Mexico Announces $20 Billion in Foreign Investment
Mexico City, Mexico — Mexican officials announced on Tuesday a pledge of $20 billion in foreign direct investment (FDI) from various international firms, but much of this investment is mired in uncertainty and is not as new as it appears.
Economy Secretary Marcelo Ebrard touted a series of major projects, including a $15 billion investment from Mexico Pacific LLC for a liquefied natural gas (LNG) terminal on the Gulf of California, aimed at importing U.S. natural gas, liquefying it, and shipping it primarily to customers in Asia. Ebrard described the terminal project as “the largest foreign direct investment to date,” but it has been in development since at least 2020 and is contingent upon the approval of necessary cross-border gas pipelines.
In addition to the LNG project, Ebrard reported a $6 billion commitment from Amazon, though he did not specify the details. However, Amazon Web Services had previously announced plans for over $5 billion in investments to build cloud-computing infrastructure in Mexico.
Royal Caribbean also made headlines with a $1.5 billion pledge for a cruise ship facility in Mahahual, a coastal resort area south of Tulum, where the cruise line plans to develop a second “Perfect Day” facility. While this investment is positioned as a boon for local tourism, it raises questions about the sustainability of relying heavily on the tourism sector.
Despite these significant announcements, investor confidence in Mexico has been shaken in recent months, largely due to controversial reforms impacting the energy sector and the judiciary. Concerns have escalated following a reform passed in September, which mandates that all judges, including those in the Supreme Court, stand for election. Critics fear this will politicize the judiciary, putting foreign firms at a disadvantage as they lack a vote in elections and may face rulings influenced by popular sentiment rather than legal principles.
The aftermath of former President Andrés Manuel López Obrador’s administration also continues to loom large over foreign investments. López Obrador implemented policies that prioritized state-owned enterprises in the energy market, placing foreign-owned power generation plants at a disadvantage. Many investors are still wary of the implications of these policies, which could potentially repeat under the current administration led by President Claudia Sheinbaum.
Ebrard expressed optimism, stating that together with other projects, total investments could reach as much as $30 billion by 2025. “The message from President Claudia Sheinbaum is one of certainty and assurance that investments in Mexico are safe,” he declared during the announcement.
However, the government faces a formidable task ahead: restoring the trust of foreign investors who have expressed concerns about the shifting regulatory landscape. As Mexico seeks to regain its footing as an attractive destination for foreign investment, clarity and consistency in policy will be crucial to rebuilding confidence and ensuring the promised investments materialize.