Strengthening the Mexican economy –

WASHINGTON (EFE).— The World Bank (WB) granted a $1 billion loan to help Mexico strengthen its Sustainable Financing and green investment plan and to support strategies to promote the inclusion of women and small and medium-sized businesses in the country.

The package is part of the World Bank’s Sustainable and Inclusive Policy Development Loan and aims to enable Mexico to mobilize private sector financing to modernize its economy, decarbonize it and promote greater participation of disadvantaged groups, while continuing to take advantage of the nearshoring revolution.

“Mexico has made significant strides toward economic sophistication, export expansion and growth of foreign direct investment in recent decades,” the World Bank admitted in a document.

However, according to the note, “the country’s potential to evolve towards a more sustainable and productive economy and alleviate poverty and income disparities remains constrained by limited access to credit and underdeveloped private markets.”

The World Bank believes it is essential to support the decarbonization of the Mexican economy with this loan, while receiving greater investment to bring production chains closer to the United States at the expense of China.

“The urgency of these measures is greater as Mexico experiences a wave of investment opportunities for global value chains and repositioning to a closer demand or ‘nearshoring’. This requires strengthening environmental, social and governance standards to meet the criteria of advanced economies in this regard,” the report states.

The loan will be implemented as part of the Government of Mexico’s plans for a Sustainable Financing Mobilization Strategy and the National Financial Inclusion Policy.

The loan was approved by the World Bank on June 3 and was announced shortly following the electoral victory of the ruling party’s presidential candidate, Claudia Sheinbaum, who is expected to maintain the economic and social policy strategy of the outgoing president, Andrés Manuel López Obrador.

Mexico has overtaken China as the United States’ top trading partner as the U.S. seeks to reduce its supply chain dependence on China, creating new investment opportunities for Mexico known as “nearshoring.”