NADB, INFRASTRUCTURE AND NADB, INFRASTRUCTURE AND COMPETITIVENESSCOMPETITIVENESS

22 Raúl Rodríguez

MEXICO’S COMPETITIVENESS DECLINEMEXICO’S COMPETITIVENESS DECLINE ( IMD’S RANKING AMONG 60 ECONOMIC REGIONS; 1 = BEST )( IMD’S RANKING AMONG 60 ECONOMIC REGIONS; 1 = BEST )

0

10

20

30

40

50

60

1992 1994 1996 1998 2000 2002 2004 2006

Ran

king

Source: IMD; The World Competitiveness YearbookSource: IMD; The World Competitiveness Yearbook

33 Raúl Rodríguez

US – MX US – MX TRADETRADE TRIPLED; TRIPLED; DFIDFI TRIPLED TRIPLED

PER CAPITA GDPPER CAPITA GDP RANK: RANK:

U.S.: U.S.: 2 2ndnd

MEXICO: MEXICO: 7575thth

AVERAGEAVERAGE PER CAPITA GDPPER CAPITA GDP U.S. / MEXICO: U.S. / MEXICO:

1980: 3 TIMES1980: 3 TIMES

2000: 4 TIMES2000: 4 TIMES

PER CAPITA GDPPER CAPITA GDP EVOLUTIONEVOLUTION 1980 - 2000: 1980 - 2000:

PORTUGAL:PORTUGAL: FROM 38% TO 49% / U.S. FROM 38% TO 49% / U.S.

MEXICO:MEXICO: FROM 32% TO 25%FROM 32% TO 25%

INCOME DISPARITIES:INCOME DISPARITIES: RICHEST 20% VS. POOREST 20%: RICHEST 20% VS. POOREST 20%:

U.S.: U.S.: 4 TIMES 4 TIMES

MEXICO: MEXICO: 20 TIMES20 TIMES

MEXICO’S MEXICO’S REGIONALREGIONAL & & SECTORALSECTORAL DISPARITIES: DISPARITIES: NORTH CONTRIBUTES THREE TIMES MORE THAN SOUTH TO GDP & GROWS TWICE AS FASTNORTH CONTRIBUTES THREE TIMES MORE THAN SOUTH TO GDP & GROWS TWICE AS FAST

LAST 6 YRS.: EXTERNAL SECTOR GREW 12.5 TIMES MORE RAPIDLYLAST 6 YRS.: EXTERNAL SECTOR GREW 12.5 TIMES MORE RAPIDLY

MEXICO:MEXICO:INTEGRATION WITH NO CONVERGENCEINTEGRATION WITH NO CONVERGENCE

POPULATIONPOPULATION HAS HAS

DOUBLED IN:DOUBLED IN:

U.S.: U.S.: 60 YEARS60 YEARS

MEXICO: MEXICO: 30 YEARS30 YEARS

44 Raúl Rodríguez

AGENDA FOR COMPETITIVENESSAGENDA FOR COMPETITIVENESS

1.1. PRESERVE PRESERVE OPENOPEN & & STABLESTABLE ENVIRONMENT ENVIRONMENT

2.2. PURSUE PURSUE STRUCTURAL REFORMSSTRUCTURAL REFORMS

FISCAL, ENERGY, LABOR, AGRIC., MUNICIPALFISCAL, ENERGY, LABOR, AGRIC., MUNICIPAL

3.3. IMPROVE IMPROVE GOVERNANCE GOVERNANCE & MODERNIZE & MODERNIZE INSTITUTIONSINSTITUTIONS

4.4. REFORM REFORM JUDICIALJUDICIAL SYSTEM SYSTEM

5.5. REVAMP REVAMP EDUCATIONEDUCATION SYSTEM SYSTEM

6.6. INCREASE INCREASE INFRASTRUCTUREINFRASTRUCTURE INVESTMENTS INVESTMENTS

55 Raúl Rodríguez

MEXICO: MEXICO: INFRASTRUCTURE & COMPETITIVENESSINFRASTRUCTURE & COMPETITIVENESS

MEXICOMEXICO NEEDS TO INVEST NEEDS TO INVEST > $ 25 BILLION> $ 25 BILLION ANNUALLY ANNUALLY

$3.5 BILLION$3.5 BILLION NEEDED FOR NEEDED FOR W & WWW & WW. . FISCAL FISCAL BUDGETBUDGET MAY COVER MAY COVER < 30%< 30% NEEDS NEEDS

WORLD RANKING (AMONG 60 ECONOMIC REGIONS) OF WORLD RANKING (AMONG 60 ECONOMIC REGIONS) OF INFRASTRUCTUREINFRASTRUCTURE AS KEY FACTOR FOR AS KEY FACTOR FOR COMPETITIVENESSCOMPETITIVENESS: :

20002000 20032003

UU..S.S. 1 1 1 1

CANADACANADA 1111 6 6

MEXICOMEXICO 4040 5858IMD World Competitiveness YearbookIMD World Competitiveness Yearbook

66 Raúl Rodríguez

LENDING TO ENVIRONMENTAL SECTORSLENDING TO ENVIRONMENTAL SECTORS(WATER, WASTEWATER, SOLID WASTE)(WATER, WASTEWATER, SOLID WASTE)

% OF TOTAL LENDING IN 2002% OF TOTAL LENDING IN 2002

WORLD BANK:WORLD BANK: 2.8%2.8%

EUROPEAN BANK (EBRD):EUROPEAN BANK (EBRD): 5.1% 5.1%

IDB:IDB: 6.1%6.1%

MEXICO:MEXICO:

CURRENT LINES OF CREDIT:CURRENT LINES OF CREDIT: DISBURSEMENTS DISBURSEMENTS < 15.3% < 15.3%

BANOBRAS:BANOBRAS: 10.6% OF TOTAL PORTFOLIO 10.6% OF TOTAL PORTFOLIO

77 Raúl Rodríguez

COST RECOVERY IN PUBLIC UTILITIES (%)COST RECOVERY IN PUBLIC UTILITIES (%)

160

80

65

40

0

20

40

60

80

100

120

140

160

Telecomm. Gas Electricity Water

88 Raúl Rodríguez

ENVIRONMENTAL PROJECTSENVIRONMENTAL PROJECTSKEY ISSUESKEY ISSUES

REVENUE /TARIFFS

PLANNING& COORD.

PERSONNEL

EFFICIENCIES

LEGALFRAMEWORK

POLITICS

CREDIT-WORTHINESS

GUARANTIES

LOANRATES &TERMS

SIZE,RISKS &

RETURNS

DISEÑO

PROJECTPROJECTSUCCESSSUCCESS

FINANCIALFINANCIAL

TECHNICALTECHNICAL ADMINISTRATIVEADMINISTRATIVE

POLITICALPOLITICAL

BIDS &CONTRACTS

TIME

DESIGN

BUDGET&

FUNDING

BECC - NADBankBECC - NADBank

1010 Raúl Rodríguez

NADBank: INITIAL SLATENADBank: INITIAL SLATE(1995 - 1997)(1995 - 1997)

LIMITEDLIMITED MANDATEMANDATE: :

SECTORS:SECTORS: WATER, WASTEWATER, SOLID WASTEWATER, WASTEWATER, SOLID WASTE

GEOGRAPHY:GEOGRAPHY: 100 KM.100 KM.

LIMITEDLIMITED INSTRUMENTS INSTRUMENTS::

LENDINGLENDING AT AT MARKET RATESMARKET RATES; NO SUBSIDIES; NO SUBSIDIES

NO GRANTSNO GRANTS, NO TECHNICAL ASSISTANCE, NO TECHNICAL ASSISTANCE

NO SOVEREIGNNO SOVEREIGN GUARANTIESGUARANTIES

1111 Raúl Rodríguez

IMPROVED IMPROVED FINANCIAL INSTRUMENTSFINANCIAL INSTRUMENTS

EXPANDED EXPANDED SECTORSSECTORS, , WITHIN ORIGINAL WITHIN ORIGINAL CHARTER:CHARTER:

AGRICULTURAL WATER USE EFFICIENCY (CONSERVATION)AGRICULTURAL WATER USE EFFICIENCY (CONSERVATION)

INDUSTRIAL PRETREATMENTINDUSTRIAL PRETREATMENT

AIR QUALITY / TRANSPORTATION SYSTEMSAIR QUALITY / TRANSPORTATION SYSTEMS

CLEAN ENERGYCLEAN ENERGY

INDUSTRIAL WASTE & SITE REMEDIATION INDUSTRIAL WASTE & SITE REMEDIATION

INDUSTRIAL BY-PRODUCT USE & RECYCLING INDUSTRIAL BY-PRODUCT USE & RECYCLING

MANDATE REVIEW – FIRST STEPMANDATE REVIEW – FIRST STEPNOVEMBER 2000NOVEMBER 2000

1212 Raúl Rodríguez

NADBank PROGRAMSNADBank PROGRAMS

LOANSLOANS & & GUARANTIESGUARANTIES INSTITUTIONAL ADVISORINSTITUTIONAL ADVISOR

MARKET RATE PROGRAMMARKET RATE PROGRAM

LOW INTEREST RATE PROGRAMLOW INTEREST RATE PROGRAM

GRANTSGRANTS BEIF, SWEP & WCIFBEIF, SWEP & WCIF

TECHNICAL ASSISTANCETECHNICAL ASSISTANCE / / TRAININGTRAINING IDP, PDP, UMIIDP, PDP, UMI

1313 Raúl Rodríguez

NADBank PROJECTSNADBank PROJECTSJune 2004June 2004

NADB LOANS & GRANTS (76)

TECHNICAL ASSISTANCE STUDIES (151)

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NADBank PERFORMANCE NADBank PERFORMANCE (MILLIONS OF DOLLARS; CUMULATIVE)(MILLIONS OF DOLLARS; CUMULATIVE)

33%33%53534040NADBank EmployeesNADBank Employees

494%494%487487in 86 communitiesin 86 communities

8282in 39 communitiesin 39 communities

Utility Personnel TrainedUtility Personnel Trained

66%66%154154in 77 communitiesin 77 communities

9393in 64 communitiesin 64 communities

Technical Assistance Technical Assistance ProjectsProjects

- 79%- 79%5 / 15 / 124 / 124 / 1Grant-to-Loan Ratio*Grant-to-Loan Ratio*

159%159%$2,259$2,259$871$871Total Cost of the Total Cost of the Infrastructure ProjectsInfrastructure Projects

147%147%79793232Infrastructure ProjectsInfrastructure Projects

136%136%$680$680$287$287Total Funding ApprovedTotal Funding Approved

IncreaseIncrease06 / 200406 / 200412 / 200012 / 2000

* Water Conservation Investment Fund financing not included.

1515 Raúl Rodríguez

RATE33%

MANDATE EXPANSION

2%

MISCELLANEOUS11%

SOLID WASTE5%

FINANCIAL ANALYSIS

6%

BILLING7%

MIS7%

LINE SURVEYS8%

USER REGISTRIES

9%MANAGEMENT

12%

TECHNICAL ASSISTANCEMARCH 2004

UMIUMI: TRAINING IN MANAGEMENT & FINANCE : TRAINING IN MANAGEMENT & FINANCE

487 487 PARTICIPANTS FROM PARTICIPANTS FROM 91 91 COMMUNITIESCOMMUNITIES

151 151 STUDIES IN STUDIES IN 77 77 COMMUNITIESCOMMUNITIES

113 113 STUDIES COMPLETED, STUDIES COMPLETED, 38 38 IN PROGRESSIN PROGRESS

MONITOREDMONITORED BY TEJEDA CENTER BY TEJEDA CENTER

1616 Raúl Rodríguez

SECOND STEP: MONTERREY PROPOSALSSECOND STEP: MONTERREY PROPOSALSFOX - BUSH MEETING ON 3 / 22 / 02FOX - BUSH MEETING ON 3 / 22 / 02

GEOGRAPHIC SCOPE:GEOGRAPHIC SCOPE: 300 KM IN MEXICO300 KM IN MEXICO

ADDITIONALADDITIONAL FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS

STRUCTURE & PROCESS:STRUCTURE & PROCESS:

SINGLE BOARDSINGLE BOARD FOR NADBank & BECC FOR NADBank & BECC

1717 Raúl Rodríguez

NADB JURISDICTIONNADB JURISDICTION

1818 Raúl Rodríguez

NADB JURISDICTIONNADB JURISDICTION(% 0F POPULATION ELIGIBLE)(% 0F POPULATION ELIGIBLE)

0%

20%

40%

60%

80%

100%

BC SON CHIH COAH NL TAMPS

100 km 300 km

1919 Raúl Rodríguez

NADBank NADBank CURRENT KEY CURRENT KEY STRUCTURALSTRUCTURAL TASKS TASKS

PROMOTE FURTHER UTILITY PROMOTE FURTHER UTILITY EFFICIENCY GAINSEFFICIENCY GAINS

HELP CREATE HELP CREATE CREDIT CAPACITYCREDIT CAPACITY

PROMOTE PROMOTE PUBLIC - PRIVATE PARTNERSHIPSPUBLIC - PRIVATE PARTNERSHIPS

LINK LINK CAPITAL MARKETSCAPITAL MARKETS AND PROJECTS AND PROJECTS

HELP FOSTERHELP FOSTER MUNICIPAL / UTILITY REFORMS MUNICIPAL / UTILITY REFORMS

AND…AND… GET MORE $ GET MORE $