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 he Partnership for Prosperity representatives of both the U.S. and Mexican government presented this report at the United Nations Financing for Development conference that took place from March 18-22, 2002 in Monterrey, Mexico. The Partnership proposes to leverage private resources to achieve economic development goals.
The Action Plan for the U.S.-Mexico Partnership for Prosperity outlines a number of the steps that the two countries may pursue in order to increase economic and labor opportunities in less developed areas of Mexico.
A. EXPANDING AND BROADENING
ACCESS TO CAPITAL
Expanding and broadening access to capital in Mexico is a critical component of the Partnership's growth-promotion strategy. Though Mexico has been remarkably successful at attracting investment, a substantial portion of capital has traditionally flowed to just a handful of regions. For example, 95 percent of all foreign direct investment channeled into Mexico in the second half of the 1990s was funneled to just nine states (mostly along the U.S.-Mexican border) and the Federal District. The remainder was spread among the other 22 states. A primary goal of the Partnership is to remove obstacles that prevent capital from flowing freely to all parts of Mexico, particularly those areas that are less developed. These initiatives focus on
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improving Mexican entrepreneurs' and farmers' access to sources of capital on more competitive terms by broadening the array of financing options available. These initiatives also seek to enhance understanding of the financial system and equip citizens with the tools needed to make good economic choices.
REMITTANCES: LOWERING THE COST OF SENDING MONEY HOME
-- The Partnership will work to lower the cost to Mexicans working in the United States of sending money home by, in part, encouraging more banks to market aggressively the opening of accounts to Mexican workers and offer remittance features in their accounts. For example, the U.S. Treasury's First Accounts and Financial Literacy programs will introduce more people to the use of formal financial institutions, such as banks and credit unions, where the cost of sending money is less. Private-sector initiatives, such as the $10 remittance products now being offered by several institutions
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including Wells Fargo, Bancomer, and the Border Federal Credit Union, also will contribute to lowering the cost of remittances from the U.S. to Mexico.
-- The Partnership endorses the use of remittances to support development projects and create jobs in Mexico. For example, the Inter-American Foundation will grant $2 million (to be matched by the private Mexican foundation Fundamex) to 90 communities in 21 Mexican states with the highest rates of poverty and migration to the U.S. A wide range of development projects will improve the quality of life in these rural communities and offer income-generating opportunities in agriculture, micro-enterprise, and marketing.
-- The Partnership endorses the Inter-American Development Bank (IDB)'s recent Multilateral Investment Fund (MIF) grant to Mexico to promote the development of international Automated Teller Machine infrastructure to improve access to banking services in rural Mexico. They support IDB and the World Bank efforts to fund additional projects.
HOUSING: PROMOTING PRIVATE INVESTMENT TO MEET DEMAND
-- The Partnership will work to facilitate investment in Mexican housing by Mexicans in the U.S. through cross-border mortgages and construction loans. The project will design, implement, and evaluate a pilot program to link mortgages to the source of remittances. This project will
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