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MEXICO COUNTRY STRATEGY UPDATE 1.

Period of coverage The Country Strategy with Mexico covered the period 2002-2006 (document GN-2181-1) and was updated in 2008 through document GN-2477. The Bank is in the process of preparing a new Country Strategy with Mexico, which will be presented to the Programming Committee in September 2010 for consideration. The present CS Update covers the period January 2009 to September 2010.

2.

Approvals during the effective period of the CS Update and their consistency with the areas of the CS The 2002-2006 Country Strategy with Mexico calls for actions in four areas: (i) social sector and poverty reduction; (ii) integration; (iii) modernization of the State and decentralization; and (iv) eliminating barriers to the competitiveness of the private sector. The operations approved during the period of the CS Update were consistent with the aforementioned priority areas and/or with the 2008 update. With respect to said update, two operations, Climate Change I and II, were approved in 2008 and 2009, respectively. The objective was to consolidate the institutional and operational framework underpinning Mexico’s climate change agenda, mainstreaming climate change considerations in public policy, as well as spur the implementation of tools and instruments necessary to implement the climate change mitigation and adaptation agenda based on an operational framework. See breakdown in Annex I.4.

3.

New sector and rationale Strengthening public finances: The objective is to strengthen the sustainability of fiscal policy in Mexico, guaranteeing macroeconomic and financial stability and improving efficiency and transparency in the use of financial resources from the federal government, with emphasis on increasing quality in fiscal and budget management and making tax administration more efficient.

4.

Financial scenario The Government of Mexico has requested from the Bank a program of SG operations for 2010 in the amount of US$4.5 billion. However, that level of approvals is restricted by the current financial capacity of the Bank.4 For the same

4

According to document GN-2442, Mexico received an initial allocation for disbursements in 2010 of US$1.5 billion for its SG operations and therefore its approvals level is being adjusted to adhere to that limit.


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period, approvals of NSG operations are estimated at US$110 million and nonreimbursable operations at approximately US$15.6 million. 5.

Country systems Throughout the period of the CS Update, the IDB, the Civil Service Department (SFP) of the federal government, and other Mexican executing agencies have moved forward with implementation of concrete targets for increasing the use of country systems. Based on the 2007 OECD/DAC evaluation, the Country Procurement Assessment Report approved in 2008, the five harmonized bidding documents updated in 2009, and the study of a Consulting Industry Action Agenda in 2010, Mexico is taking steps to gradually strengthen its procurement systems. This is in line with the trend in other middle-income countries and is consistent with the Bank's procurement policies, thereby facilitating the execution of resources within a framework of efficiency and transparency. Similarly, Mexico has made headway on financial administration considerations, implementing in 2010 the Integral Accounting and Budget System. The main challenges moving forward regarding financial administration and control are related to the potential use of the reports from Mexico's Superior Audit Office as a complement to the external audit of the project and the executing agency. In 2010 there are plans to continue harmonization on fiduciary considerations with the World Bank and to jointly review the eligibility criteria and processes for external auditors used by the Civil Service Department to audit projects financed by both Banks. With respect to the analysis of environmental and social systems, the existing legislation and institutional gains made by Mexico show signs of significant progress in recent years. Nonetheless, the IDB's experience in Mexico and elsewhere in the region shows that, to promote the use of country environmental systems, an analytic approach should be taken that evaluates both the legal regulations and their implementation in the country strategy's priority sectors. This analysis should evaluate both the strengths and weaknesses of the regulations and actions with which the Bank can support the country in strengthening the institutions responsible for their enforcement at the federal, state, and municipal levels.


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ANNEX I: OPERATIONS APPROVED DURING THE EFFECTIVE PERIOD OF THE CS UPDATE (As of 31 March 2010)


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4. MEXICO

Loans Project number

Loan number

Operation name

Date approved

Amount approved (US$)

Elimination of barriers to private sector competitiveness ME-L1065

2173/OC-ME

Global Credit Program for the Development of Debt Markets II

7 Aug 2009

500,000,000

ME-L1041

2181/OC-ME

Direct Support to Rural Areas

9 Sep 2009

750,000,000

ME-L1051

2226/OC-ME

Program to Promote the Development of SME Suppliers and Contractors for the National Oil Industry

11 Nov 2009

301,000,000

21 May 2009

600,000,000

29 Jul 2009

100,000,000

28 Oct 2009

150,000,000

13 Jan 2010

100,000,000

16 Sep 2009

400,000,000

Social sector and poverty reduction ME-L1067

2140/OC-ME

ME-L1039

2167/OC-ME

ME-L1084

2219/OC-ME

ME-L1033

2285/OC-ME

Second Project to Strengthen the Oportunidades Human Development Program Skills-based Human Resource Development Program (PROFORHCOM II) Complementary Loan, Training and Employment Support Program (PACE) Phase II Community Education Program - Phase II: Social Equity Builders

Climate change ME-L1058

2186/OC-ME

Climate Change II (PBL)

Elimination of barriers to private sector competitiveness ME-L1066

2135/OC-ME-1

Puerta de Hierro Project

6-May-2009

8,000,000

ME-L1066

2135/OC-ME-2

Puerta de Hierro Project

6-May-2009

4,000,000

ME-L1077

2196/OC-ME

BBVA Bancomer S.A. TFFP

14-Aug-2009

50,000,000

ME-L1069

2209A/OC-ME

BBVA Bancomer Green Facility

21-Oct-2009

40,000,000

ME-L1069

2209B/OC-ME

BBVA Bancomer Green Facility (Guarantee)

21-Oct-2009

50,000,000

ME-L1075

2273/OC-ME

Mi Tienda: Rural Supply Network

14-Dec-2009

2,000,000

ME-L1076

2274A/OC-ME

EDF – La Ventosa Wind Power Project

14-Dec-2009

280,000,000

ME-L1068

2275A/OC-ME

Eurus Wind Project

15-Dec-2009

50,000,000

Total

3,385,000,000


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Technical Cooperation Operations Project number

Name of the technical cooperation operation

Date approved

Amount approved (US$)

Elimination of barriers to private sector competitiveness ME-T1125

Study of Best Practices and Implementation Plan for Creating a Selfregulated Securities Market for SMEs in Mexico

08 Jan 2009

121,100

ME-T1136

Support for the Legal and Institutional Strengthening of Credit Bureaus

30 Jul 2009

70,103

ME-T1145

Marketing Agricultural Products and Direct Support to Rural Areas

19 Nov 2009

1,000,000

Modernization of the State and decentralization ME-T1119

Preparation of the State Program of Climate Change Action in Yucatรกn

15 Jan 2009

200,000

ME-T1123

23 Oct 2009

1,000,000

ME-T1124

PRODEV: Support for Implementation of a Results-based Budget System in Yucatรกn Tabasco: Support for Implementation of the Results-based Budget System

03 Dec 2009

1,000,000

ME-T1130

Municipal Cadastral System Strengthening for the "Mejora tu Calle" Program

19 Feb 2009

210,000

ME-T1135

Investment Fund for States and Municipalities

26 Jan 2010

1,500,000

ME-T1138

Baja California: Support for Implementation of the Results-based Budget System

09 Dec 2009

800,000

ME-T1139

Michoacรกn: Support for Implementation of the Results-based Budget System

09 Dec 2009

800,000

ME-T1143

Support for Planning, Design, and Urban and Physical Management of the Municipio of Ciudad Juรกrez

31 Jul 2009

15,000

ME-T1149

Support for the Urban Development of Municipios in Mexico

11 Mar 2010

135,500

ME-T1111

Support Team for Mexico's Climate Change Agenda

09 Apr 2009

450,000

ME-T1069

National Sustainable Energy Program

04 Aug 2009

1,000,000

ME-T1114

Aligning Learning Incentives

16 Jul 2009

1,350,000

ME-T1115

Crisis Management System for the Education Sector

07 Oct 2009

500,000

ME-T1133

CCT Clearinghouse and Capacity Building Initiative

08 Dec 2009

749,991

ME-T1134

Rural and Semi-urban Wireless Connectivity Project

11 May 2009

150,000

ME-T1137

Support to Control the Transmission of the AH1N1 Flu Virus in Mexico

13 Aug 2009

850,000

ME-T1141

Support to Control the Transmission of the AH1N1 Flu Virus in Mexico

13 Aug 2009

150,000

Climate change

Social sector and poverty reduction

Total

12,051.5


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MIF Operations Project number

Operation name

Date approved

Amount approved (US$)

Elimination of barriers to private sector competitiveness ME-M1054

Consolidation of a Network of Indigenous Microenterprises by Strengthening Regional Tourism

15 Jan 2009

149,662

ME-M1041

Model of Public-private Support for Continuing Development of Workers in Growing Investment Markets: Tourism Sector in the Mayan Riviera

18 Feb 2009

1,990,000

ME-M1053

Private Sector Development and Competitiveness

25 May 2009

150,000

Modernization of the State and decentralization ME-M1055

Strengthening of Municipios for the Development of Public-Private Partnership Projects (MuniAPP)

10 Mar 2010

2,030,000

ME-M1057

State of Tabasco: Promotion of Public-Private Partnerships (PIAPPEM)

26 Oct 2009

350,251

Total

4,679,910

mexico: country strategy with the idb (2009-2010)  

this country strategy update covers the period january 2009 to september 2010. the operations approved during this period are consistent wit...

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