The relocation of the Mexican Social Security Institute (IMSS) from Mexico City to Michoacán will provide an almost 7-billion peso boost to the historically impoverished state, according to state authorities.

The state minister for urban development and transport, Gladys Butanda Macías, said the investment in Michoacán would provide a 6.85-billion peso (US $351 million) economic spillover, representing the biggest financial lift since the Sicartsa steel mill was installed in Lázaro Cárdenas in 1976.

The Michoacán state government said the infrastructure plan includes the construction of a 14-story office complex to accommodate many of the 10,500 IMSS workers from 15 departments set to arrive in the state. It predicts an investment of 2.5 billion pesos (US $128 million) to build the new offices which it said will create 6,500 construction jobs.

In a second phase, three new regional hospitals are slated for construction in Uruapan, Zitácuaro and Morelia, promising an investment of some 4.35 billion pesos.

The state government added that 40% of the workers would move to Morelia in 2022 and the remainder the following year.

Macías said the relocation of the IMSS headquarters would create wider indirect economic benefits for the state. “Now that the fiscal domicile is here in Morelia it’s an anchor for suppliers and those in Morelia and Michoacán to increase their sales,” she said.

Macías added that utilizing land belonging to the state government would help it write off some of its debt to the federal government.

Much of President López Obrador’s plan to decentralize federal government departments remains unfinished. The health ministry is operating in Acapulco, Guerrero, and the culture ministry in Tlaxcala. The education ministry has not yet completed its move to Puebla.

With reports from Milenio