along with major infrastructure improvement (water/sewer/roads) can help move Mexico forward!
Mexico can go a long way to help their own, as far as Education is concerned…The Mexican government only supports education to grade 10. After that the Families are on their own to pay….Education should be a high priority.
Infrastructure, like getting water to homes has been an ongoing problem for many investors, here in the Los Barriles, La Paz area…..Yet they continue to approve building permits…It is not that the Township does not have an ample supply of water, but rather a non existent infrastructure for it and a non caring attitude!…..Just lining their pockets.!.
One has to test- in to finish “prepatoria” which is is essentially a junior or senior in high school. University is free only for those who are smartest, often from families with wealth. A big increase in public investments would rapidly increase the middle class and grow the economy through internal consumption. Think the USA, 70% of our GDP is consumer driven.
Echoing others here — more focus on education and job training would make such a difference. In my short time living here I see so much potential in the Mexican people. But not so much investment in developing the talent, and without practical opportunities, a lot of people just don’t see a path forward unless it’s leaving the country.