Mexico needs a “jolt” in infrastructure spending to trigger economic growth, business magnate Carlos Slim said on Monday.

In an address after receiving the National Engineering Award from President López Obrador, Slim highlighted that China has spent 12% of GDP on public works during the past decade and asserted that Mexico needs to boost its own outlay on infrastructure in order to stimulate the economy.

“We need a jolt, a transformation, a change that allows us to start to have the growth that our country deserves,” he said, adding that people’s purchasing power also needs to increase in order to have sustained economic expansion.

Slim said that infrastructure projects are especially important in the southeast, where the government is planning to build the Maya Train and a new oil refinery, and develop a trade corridor across the Isthmus of Tehuantepec.

As a starting point, the government and private sector should together aim to reach annual investment of 5% of GDP in infrastructure (926.86 billion pesos or US $47.9 billion, according to statistics agency Inegi) and the latter should take advantage of low-interest loans to fund their projects, he said.

“I believe that private investment [in infrastructure] can be substantial, the majority,” Mexico’s richest man said in an interview, adding that a lot of low-interest loans are available across the world.

“We have to take advantage of this funding . . . There is liquidity in the banking sector, there are a lot of resources so what needs to be done is to carry out the greatest number of projects possible,” Slim said.

The Grupo Carso chairman applauded the government’s plan to extend internet coverage to rural areas through the creation of a subsidiary of the Federal Electricity Commission.

“Now with your telephone, if you have an internet connection, you can take Harvard, Stanford or Khan Academy courses in the Tarahumara Sierra, a lot of off-site learning opportunities open up,” Slim said.

The tycoon said that his companies will have invested 36 billion pesos (US $1.9 billion) in Mexico by the end of the year and that the outlay “will be even bigger” in 2020 – “practically 25% of the investment we make in the world.”

Slim said in October that his companies would bid for Maya Train contracts and carry out telecommunications projects during López Obrador’s administration in Mexico and Central American countries.

Source: Reforma (sp)