Situation and cooperation

Mexico is a country of economic and social contrasts: the regions in the north are relatively wealthy with com­pa­nies producing to global mar­ket stan­dards. The centre is dom­i­nat­ed by the Mexico City conurbation where almost 40 per cent of gross domestic pro­duct is generated. In the south, underdeveloped regions are dominated by great poverty. The indigenous population in partic­u­lar is largely excluded from the country's de­vel­op­ment. The top 10 per cent of the country's earners have at their disposal 35 per cent of the country's annual national income, while the 10 per cent of the population with the lowest income has only 1.6 per cent.

Poverty and structural deficits

Although the Mexican gov­ern­ment has made enor­mous in­roads into pov­erty since the mid-1990s, with spe­cially tar­get­ed so­cial spend­ing, and has managed to reduce the per­cent­age of the population classed as poor from about 70 per cent to un­der 50 per cent, more than 50 million Mexicans still live in pov­er­ty. 19 mil­lion are classed as living in extreme pov­er­ty, and are forced to eke out an existence on less than 1.5 US dollars a day. Many of these people are dependent on welfare benefits.

A lack of training opportunities and investment, and foot-dragging on labour market reforms have led unemployment, especially youth unemployment, to rise again over the last few years. Hundreds of thousands of Mexicans are turning their back on their country and seeking work in the USA.

In 2009, the year the global finance crisis hit, the Mexican eco­no­my contracted by more than 6 per cent, mainly because of its dependence on certain partner countries, above all the USA. About 80 per cent of Mexican exports are destined for the United States, and about 50 per cent of imports come from north of the border. The Mexican government has recognised the problem and established a global network of 15 free trade agreements in recent years. These include agreements with the EU and Japan. It is also a active members of various regional organisations including the new Community of Latin American and Caribbean States (Comunidad de Estados Latinoamericanos y Caribeños, CELAC), which was established following a merger of the Rio Group and the Latin American and Caribbean Summit on Inte­gra­tion and De­vel­op­ment (CALC, Cumbre de América Latina y el Caribe sobre Integración y Desarrollo).

De­vel­op­ment opportunities

Mexico's economy has recovered swiftly from the impacts of the crisis, and in 2010 it grew by 5.5 per cent. Growth rates of between 4 and 5 per cent have been fore­cast for 2011 and 2012. The locomotives of Mexican growth include the export of simple industrial products to the USA, oil exports, motor vehicle exports, remittances from Mexicans living abroad and tourism. Growth potential exists in the construction sector, in power plant manufacture and in environmental and water technology. The expansion of the country's tourism infrastructure too offers major de­vel­op­ment potential.

Germany is one of Mexico's major trading partners. Almost 1,000 German and originally German companies operate in Mexico where they provide over 120,000 jobs.

Pollution and climate change

One of Mexico's major problems is the worsening environmental damage caused by the rapid growth of its population and its industry. The Mexican government has declared environmental protection a matter of national security. Environmental protection and climate change mitigation together form one of the five pillars of the country's national de­vel­op­ment plan. In the field of climate change mitigation Mexico sees itself as a pioneer among the emerg­ing economies. As host of the United Nations Climate Change Conference held in Cancún at the end of 2010, Mexico's negotiating skills did much to keep alive in­ter­na­ti­o­nal efforts to tackle climate change.

In 2009 the Mexican government presented a study on the im­pacts of climate change in Mexico. It comes to the conclusion that the country must urgently take steps to reduce greenhouse gas emissions if it is to limit the environmental and economic damage caused by climate change. The government has adopted a special climate change programme (Programa Especial de Cambio Climá­ti­co 2009-2012). Under the provisions of this programme, Mexico undertakes to realise numerous individual objectives to stem the impacts of climate change.

The challenges posed by the need to protect the environment and mitigate climate change are enormous, however. Factories are often located in the middle of residential districts. Very few of them can boast clean production processes, effluent treatment facilities or filters. Often hazardous wastes are not disposed of correctly. The 20 million or more inhabitants of the Mexico City conurbation in particular suffer from high levels of air pollution, growing mountains of solid waste and contaminated soil and water.

The country does have modern environmental legislation on the statute books, but it is not applied consistently, because the awareness of the problems involved is not yet widespread among the population or within the relevant authorities.

In terms of species diversity, Mexico is ranked fifth in the world. The habitat of much of its flora and fauna is, however, coming increasingly under threat, as urbanisation, extensive agriculture and stock farming and deforestation take their toll. Every year 1.2 per cent of the country's forest cover is lost. Mexico currently has 174 protected areas, which together account for 12 per cent of the surface area of the country. It remains difficult though to ef­fec­tive­ly protect forests and ecosystems and to establish bio­cor­ri­dors. Mexico is one of the countries that are set to be worst hit by climate change. Intact ecosystems can help cushion the im­pacts (e.g. mangrove forests which protect the coastline) and are hugely important for the country’s water reserves.

Corruption and violence in everyday life

The lack of transparency and corruption within the administration and industry make everyday life unnecessary difficult for most Mexicans. Despite the country's progressive transparency legis­lation for the public sector and the establishment of channels to handle citizens' complaints, major shortcomings persist. Trans­pa­ren­cy In­ter­na­ti­o­nal's Corruption Perceptions Index ranked Mexico 98th of 178 countries listed in 2010.

Internal security is the greatest concern for the majority of Mexicans. The "drugs war" between the state security forces and the heavily armed drug cartels cost more than 15,000 lives in 2010 alone, according to official estimates. The situation is further compounded by the rising number of kidnappings, increasing violent crime rates and the infiltration of the country's security forces. The people are not inclined to believe that the Mexican government can resolve these problems at present.

Priority areas of German co­op­er­a­tion with Mexico

Germany traditionally enjoys high regard in Mexico and is ap­pre­ciat­ed as a strategic partner in Europe. At the government ne­go­ti­a­tions held in November 2011, a total of up to 118.1 million euros were pledged for the period 2011/2012, of which up to 22.1 million euros were pledged for Technical Co­op­er­a­tion and up to 96 million euros for Financial Co­op­er­a­tion.

De­vel­op­ment co­op­er­a­tion concentrates on two priority areas:

• Environmental protection and conservation of natural resources

• Renewable energies/energy efficiency.

Handling climate change was agreed as a cross-cutting theme which will be taken into consideration in all joint projects. Mea­sures and investments in this sector are also being sup­port­ed under the Climate and Environmental Protection Initiative of the German government. Germany and Mexico have agreed to build on tripartite co­op­er­a­tion agreements with other Latin Ame­ri­can states, and to implement projects jointly with third countries.

Environmental protection and conservation of natural resources

Environmental protection in the urban industrial sector

Demo­graphic and eco­nom­ic growth in Mexico are ex­ert­ing ever-in­creas­ing pres­sure on the en­vi­ron­ment. Natural re­sour­ces are al­ready over­ex­ploit­ed. Serious prob­lems in­clude the un­con­trol­led dis­pos­al of do­mes­tic re­fuse and ha­zard­ous waste. Only around 50 per cent of waste pro­duced at mu­ni­ci­pal level and ha­zard­ous waste ge­ne­rat­ed by in­dus­try is dis­posed of cor­rect­ly or re­cycled. Mexico City is particularly badly affected by severe air, water and soil pollution.

Within the framework of German de­vel­op­ment co­op­er­a­tion, Me­xi­co is receiving support to help it reduce pollution and cut carbon dioxide emissions. The Programme for Urban Industrial En­vi­ron­men­tal Protection is contributing to sustainable de­vel­op­ment in Mexico and to regional and global climate change mitigation. Special co­op­er­a­tion instruments allow Mexico to disseminate its own experience in the region, thus helping to resolve regional and global problems.

In this priority area German de­vel­op­ment co­op­er­a­tion aims to ensure that national urban industrial environmental protection programmes are effectively implemented and that more attention is paid to ensuring the efficient use of resources, the imperatives of climate change mitigation and adjustment to climate change. Specifically solid waste management is to be improved, con­ta­mi­nat­ed sites rehabilitated, financial services provided for en­vi­ron­ment­ally sound invest­ments, and efforts made to improve the collection and treatment of wastewater.

The de­vel­op­ment of technical capacities and the delivery of ad­vi­so­ry services to the environmental authorities at central, state and municipal levels plays an important part in this. In recent years Technical Co­op­er­a­tion has supported various legislative proposals and policy guidelines to introduce waste management programmes at all levels of the ad­mi­nis­tration. Germany also played a pivotal role in introducing the information system for con­ta­mi­nated sites (Sistema Informático de Sitios Contaminados, SISCO) and the environmental information system (Sistema Na­cio­nal de Indicadores Ambientales, SNIA).

Financial Co­op­er­a­tion is providing small and medium enterprises with a total credit volume of about 30 million euros to enable them to invest in environmentally sound measures. A programme to promote municipal environmental protection primarily by means of investing in upgrading wastewater and solid waste man­age­ment is also being promoted to the tune of up to 90 million euros. Parallel to these programme measures, activities are also con­duct­ed in co­op­er­a­tion with the private sector (public-private partnerships).

Preserving biodiversity

In November 2011 Mexico and Germany agreed to expand co­op­er­a­tion in the field of biodiversity conservation. The aim is to help conserve species diversity and habitats in Mexico, which is classed as one of the planet's "megabiodiverse" states. Support is based on the biodiversity strategy Mexico adopted in the year 2000 (Estrategia Nacional sobre Biodiversidad de México). It pro­vides for four strategic lines of action: 1. Protection and con­ser­vation, 2. Analysis of biodiversity, 3. Knowledge and handling information and 4. Diversification of use. Mexico has also sub­mit­ted an application with specific project ideas to the LifeWeb initiative of the Convention on Biological Diversity (CBD). This is taken by donors as the starting point for engagement.

One challenge in the protection of biodiversity is the need to stem deforestation and to designate additional protected areas, as well as linking individual protected areas with biocorridors. If this is to be achieved the three administrative levels involved (national, state and municipal level authorities) must work to­gether effectively, the private sector must be involved and civil society must do its bit. An environmental awareness will also have to be instilled in the Mexican people.

Another challenge is to put into practice the provisions of the Convention on Biological Diversity (CBD) and the Nagoya Protocol, which provides, for instance, for benefit sharing when genetic resources are used (access and benefit sharing). Germany will support Mexico in this.

The German Federal Ministry for the Environment, Nature Con­ser­va­tion and Nuclear Safety is also supporting Mexico in the en­vi­ron­mental sector under the auspices of its In­ter­na­ti­o­nal Climate Initiative (ICI), with a special focus on climate change mitigation measures. BMZ and BMU coordinate their activities to ensure that they complement one another as effectively as possible.

Renewable energies/energy efficiency

Mexico generates most of its power from fossil fuels, although the country's size and favourable climatic conditions means that it has great potential for the wide-scale use of renewable ener­gies. As yet, however, little of this potential is being harnessed, like the potential to boost energy efficiency. This is mainly because of the lack of competition in the energy sector and the lack of any clear and reliable framework. The act of parliament adopted at the end of 2008 that is designed to boost energy efficiency and foster the use of renewables is an important step towards putting in place a more sustainable energy system.

Within the scope of the Sustainable Energy Programme, Germany is helping Mexico's efforts in this field. The Mexican institutions responsible are to promote the de­vel­op­ment of markets for re­new­able energies more effectively. In order to achieve this goal and stimulate the sustainable use of renewable energies, ad­vi­so­ry services are being provided to key actors in the public sector, particularly at national level, and in the private sector.

The priorities for advisory work include policy and strategy de­vel­op­ment, putting in place an enabling legal environment and designing and realising promotion programmes. To give but one example here, the Mexican energy efficiency agency CONUEE (Comisión Nacional para el Uso Eficiente de la Energía) is re­ceiv­ing support to help it implement a nationwide programme to encourage wider use of solar collectors to heat water (Procalsol). This programme aims to achieve a fourfold increase in the total collector area installed in Mexico by the year 2012.

The programme "25,000 solar roofs for Mexico", financed by the German Federal Environment Ministry's In­ter­na­ti­o­nal Climate Pro­tec­tion Initiative and implemented by GIZ in close co­op­er­a­tion with the Mexican savings bank Infonavit, is also helping achieve this goal. It assists low-income families, who would other­wise have no access to sustainable environmental technologies.

To boost energy efficiency, a programme has been agreed in co­op­er­a­tion with the national de­vel­op­ment bank NAFIN (Nacional Financiera), which Germany is supporting to the tune of up to 50 million euros through Financial Co­op­er­a­tion. It offers low-income families subsidies and attractive terms on loans if they trade in their old fridges and air-conditioning units and replace them with energy-saving appliances, to give but one example of programme activities.

Tripartite co­op­er­a­tion

Germany and Mexico have agreed to make their experience in co­op­er­a­tion available to other Latin American countries in the form of tripartite co­op­er­a­tion arrangements and to implement joint projects and programmes with third countries. In this way, fi­nan­cial resources and know-how are pooled in order to solve prob­lems in the region, thus benefiting all cooperating parties. For instance, with support from Germany, Mexican experts set up a network of environmental consultants for the waste management sector in Guatemala.

This model of help towards self-help has met with great interest. Similar agreements have already been entered into with Ecuador and the Dominican Republic and were implemented in 2008. Me­xi­co has been able to contribute the experience it has gained in tri­partite co­op­er­a­tion to the work of the Latin American Network for the Prevention and Management of Contaminated Sites (Red La­ti­no­americana de Prevención y Gestión de Sitios Con­ta­mi­nados, ReLASC).

Within the framework of another tripartite co­op­er­a­tion ar­range­ment Mexico and Germany are also helping Bolivia to enhance its water supply and wastewater disposal system.

Further tripartite co­op­er­a­tion arrangements with Brazil, Bolivia and Peru focus on technologies to measure natural gas reserves while arrangements with Paraguay and Ecuador look at quality infrastructure and metrology.