“Iran and Mexico’s Emerging Economies Can Cooperate with Each Other,” States Mexican Secretary of Labor

Following the economic reformations in Mexico, this Latin American country has changed the architecture of its economy from agricultural to productive. Furthermore, Mexico’s geography is what enables it to play a highlighted role in trades on both ends of the Pacific Ocean, which is a dynamic trade route. If Mexico can improve its institutional structures and make good use of its geographical position, one could expect for the Mexican people and investors to be considerably benefited by it economic growth. To study the development trend of Mexico’s economy and also the trade ties between Tehran and Mexico City, we held an interview with Mexico’s Secretary of Labor, Alfonso Navarrete Prida, which is as follows.

 AVA Diplomatic’s Exclusive Interview with

Alfonso Navarrete Prida, Secretary of Labor of Mexico

Interview by Mohammadreza Nazari

You are the highest-ranking Mexican official who is on a visit to Iran in decades. What are your plans to reinvigorate the bilateral ties between Iran and Mexico?

It has been, in fact, after 23 years that a Mexican official traveled to Iran. The last trip was that of Mr. Fernando Solana Morales, then Mexican FM which took place in 1992. Therefore, this trip is quite an opportunity to flourish the ties between the two countries.

The lift-off of sanctions against Iran, however, has fecundated the grounds for cooperation between the two countries, especially given the rich history in which they share similarities in terms of culture, and that is how they can have fruitful collaborations.

Considering the vast geographic distance that there is between Iran and Mexico, can they make any cooperative project work out together in the Middle East?

I believe that in today’s global world, geographic distance is relative. The Iranian government is quite stable in the region and is viewed as a democratic and powerful institution in the Middle East. It has been managing to sail past the sanction era successfully. In such a situation, emerging economies such as Mexico and Iran can work cooperatively in many dimensions, especially culture, economy, trade and investment.

According to the statement of the President of Mexico, Mexico intends to play a highlighted role in the Middle East. Are there specific plans for developing relations with Iran?

The President of Mexico, Enrique Peña Nieto, is a transformative president able to achieve consensus among various political forces. He introduced 13 major reforms to the general constitution of the republic that gave a new look to the country. Mexico is an international player with global responsibilities. In this region we look forward consolidating friendly ties with brother countries such as Iran.

As a matter of fact, Mexico is after extending its relations with Iran in the fields of training specialists, joint assessment of long-term and mid-term pension funds, and boosting agricultural trade and agribusiness. It should be noted, of course, that the educated population in Iran can be supplementary to the skilled work force in Mexico.

What measures are to be taken to increase the agricultural collaborations between the two countries?

Iran has all kinds of fruit for its climate. Mexico also has a great wealth of commodities to trade with Iran. In Iran, there are new agricultural technologies such as sterilizing equipment of agricultural products and new technologies for plantation which hugely attract Mexico’s attention and we would like to exchange experiences with Iran in this field.

Mexico is currently one of the world’s largest oil-exporting countries. Mexico’s rate equals approximately all the oil export of Latin America together. Due to falling oil prices, how this effect Mexico´s Economy?

Mexico is a country with high proven and probable reserves of oil and a major oil producing country. Iran alike, is a country of high oil reserves and major oil producer that after the thawing in various areas and sectors will surely regain the capacity to produce and export oil.  I am sure both countries share the same interest and at some point they will contribute to stabilize the prices of oil looking forward a dialogue with other oil-producers such as OPEC and the rest of the Arab countries. Stabilizing the market and making this important industry serve both countries, would really be a lever for development.

Considering that you are the Secretary of Labor and one of your main responsibilities is to create jobs, how has this price drop affected the Mexican economy?

The impacts of the global drop in the price of oil are varied. Of its serious effects, we can refer to the severe adjustment in public finances of the government of Mexico in non-priority programs. These changes, however, have not influenced the economic and infrastructural developments and the country’s productive agenda. On the other hand the energy reform is one of the 13 constitutional reforms that the President of the Republic achieved. This reform impacts positively on people’s lives. In this dynamic, the gasoline price did not change. Iran, too, has undergone major changes regarding the prices recently.

Regarding the governmental reforms in Mexico, I should say that the prices of gas and electricity have been reduced and even the city phone tariffs are now gone. This has benefited much of the population. Furthermore, Mexico’s oil company is undergoing a process of transformation from a company and its trade union to an industrial union. So it will grow and partner with other players in the oil market. This has been the most noticeable effect up to now.

What is Mexico’s inflation rate after the economic reforms?

Currently, Mexico’s inflation rate stands at 2.6% which is the lowest in the past 45 years. That number actually means having a healthy economy.

How have you been able to keep the inflation rate this low?

That has been made possible by using a responsible financial policy and the fact that the government takes responsibility for public costs.

At a meeting with Iran’s Minister of Labor, you had agreements in terms of exchanging experiences in the field of public services. Could you please tell us more precisely in which aspects these experiences are meant to be exchanged?

In addition to signing a MoU, it was agreed to exchange information on the successful programs of both countries. An example would be the National Employment Service (NES) in Mexico which could create 3.5 million jobs and in this regard, the experiences of the Mexican party in job creation and training on its mechanisms can be shared with Iran. It is also possible to have information exchange in two important areas, human resources training and pension funds.

What areas do these 3.5 million jobs fall into? How long did it take to create them?

It took 3 years and basically it has fallen in the service sector, and in the manufacturing sector attracting investment in the automotive sector, which is a workforce-intensive sector. Also in self-employment with employment formalization which means social security and benefits.

What is the unemployment rate in Mexico?

It is nearly 4% which is one of the lowest unemployment rates in the history of Mexico.

What percentage of this number includes informal employment?

That number does not have much to do with informality, the rate of informal employment in Mexico is 57.5%, which is a very high rate but has declined 3% for the first time in 20 years.

How is Informal Labor defined in Mexico?

Those who have no social security benefits and therefore do not contribute to public finances.

What rough percentage of Mexican workers are not insured?

Of those workers who are now hired, nearly 75% are not insured. During the past years, of course, some 1.7 million were added to the number of those insured in Mexico.

How has the wave of immigrants from villages to cities affected Mexico’s economy?

Mexico drastically developed and thus the rural population has turned urban in a way that 75% of the population now live in cities. Over the past decade, however, immigration to other countries, especially the US, has been on a stable trend which means there are as many people that return to the country as those who leave it.

You were a prosecutor in Mexico and held judicial positions. What measures did you devise and exercise to fight corruption and mafia groups?

I was attorney general both at the Federal and the local level. However, crime and offense are an international subject and international cooperation is needed to solve it. It should be conducted wisely. In my opinion, crimes and offenses should be fought and punishment therefore should not be ignored.

Now that our interview is drawing to an end, would you promise to encourage the President of Mexico to visit Iran?

I will. For the President of Mexico, it would be very interesting to take a trip to Iran. Until then, our ambassador can prepare a specific action plan for that and on that level, the trip could definitely happen. I hope that you publish the photos of this trip soon.