Former Mexican President Felipe Calderon *Photo by Kageaki Smith
Former Mexican President Felipe Calderon *Photo by Kageaki Smith

Former Mexican President Felipe Calderon spoke warmly of Bermuda and the needs to strengthen the relationship between Bermuda and his country.

President Calderon also explained how he dug his country out the recession and reduced its public debt.

The 50-year-old was the keynote speaker at the Capital G Private Wealth Conference at the Fairmont Southampton today.

It was attended by the Governor George Fergusson, Finance Minister Bob Richards, Economic Development Minister Grant Gibbons and more than 200 people in the finance sector.

Mr Calderon said in order to survive the recession, he raised taxes, built more schools, established temporary jobs in poor areas of the country, invested in infrastructure and people.

He also said the government cut red tape in many areas and closed a utility company that cost taxpayers $5million per year.

President Calderon said some of the measures were “painful” but necessary.

“Acting responsibly allowed Mexico to weather the global financial storm,” he added.

The speaker said we are in a “time of crisis… The good news is that the crisis also means opportunity for change. The opportunity for those who embrace change.

“Now what can our countries do to transform crisis into opportunity?”

President Calderon then explained the shared actions his administration took to strengthen the Mexican economy and competitiveness in the country.

He said when US imports fell in the beginning of 2009, Mexico took a hit.  

“There were other factors combined to make the situation even worst. Let me tell you some of them. The oil export is just a small portion of our total export in our economy.

“Between 2008 and 2009, Mexico lost more than 2,000 barrels a day in oil production. At the same time world oil prices fell.”

He continued: “Another problem, in April 2009 — the swine flu outbreak.

“You can imagine a deadly virus, previously unknown, whose initial outbreak happened exactly in Mexico City, the largest city in the world.

“And we had an unprecedented increase in [crime] that year as well.

“Mexico started to suffer the worst drought ever that year.

“So in that spring of 2009, it seems to me Mexico had been hit by the perfect storm.

“We had to act and we had to act quickly.”

Among the things President Calderon did were to increase government transfers to the poorest families and established a temporary jobs programme aimed at community workers in the poorest areas of the country.

His government also invested in infrastructure.

“Our financial sector wasn’t part of the problem, it was part of the solution.

“Additionally, the government provided credit guarantees so the flow of bank credit never stopped in those banks.

“Other measures; to protect export-oriented jobs, we reached an agreement with unions and companies.

“Particularly those sectors most affected by the recession in the United States.

So under that agreement, workers, some of them, not all, accepted a pay cut.”

He continued: “Companies accepted to pay workers a part of their salary instead of firing them and the government paid the workers part of their salaries for three to six months.

“We were able to save at least half a million jobs in export related industry.”

President Calderon explained how “tough” the decisions were.

“We made very difficult decisions, very tough political decisions, at least from a political point of view.

“For instance, increasing taxes; we increased VAT. We increased income tax as well.

“We reduced spending. We closed a closed a large highly inefficient utility that saved taxpayers $5 billion a year.”

In addition, his government established a pay programme for workers of the utility plant, created universal health coverage, built new schools and universities and created new hospitals.

President Calderon admits some of the decisions had a political cost.

“But I’m absolutely sure that being responsible allowed Mexico to weather the global financial storm and the figures speak for themselves.”

He predicts the Mexican economy will be between the 5th and 7th largest economy in the world by the year 2050 and “one of the most important markets in the future”.

“I’m very sure that if Mexico perseveres with its reforms, in particular to the legal system, which began during my administration then the country’s future is assured.

“If it doesn’t it could slide back to the past.”

Speaking on Bermuda, President Calderon said: “We do not have not enough information about Bermuda.

“The relationship has potential but we don't realize how magic this country is, in particular in finance.

‘The opportunities are there, but we need to provide a little more effort to strengthen the relationship.”

On tourism, President Calderon said: “There is a very important market for tourists in our country.

“We receive 24 million tourists every year. Of course the Mexicans are starting to be good tourists as well.

“A lot of Mexicans go to the United States. If Mexicans realized they can come to Bermuda, I think it’s a question of information and promotion. We need to strengthen the relationship.”