Mexico: Advising on a Green Recovery Approach
As part of the Economic Advisory Initiative of the NDC Partnership, Diego Castañeda Garza advised the Ministry of Finance in Mexico.
What are the most urgent challenges in Mexico, and what are the government’s priorities for a green economic recovery?
Mexico has many challenges ranging from security to economic growth and poverty reduction. However, the pandemic has made several challenges stand out that need to be addressed urgently. One of those challenges is the healthcare system; the pandemic has shown its lack of resources and often the poor quality of services. Another one is economic growth. The Mexican economy was hit badly by the pandemic. It declined 8.2% during 2020. It could not rebound in 2021 therefore; the economy is still lagging behind 2019 levels. Different forecasts estimate a full recovery for 2023. This issue is reflected in a rising number of people in poverty, especially women who are the most affected population.
The concept of green recovery and the accompanying policies are not yet integrated into all sectors of the Mexican government. Obstacles such as few fiscal resources and the priority given to prior projects leave limited room for exploring green recovery policies. However, the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público – SHCP) has made a promising start, finding new ways to finance projects aligned with the sustainable development goals.
How important is the green recovery approach for the Mexican government?
Our consultancy worked closely with the SHCP, not with the whole government; therefore, it is difficult to speak to the position of the entire government. However, there is no single approach to a green recovery within the government, as mentioned before. The SHCP is moving its capabilities to push for greener projects. SHCP has a strong commitment to mobilise resources for sustainable projects, for example its award winning sustainable bond strategy.
You have supported the Ministry of Finance and Public Credit from June to December 2021. What was your role, and what did your day-to-day work entail?
My day-to-day work required me to coordinate my team to develop a series of micro-simulations for a variety of best practice economic policies focusing on women and green recovery. The simulations required us to analyse the best practices in countries of a similar level of development, determine the gold standard or benchmark for the policy and then devise its possible effects and the possible obstacles to its implementation. It also required a regular dialogue with the colleagues from SHCP and GIZ to ensure quality control and to tailor our recommendations to the ministry’s needs.
What experiences have you had in your advisory work in Mexico?
It was a great experience. My team and I learned a lot from both the SHCP and GIZ. We discovered that the SHCP was already doing several things we thought to recommend. We also learned a lot from the different areas of the ministry and their needs.
What lessons learned could you pass on to practitioners who want to make green recovery a reality?
I think three lessons are key:
First, it is essential to work closely with the interested parties, either NGO’s or government agencies. They tend to have on the ground knowledge, know both the political and bureaucratic processes and have a deep understanding of their capabilities.
Secondly, green recovery is a vast subject that encompasses many activities in different sectors. Therefore, it is paramount to identify special areas of interest and know where you can focus recourses to have an impact. If you try to solve everything, you might run the risk of not solving anything.
And third, have fun! The field of development is extremely rewarding. Public policy does not need to be dull and grey. Working with different actors who have a positive attitude for learning will make work easier and enhance the results.
Diego, thank you very much for these insights into your work for the Economic Advisory Initiative!
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The interview partner
Diego Castañeda Garza is a PhD candidate at the department of Economic History at Uppsala University. In the public sector, Diego has been an economic advisor in the Mexican Senate of the Republic and the Chamber of Deputies, and in the private sector a financial executive in the oil & gas industry. He also has experience as a consultant for UNDP and other international organizations.
The Economic Advisory Initiative
By financing economic advisors, IKI is providing support to its partner countries during the coronavirus crisis as they work to combine economic recovery goals with climate and biodiversity targets.