Venezuelan economist Miguel Ángel Santos, Dean of the School of Government and Public Transformation of the Tecnológico de Monterrey, at the Center’s facilities on June 19, 2023. Aggi Garduño
Miguel Ángel Santos (Valencia, Venezuela, 1970) seems at ease as he takes a seat in a meeting room at the Tecnológico de Monterrey (TEC) at one of its campuses in Mexico City. According to the ranking of the company Quacquarelli Symonds, the university is the fourth best in Latin America and has a top school. This is the film that Santos directed as of May. Six governors have graduated from the TEC’s School of Government and Public Transformation, and it is a hotbed for officials at all levels of government. Its former dean, Alejandro Poiré, was also interior minister.
After seven years as Associate Professor and Director of Applied Research at the Kennedy School’s Growth Lab initiative at Harvard University, Santos came to Mexico to internationalize the school and take it to a new level. “The goal is to be the best school for public politics in Spanish,” he told EL PAÍS in an interview, “that includes Spain.” His home before arriving in the Mexican capital was Barcelona, where his family is still alive. There is an effortless confidence and calm in his tone that belies the magnitude of his ambition. He is more emphatic and emotional when speaking about his native Venezuela, a country he recently visited after being absent for six years and finding the economy in dire straits.
Santos talks about the ups and downs of Latin Americans. His vision is knowledge generation and agglomeration as an antidote to economies dependent on volatile commodities. “The fate of the region still depends to a large extent on the fate of natural resources, and as long as this is the case political unrest will follow,” says the scientist.
Questions. How do you feel when you arrive at the Tecnológico de Monterrey (TEC) and what are your plans?
Answer. I feel very good because it seems like a big challenge to me. What drew me to the TEC was the ambition of its rector and executive president, David Garza. They are people who want to do things well and to the fullest. When I first started thinking about the possibility of coming, one of the things that attracted me was the opportunity to create the best school here at TEC to learn public policy in Spanish. The best. If you ask anyone where the best place to find out about public policy is the Tecnológico de Monterrey. This includes Spain. This means that we are working on the internationalization of the school. We make efforts such as registering on the forums where the world’s major government schools meet to engage with them more. An attempt to internationalize our faculty. We already have a number of great teachers and now we have some vacancies. I would like to direct these vacancies to attract professors from other parts of Latin America who have done public policy in other countries and who can share these experiences with students. And the final step in this process is to have a student base that is also international, so that some can learn from the experiences of others. Part of the key learning that comes from the major government schools is sitting down with people who have faced these issues in another country and understanding how they were solved, or building a network of contacts to help to call them and ask how they solved such a problem in their country. .
Q Internationalization but with classes in Spanish, right?
R One hundred percent. We may bring a specific professor with some expertise to teach an elective in English and students may enroll voluntarily, but the goal is to be the best public policy school in Spanish. That this is the place par excellence, for its teachers, for its subjects and also because they are taught in Spanish.
Q Speaking of public politics, how do you see Mexico?
R Everything I say has to be justified by the fact that I’ve only been here since April 2nd. Some measures have been taken that make our task as a state school more difficult. For example, when I was at Harvard, a salary cap was imposed on employees in the Mexican public sector, where there were many students who had attended the Kennedy School. They immediately dropped out and we started getting their resumes. I have interacted from Harvard with officials from the Mexican Civil Service, the Treasury Department, and the Mexican Social Security Institute, and they were an exceptional elite of civil servants. I guess it still is because I haven’t had direct contact in a while, but this measure is definitely impacting students’ desire to be better trained to advance into positions in the public sector and also in importance and to gain compensation. This is a complicated element. Our Latin American countries are like that. What doesn’t happen is that they all rise or fall at the same time. Part of this internationalization measure that I have commented on is aimed precisely at isolating the school a little from the ups and downs that all our countries, including Mexico, can experience. If we manage to reach those who are interested in a better understanding of government and public policy in the rest of the world, I think our demand and the number of students interested in us will stabilize somewhat. Because something like this has happened on other occasions. Not only from the point of view of learning and teaching, but also from the point of view of stability, I think it is important that we have a diversified portfolio of students.
Q I’ve always wondered why Latin American countries are like this. Why so little continuity, why does so much change with every government?
R It’s a valid question and I don’t have an answer. I have my own impression having worked in the region for a long time. Most of our countries, including Chile for example, generate more than two thirds of their exports from primary products or natural resources. As a result, when natural resources are doing well, governments tend to be more euphoric than the commodity boom itself, spending more and creating imbalances because natural resource prices later fall, which in turn is cyclical. When natural resource prices are high, there is a lot of money to spend. But not only that: People want to give you credit, the banks want to give you credit because you have money and then you borrow too much. Poverty tends to decrease, consumer ability tends to improve. When natural resource prices fall, nobody wants to lend you money because that’s the way finance is and you’re forced to cut back on spending when you shouldn’t. This is leading firstly to phenomenal political discontent and secondly to a political shift towards someone having to deal with the imbalances created by the government that has just left. You choose the new to get out of this dissatisfaction as a way out. That’s what creates these fluctuations. That the fate of the region still depends in large part on the fate of natural resources, and as long as that is the case and natural resource prices are volatile, it will bring political volatility that makes us extraordinarily pro-cyclical.
Q I think that there is a desire, especially among the younger generations in Latin America, to move away from the extractive economic model of natural resources. I don’t know if we’re close or if we’re ready to switch to a model that isn’t as extractive.
R. It is because this was not given voluntarily, but through consistency and availability. All countries want to develop a knowledge base that will enable a range of diverse industries that are not dependent on natural resources. The question is how does this agglomeration come about? I think that with the energy transition, some countries will be forced to move a little faster. A lot of the work we’ve done in the growth lab is analyzing countries, states or cities, figuring out what they can do today, and figuring out what they could learn with the same production capabilities in a relatively short amount of time. . It’s a task that very few people have thought about, as its outcome is uncertain. If I tell you my state is lacking a bridge and you give me the resources, I will go and build the bridge. The uncertainty in this regard is not very great. You go there too, cut the tape and take a picture on the bridge. If I tell you that there is a lack, that the pooling of knowledge is very weak and that it is therefore not possible to produce products with higher added value that enable higher salaries, we would have to ask ourselves which industries could be here, where are the players in these industries and what they would need to come. The results of this process are highly uncertain. That’s why it’s legitimate for some politicians to think about whether that’s what they want or whether they’re concentrating on something that can have a more direct impact. I think that’s why nobody wants to look at it when it’s doing well, because you’re doing well and you have a lot of money to spend. And if something goes wrong, you have many other priorities. What we may need is some more stability in public policy and that there are not so many ups and downs in implementation because what I have just described takes time to mature.
Q In Mexico, the relocation of North American companies from Asia to countries allied with the USA, so-called nearshoring, is in vogue. What do you think of this trend?
R The key question that should be asked about nearshoring is: what is the productive ecosystem of these industries that have the potential to relocate, and in which parts of Mexico is this productive ecosystem located? The risk that the answer lies in northern Mexico is very high since that is where the great concentrations of knowledge are to be found. One thing that worries me is that if that is the case and nearshoring moves to where the productive ecosystem is, the income gap between the North and the South will spontaneously widen. If certain means of production are plentiful in southern Mexico, and some of these industries might eventually settle there, they will not do so spontaneously. They don’t know the place, there are no other industries there, the productive ecosystem doesn’t exist. These problems are usually not solved by the market. There has to be someone actively thinking about what kind of business models can be drawn to southern Mexico because there are many things there that are not found elsewhere. Cheap labor is one of them, for example. And in what kind of business model can they be brought to other regions of Mexico so that this is planned and thought through in a coordinated manner?
Q This should be done by governments.
R Exactly, because the country is too big for this to be done from the center in a planned manner. Many people speak of the need for public-private coordination. I have also learned that public coordination is sometimes what matters most, as different public administrations usually act in an uncoordinated manner. Either because they pursue different political goals, because they belong to different parties or because they have different ideologies. But what we are talking about definitely requires coordinated action from different levels of public administration.
Q Let’s turn to the subject of Venezuela. The economy is said to be doing better since the liberalization of dollarization and the easing of some policies. Do you agree with this analysis?
R I recently had the opportunity to return to Venezuela after six years and tried to understand this phenomenon. It is important to note first that if we call Venezuela’s economy 100 in 2012, it has reached 25 in 2021. That means the Venezuelan economy, measured by per capita income, lost three quarters in eight years between 2013 and 2021, the largest economic meltdown in history since World War II without a civil war. In fact, a kind of recovery has taken place. The government has allowed the dollar to circulate freely, which does not mean that the economy has been dollarized. Public employees receive their salaries in local currency, but the dollar circulates elsewhere. This has led to an increase in inequality, which we cannot include in the statistics because the government stopped household surveys a long time ago. What I can tell you is that the recovery that has given the Venezuelan economy could have boosted it from 25 to 30. Today the economy has definitely grown in the last two years, I think that’s an undeniable fact. In Venezuela I have visited several popular circuits and people’s opinion is that their situation has definitely improved compared to last year, but it is still an extremely precarious situation. To understand Venezuela, you have to detach yourself from the oneliners, from those who give you only one message. It’s a very complex country.
Q Could it be that the recovery is the start of more sustainable growth?
R My impression is that the recovery would not last very long as the change is de facto and not de jure. What does that mean? That all of the laws that this government passed between 2000 and 2003 that effectively dismantled the market economy are still in effect. The law of maximum profit, maximum prices, price controls and exchange controls are still in effect. The kind of investments Venezuela needs to restore its quality of life, to restore three-quarters of the economy it has lost in eight years, are not reaching a de facto country but a de jure country. He comes to a country where there is a transparent legal framework, where there is a lack of trust in the institutions, and that is far from the case in Venezuela.
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