Foreign Affairs Article in Spanish
For those of you who may prefer to read in Spanish, my Foreign Affairs article on Mexico has been translated and appears in the latest issue of Foreign Affairs Latinoamerica, which you can find here.
Swine Flu, the Drug War, and the Mexican State
As if Mexico didn’t have enough problems, it is now the epicenter of the swine flu epidemic. Confirmed cases of the influenza top 300, with 12 officially confirmed deaths. Experts, though, estimate the true number of infections in the thousands. Mexico’s economy – already on the rocks – will now definitively plummet in 2009, leading hundreds of thousands, and perhaps even millions, back into poverty. But there is a silver lining. The Mexican government’s handling of the epidemic should banish any notions of a failed state on our southern border.
While its origin and spread are still quite mysterious, cases of A/H1N1 virus, or swine flu, first appeared in Mexico and the U.S. southwestern border region in late March. Initially diagnosed as a regular flu, laboratory testing confirmed in mid-April that a new hybrid of pig, bird, and human flu virus was spreading rapidly and lethally throughout Mexico, the United States, and now the world.
In addition to the human costs, the flu is expected to hit Mexico’s economy hard. Already reeling from the U.S. and global downturn, GDP is expected to fall at least 5 percent – nearing the declines suffered during the 1995 “Tequila crisis.” Hardest hit is the $11 billion a year tourism industry, which had been holding up despite worries of drug violence. Cruise ships are rerouting away from its ports, only flights out of Mexico are full, and hotel phones ring with cancellations. [ Read More ]
Secretary Clinton, Don’t Forget Immigration
Secretary of State Hillary Clinton’s heads to Mexico today. The main issue on the agenda with Mexican President Felipe Calderon and Foreign Minister Patricia Espinosa will undoubtedly be security. The rising power and violence of Mexico-based drug trafficking organizations (DTOs) covers the front pages of newspapers throughout both countries, and is a priority for policymakers in both capitals. Yet as these two nations focus on their mutual security, the United States should not forget about other bilateral issues – in particular immigration. This is an important topic in and of itself, and perhaps the most important issue on the bilateral agenda for Mexico. But it is also intrinsically related to security. Immigration reform would boost U.S. and Mexican efforts to lessen the reach of the drugs cartels’ on both sides of the border.
The drug cartels’ operations are fueled by one thing: money. This money buys guns, buys people, and buys power. The vast majority of this money – estimated at some $15-20 billion dollars a year – comes from drug sales in the United States. These profits are then sent back to Mexico, and fuel the insecurity and violence. [ Read More ]
Si se puede!: Obama and the Latino Vote
Nearly 10 million Latinos voted last Tuesday, setting a new record. They made up between 8% and 9% of the total vote, slightly more than in 2004. Hispanic votes shares did jump significantly in a few swing states – up 9% in New Mexico, and 5% in both Colorado and Nevada.
Tuesday’s results show that Latinos were crucial in many states that switched from red to blue. In 2004 56% of Florida’s Latinos (639,225) voted for George Bush, propelling him to a 5% (380,978 vote) victory. This time around, 634,500 Latinos—57%—voted for Obama, propelling him to victory with a 2.5% (204,577 votes) margin. Despite the still solid Republican vote of Florida’s Cuban-Americans, the growing non-Cuban Latinos pushed Obama over the top. Latino votes for Obama also exceeded his margin of victory in Colorado and New Mexico. In Nevada and Virginia, Latino votes also played an important, if not decisive, role in moving Nevada and Virginia into the Obama camp. All told, without the Latino vote, Obama would have won 41 fewer electoral college votes. Not a deal breaker, but this demographic helped orchestrate his electoral college landslide last Tuesday.
Nearly one out of every two new Americans is Latino, meaning this demographic could increasingly dominate the future electorate. But to do so, they have to get out the vote. While 10 million voters is a record, it means that nearly 7 million eligible Latino voters didn’t make it to the polls. That places Latino turnout at 58% – below the country’s 62%, and particularly lower than white voters’ 67% . To strengthen their political heft, and shape the issues that matter to them such as education, the cost of living, jobs, health care, and immigration, turnout will have to increase. As Latinos expand to become 30% of our population (expected by 2042) the question will be whether this population resides in the heart, rather than the margins, of American democracy.
Engage the region, Don’t ignore it
The Task Force report co-chairs, Charlene Barshefsky and General James T. Hill, published an editorial yesterday in the Miami Herald. It lays out the main themes of the report, in particular the call to recognize that U.S.-Latin American relations is increasingly about U.S. domestic policy.
U.S.-Latin America Relations: A New Direction for a New Reality
After taking a 3 plus month maternity hiatus, I am back and will be posting regularly again.
To kick things off, here is a link to a new Independent Task Force report from the Council on Foreign Relations, titled U.S.-Latin America Relations: A New Direction for a New Reality. The Council brought together 19 individuals of various interest and expertise under the chairmanship of Charlene Barshefsky and General James T. Hill. As director of the project, I can attest to the long hours of intense and at times spirited discussion among its members.
The group decided that U.S. policy should focus on four critical areas: poverty and inequality, public security, migration, and energy integration. The main recommendations are the following:
Poverty and Inequality:
- U.S. should expand targeted assistance for poverty alleviation and institution building by fully funding the Millennium Challenge Account and developing new initiatives to reach the poor regions of the larger middle income countries. These programs should reflect the priorities of Latin American governments and also involve restructuring and integrating the programs of various U.S. government bureaucracies and multilateral institutions.
- Alongside aid, the United States should approve pending free trade agreements with Colombia and Panama and extend trade preferences to Bolivia and Ecuador to encourage productive relations with these complex countries.
Public Security:
- The United States should assist Latin American countries in strengthening their law enforcement and judicial systems. Only through strong institutions can criminal networks and drug traffickers be controlled in the long term. The United States should also focus more on the demand side of the drug equation, working closely with other large drug consuming nations, specifically those in the European Union.
Migration:
- Push through a comprehensive reform in 2009. This must deal with border security, employer responsibility, some sort of regularization of the 12 million unauthorized workers here today, and a flexible guest worker program to deal with future labor demands.
Energy Security:
- The United States should provide FDI incentives to help build energy infrastructure i the region. It should also sponsor regional and subregional working groups to forward best practices.
Finally, the task force touches briefly on 4 bilateral relations. It recommends deepening U.S. relations with Brazil to promote global trade negotiations and manage energy demands; strengthening cooperation with Mexico to stop narcotics trafficking, increase U.S. investment in energy production, and reform immigration policies; using multilateral institutions to address foreign and domestic policies of Venezuela; and opening informal and formal channels of communication with Cuba, with the eventual goal of lifting the embargo.
Future U.S. Policy Toward Latin America
As the primaries proceed, little attention had been paid to Latin America. Given the de facto integration of the Hemisphere through migration, trade, and other links, it is high time that U.S. foreign policy focus more attention on Latin America.
In this interview I lay out four main areas the next administration should focus on to reframe and redirect policy toward the region. These include: energy, public security, migration, and poverty and inequality. It is a tall order, but any progress on these fronts would be welcome after the recent years of neglect.
Investing Remittances
Much is made in policy circles about the role remittances can play in boosting economic development in Latin America. Proponents point out that the over US$60 billion in remittances that return each year to the region is far higher than foreign aid and often higher than foreign direct investment in a country. Yet so far this money has not greatly affected economic growth or economic opportunities at home. Instead, the vast majority of remittance money goes to consumption. Some believe it actually fuels dependency, as more local community members are incentivized or even have to migrate in order to support their families.
While these monetary flows often do lift recipients out of poverty – providing adequate food, clothing, and shelter – they do little to stimulate local or national economic growth through productive investment. And as private money, unlike foreign aid or even FDI, it has been hard for governments to direct this capital into development-oriented projects. How can governments stimulate investment through public policies without hurting these flows?
So far, governments have focused on reducing the costs of transmitting remittances through formal channels such as banks with quite a lot of success. The costs of transferring money abroad have fallen precipitously, allowing migrants and their families to keep more of the funds earned. Also, migrants and their families are beginning to put funds in local and international banks, leading to more savings and investment capital. But these changes, while beneficial, do not in and of themselves increase investment in productive activities in their home communities. The amounts in individual accounts are small, and still used primarily for consumption by local families. In addition, banks often pool these savings from remittance receiving communities and invest them in larger amounts in more attractive loan markets, such as the capital cities in each country. This limits local economic development in the places most starved for investment capital.
Another set of public policies, prevalent in Mexico, involves matching funds for local community investment. Dubbed “3 for 1†programs, migrant groups pool together funds for infrastructure investments – for instance local roads or schools – and the federal, state, and local governments each match a peso. While helping local communities, the actual size of these programs is quite small, estimated at roughly US$70 million in investment last year. Many also question why migrants are funding 25% of public infrastructure for which the state should ultimately be responsible.
Mexico recently announced another pilot program aimed at directing remittances into rural economic development (Houston Chronicle 12/24/07). Unlike earlier policies, this program targets productive private investment. And, it focuses on agriculture, ensuring that these funds go back to the communities of origin of many migrants. While obviously in the initial phases, this incentive structure is promising. It may actually get at the elusive goal of economic development in the hardest hit areas of the national economy – the areas most likely to send large numbers of migrants abroad. If tied to capacity building and technical assistance programs – either provided by the Mexican government, non-profit organizations, or international aid such as USAID – this type of program could become and important step in promoting economic development, and ultimately providing citizens the choice of staying home.
CFR interview on Mexico’s Merida Initiative
Here is a recent interview I conducted with Bernard Gwertzman at the Council on Foreign Relations:
Migration, Aeromexico style
Flying yesterday from JFK to Mexico City on Aeromexico’s afternoon flight, I sat next to a Mexican man in his late twenties. We started talking when he asked me to translate a few words on the English language customs form that were handed out.
He was returning to Mexico “ to a small town in Morelos “ after almost two years in the New York area. The main reason was to see his family: his wife, children, parents, and other relatives. While he never had working papers, during his two years he held jobs in restaurants, hotels, and most recently in a supermarket. He came to the United States with four friends, easily crossing the border, ending up in Los Vegas, flying to Boston, and then making his way down to New York.
He was both happy and sad about his return: happy to see his family after such a long absence, but also sad to leave the opportunities of the United States. He told me he plans on driving a taxi (his family has an extra car) and perhaps studying to get a certificate to join the municipal police or a private security company. But, if it doesn’t work out, he will migrate again to the United States. His employer at the supermarket told him to hurry back, saying there would always be a position for him. If he does return, it will only be for a limited amount of time again, so he can earn more money to help out his family.
His story is similar to that of so many migrants. He doesn’t want to stay in the United States: his home and family are in small town Mexico. But he also is searching for better economic opportunities to provide for his family. He is engaging, like so many others, in “circular migration,” moving back and forth between Mexico and the United States. Yet with the current U.S. migration system, this behavior is becoming increasingly difficult. With no legal means to come, and the rising costs of illegal crossings, many migrants are returning less often and are even deciding to settle in the United States permanently. But this situation leaves no one happy. For the United States millions of individuals continue working and living in the shadows, and for the Mexicans, they remain far from their home.