OECD Territorial Reviews: Chihuahua, Mexico 2012

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Located at the border with the US, Chihuahua has benefited from FDI and NAFTA. Chihuahua has been one of the richest regions in Mexico and one of the most dynamic in the OECD. However, the region’s FDI-trade link with the USA has also led to some vulnerability to external shocks. The two crises affecting the USA in the past decade affected Chihuahua more than any other state. Despite recent progress in the quality of education, other structural challenges such as lower productivity growth, high inactivity rates and dwindling employment rates have been factors in Chihuahua’s sluggish growth. Chihuahua not only displays large intra-regional and gender inequalities, but also the largest inter-ethnic inequality levels in the country. Chihuahua can gain from a territorial approach to policymaking that integrates sectoral policies, fostering value-added in rural activities, better linking SME-development and FDI-attraction policies, as well as between innovation capacities and applications. The region could also strengthen their recent inclusive governance arrangement with civil society and the private sector.  Growth and development can only be possible if the current challenges in insecurity, water shortage and public finance are addressed.



Tackling Inequality to Foster Growth

This chapter examines the interrelationship between economic and social challenges and the need to address both with regional policies that expressly look for policy complementarities between them. The chapter presents the reader with several dimensions of inequality in Chihuahua: interpersonal, regional, wage, gender and inter-ethnicity. The chapter continues with a section on insecurity trends in Chihuahua and the challenge it represents; the review argues in this chapter that insecurity is one of the systemic challenges of the region and failure to curve down crime will impinge on any economic development strategy. The chapter revises policies at the federal and state levels to reduce inter-personal, regional, ethnic and gender inequality and while recognising the progress made thus far, it argues for an integrated approach to regional policy in which synergies between economic and social policies should be sought. The chapter ends with a discussion on fiscal challenges focusing on tax autonomy, the nature of federal transfers and the need to address recent indebtedness to avoid another systemic challenge.


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