(To watch the video on Youtube, click here.)

Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.

Republican presidentical candidate Romney speaks as Gingrich listens during the Republican presidential candidates debate in Tampa (Scott Audette/Courtesy Reuters).

During Monday’s Republican presidential debate, Mitt Romney put forth his plan for dealing with illegal immigration: self-deportation. Here is how the exchange went:

Debate Moderator Adam Smith: Governor Romney there’s one thing I am confused about, you say you don’t want to round people up and deport them but you also say that they would have to go back to their home countries, and then apply for citizenship. So if you don’t deport them, how do you send them home?

Governor Romney: Well the answer is self-deportation, which is people decide that they could do better by going home because they can’t find work here because they don’t have legal documentation to allow them to work here.

Will this work? Unlikely. Lessons from Mexican migrants, which comprise more than half of the unauthorized population and, the country closest and presumably the least costly for “self-deportation,” suggest otherwise. Studies show that during the 1970s and early 1980s, roughly one of every two migrants returned home within a year – and seventy-five percent left within two years – meaning most did in fact “self-deport.” The vast majority of Mexicans came not to settle, but to earn enough money to better their and their families’ lives at home. But this pattern – called circular migration by scholars – starting changing in the late 1980s (also when the United States began hardening its southern border). Today, fewer than one in ten immigrants return each year to Mexico. Thirty odd years ago Romney’s policy of self-deportation occurred regularly, today it does not.

Romney says adding stronger enforcement at the workplace (through E-Verify and other mechanisms), would encourage self-deportation again. He explained this part of his strategy:

We have a card that indicates who’s here illegally, and if people are not able to have a card and have that, through an e-verify system determine that they are here illegally then they’re going to find they can’t get work here, and if people can’t get work here they’re going to self-deport to a place where they can get work.

Analyzing migration trends also cast doubt on these expectations. First, while the economic downturn has slowed those coming to the United States from Mexico, it hasn’t done much to send more home. This hints at the underlying reality for millions of America’s undocumented immigrants – they have deep roots in American society that go far beyond their jobs . As spouses, children, siblings, neighbors, customers, homeowners, and worshippers, they are intricately intertwined in America’s social fabric. They won’t voluntarily leave behind their families and their lives. Instead, the only way to change the status quo is through an immigration policy that sees unauthorized migrants for what they really are: an integral part of America’s social fabric.

Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.

A boy from the "Insurgentes de la Paz" (Peace Insurgents) school receives lessons inside an old bus turned into a class room in the settlement of Pueblo Nuevo, Oaxaca (Courtesy Reuters).

It is campaign season in Mexico, and aside from security issues, front-runners Enrique Peña Nieto of the PRI and Andrés Manuel López Obrador of the PRD are focusing on poverty and inequality. Both criticize the past two PAN governments for not improving the lot of Mexico’s poor, and for perpetuating if not exacerbating an uneven playing field that benefits the few and not the many. In a recent campaign stop in the Southern state of Veracruz, Peña Nieto came down hard on the PAN, saying “[the PRI] knows what Mexico hasn’t achieved in the past decade. We haven’t forgotten that more people are poor, that we haven’t had the economic growth that creates jobs that the public demands.”

But recent data from the World Bank and Mexico’s own household survey call these claims into question. Over the past fifteen years, inequality has fallen consistently, and since 1996 Mexico’s Gini coefficient has dropped by nearly one percent each year (reaching pre-1980s crisis levels – 49.8 – in 2006). Poverty is also down slightly, as five million fewer people live on four dollars a day or less in 2010 than in 2005.

A number of factors are behind these trends. First, macroeconomic stability (even with slow growth) has been particularly beneficial for the poor, who, studies show, are hit the hardest by economic crises.  Real wages also improved, due to a mix of broader education and increased worker productivity. Finally, social spending targeting the poor rose. Programs such as Oportunidades (started under President Zedillo as Progresa), give monthly stipends to low income households that keep their kids healthy and in school, and now reach nearly six million families.

Unfortunately, the world financial crisis of 2008 brought this progress to a standstill. In contrast to the rest of Latin America, Mexico has seen an uptick in extreme poverty in its wake, with more families dropping below the poverty line even as the economy recovered in 2010. The big question going forward is whether – and how – Mexico can get back to spreading the gains of strong growth more evenly among the larger population. To make this happen, the next president should learn from the lessons of the last fifteen plus years – and focus on improving education, expanding targeted social programs, and redistributing wealth more generally (for instance through a more progressive tax system). These policies already have and would continue to make a difference in the lives of the many Mexicans that still struggle to make ends meet.

Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.

Venezuela's opposition Democratic Unity coalition potential presidential candidates attend a second debate in Caracas (Jorge Silva/Courtesy Reuters).

Though fewer in number than in 2011, the two Presidential elections on the docket for 2012 will make up for it in terms of their importance in the region.

The first will happen in July in Mexico. Leaders of the Institutional Revolutionary Party (PRI) are already talking about not only winning Los Pinos, the Mexican White House, but taking the “carro completo” – gaining a majority in the House and Senate. Recent trends favor the PRI – they won four out of six governorships in the 2011 midterm elections, now control almost half of the 500 seats in Congress, and have united behind Enrique Peña Nieto, the young, handsome former Governor of the State of Mexico. The National Action Party’s (PAN) close association with rising violence – as Calderón made the war on drug traffickers his signature issue – will likely hurt the incumbent party’s chances, whomever wins their presidential nomination in February. And the Party of the Democratic Revolution’s (PRD) choice of Andrés Manuel López Obrador (AMLO) –who lost to Calderón in 2006 by a razor thin margin (he claims the election was rigged) – suggests this party too is stuck in the last sexenio, which should also benefit an energized PRI.

Though many see the race as locked up, there are still six long months to go. The PAN has yet to choose its hopeful, and current front-runner Josefina Vázquez Mota could shake up the race as the first female presidential candidate from one of the main political parties (and due to her distance from President Calderón). AMLO too has been working to revamp his image away from the combativeness of the last five years, talking to the media about “love and peace,” and saying recently, “I want to be the Mexican Lula,” the market friendly former president of Brazil. His poll numbers have risen, and even some business leaders have switched over to AMLO’s camp. Peña Nieto has stumbled a few times in unscripted moments, for instance when he couldn’t name his favorite books (even as he hawked his own campaign book) at the Guadalajara International Book Fair.  Some wonder if he can hold his own in a debate.

If the PRI does triumph, domestic and international observers alike will be watching to see if Peña Nieto is in fact the epitome of the much heralded and marketed “new PRI” – a modern, democratic, grassroots party — or if he is just a young face for the “old PRI,” one more used to back room deals, corruption, and opaque governance.

Venezuela too heads into Presidential elections in October, with Hugo Chávez now running for his third six-year term. Many things seem the same – already the opposition is denouncing the regime’s electoral machinations (such as moving up the election date from December to October 2012) and repression of anti-Chávez media.

Some things, though, are different, making the elections interesting for observers and for Venezuela’s future. First, the opposition has finally come together [learning its lesson in 2005 when it boycotted  legislative elections and was left out in the cold, allowing Chávez and his United Socialist Party of Venezuela (PSUV) to govern unchallenged]. It will hold a February primary, where voters will choose between six candidates, including front-runners Henrique Capriles Radonski, Governor of Miranda state, and Pablo Pérez, Governor of Zulia state.  This early on, the opposition holds a much stronger position in opinion polls as well. Recently released data place Capriles Radonski just two percentage points below Chávez in the general election.

The biggest difference though is Chávez – and his health. Though he claims to have beaten cancer, others, including his former doctor, believe he may not live more than two years. Worries of succession continue to plague PSUV, as all recognize none can replace the charismatic (if erratic) leader. This 2012 election lead up will be one to watch – for Chávez’s health and his ability to campaign, for ever increasing electoral shenanigans and repressive measures (particularly if the ruling party feels their candidate is flagging, either in his health or the polls), and for the broader actions and reactions of Venezuela’s society, and its international neighbors.

Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.

Customers look at laptops at a Wal-Mart store in Mexico City (Henry Romero/Courtesy Reuters).

Another 2011 trend is the rise of the middle class. While in the United States article after article – as well as the country-wide “Occupy Wall Street” protests — denounced the decline of the middle class, in Latin America the middle continued its gains.  Despite the tougher international climate, economic growth averaged over 4 percent, and unemployment rates fell to 6.8 percent (from 7.3 percent in 2010). Perhaps more important, GINI coefficients –  which measure inequality — lowered slightly to just over 50 (from roughly 53 in 2000). This means that the growth that happened actually spread to the bottom and middle of the pyramid.

There is an ongoing debate about how to measure the global middle class. Some of these issues I addressed in this past post. But whatever the starting point, the 2011 regional trend was positive. In Brazil, the middle topped 100 million, in Mexico it reached 67 million, and in Argentina more than 21 million.

This doesn’t mean Latin American nations don’t continue to struggle with poverty. According to the latest World Bank data, just under 30 percent of the population — 160 million people — lives on less than $4 a day (in PPP terms), and 14 percent — some 80 million — live in abject poverty (on less than $2.50 a day). The growing middle though does show the path forward, and reinforces the goal for those concerned with the less fortunate, helping them too rise the economic ranks into a more comfortable middle.

Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.

Presidents Chavez of Venezuela, Fernandez of Argentina and Rousseff of Brazil chat while posing for a family photo during the CELAC summit in Caracas (Carlos Garcia Rawlins/Courtesy Reuters).

As 2011 comes to an end, I want to reflect on just a few trends affecting the region over the course of the past year. While these developments certainly have long histories, they have all become more noticeable – and noteworthy – in 2011. To keep it interesting, I will be posting one trend a day for the rest of this week, so check back — and let me know what you’d add to the list in the comments or via my twitter account (@latintelligence).

This hasn’t been a good year health-wise for Latin American leaders. Cristina Kirchner’s recent diagnosis of thyroid cancer is just the latest. The most mysterious, and politically game-changing health challenge is that of Hugo Chávez. Officially, Cuban doctors removed a reportedly “aggressive” pelvic tumor in June, and since then he has undergone chemotherapy and steroid treatment. Though he claims to have conquered the disease, others (including his former doctor) say he may not live more than two years.

Last year, Paraguayan President Fernando Lugo was diagnosed with non-Hodgkin’s lymphoma, and spent four months in chemotherapy and in and out of hospitals. According to the most recent tests, his cancer is in remission. In Brazil, President Dilma Rousseff  continues some treatment for lymphatic cancer (discovered during her 2010 presidential campaign) and former President and still political heavyweight Luiz Inácio Lula da Silva has just begun his final round of chemo for throat cancer (diagnosed in October). Pictures of the famously bearded leader now show him hairless, though still beaming. There were also rumors circulating that Evo Morales had a cancerous tumor in his nose, though this was never proven.

This type of illness has idiosyncratic, but nevertheless real effects on politics. It can weaken a politician due to their physical absence from the public limelight as well as political backroom negotiations. Lula’s Worker’s Party (PT) will sorely miss his active leadership, especially in the run up to local elections in 2012. Kirchner is expected to make a quick recovery after surgery, though she will turn power over to her Vice President Amado Boudou (a close political confidant) for three weeks in January. It remains to be seen whether these absences will make a significant mark on either country’s internal politics.

Javier Corrales, a political scientist at Amherst, has written about a different role for illness, and its potential to strengthen rather than diminish the political patient. Calling it “participatory cancer” he chronicles Chávez’s attempts to turn his illness from a disadvantage to an electoral strength. By brandishing cancer and his fight as an electoral gimmick, the Venezuelan leader distracts voters from more serious problems (such as a floundering economy and rising crime).

While continuing to watch the political fallout, let’s hope the new year brings health to all.

Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.

A truck of the Mexican company Olympics bearing Mexican and U.S. flags approaches the border crossing into the U.S., in Laredo (Courtesy Reuters).

It is worth reading the Woodrow Wilson Center Mexico Institute’s new study by Christopher Wilson, entitled “Working Together: Economic Ties between the United States and Mexico.” The report is packed with examples and statistical evidence of the deepening integration between the United States and Mexico since 1993 (the signing of NAFTA), and concisely explains why this relationship is so important and beneficial for the United States.

In terms of trade, for nearly half of U.S. states, Mexico is the number one or number two export destination. For border states such as Texas, New Mexico, and Arizona, up to a third of all exports head to our southern neighbor. But it isn’t just a border issue – export industries in states as far flung as New Hampshire, South Dakota, Nebraska, and Missouri all depend on Mexican industries and consumers. And these are some of the most dynamic trading relations we have. Twenty U.S. states increased exports to Mexico by more than 10 percent each year over the last fifteen years. Investment also flourished. Mexican FDI in the United States, though starting at a low base, increased tenfold over the past two decades.

The report shows that trade with Mexico is particularly beneficial to the United States because these goods incorporate many parts and products produced in the United States. In fact, even though fully counted as imports in official trade data, an estimated 40 percent of the value of Mexican products is actually “made in the USA.” Only Canada comes close to this ratio (25 percent). In stark contrast, only 4 percent of the value of Chinese imports is made on U.S. soil.  This means that products coming from Mexico support homegrown industry and labor. In fact, 6 million American jobs – or 1 out of every 24 – depend on Mexican trade. The study breaks down employment by state – showing for instance that some 200,000 Georgians, 120,000 Indianans, and 100,000 Coloradans owe their jobs to Mexico. Other studies show that export oriented jobs pay more than others, further benefiting U.S. workers. And what is good for Mexico is good for the United States — Mexico’s strong 2011 economic growth should create 150,000 new U.S. jobs.

The report interestingly points out how the United States is now competing with China and others to supply parts and materials used in Mexican production. Here, worryingly, the United States is falling behind – losing market share to its Asian rivals. Part of the problem is the border. Overwhelmed infrastructure, and long and unpredictable wait times at crossings limit competitiveness, costing taxpayers billions in lost revenue and jobs.

There are some signs that these issues are at least appreciated. In 2010 three new border crossings opened, easing congestion along the dense 2,000 mile border, and under its “21st Century Border” project, the Obama administration is working to make commercial and other crossings more efficient and secure. But a conceptual shift is still needed. U.S. politicians, business owners, workers, and the general public need to understand that the path to improving U.S. global competitiveness –defending American industry in the process – runs through, rather than around Mexico (and Canada). Regional integration is vital for U.S. economic recovery and growth going forward.

Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.

Mexican Gov. Enrique Pena Nieto answers reporters' questions at the National Press Club in Washington (Molly Reilly/Courtesy Reuters).

It seems the campaign book so popular in the United States has headed south of the border. After a recent tour through Washington, DC, and New York, former governor and likely PRI presidential candidate Enrique Peña Nieto just released Mexico, the Great Hope. An efficient state for democracy with results.

Arguing that the successive PAN administrations have left the country worse for the wear, Peña Nieto lays out his vision for a government based on guaranteeing citizens’ basic rights (such as security), getting the economy growing at its full potential, and reaffirming Mexico’s leadership as an emerging power on the world stage. He calls for a number of economic reforms, including opening Petróleos Mexicanos (PEMEX) to private investment (still maintaining state ownership), as well as widening the tax base and simplifying the tax code. On security, he favors a more comprehensive strategy geared first and foremost to reducing the violence.

Most of his positions are quite sensible. Mexico needs to (and is already starting to) focus on lowering the escalating levels of violence, as opposed to concentrating on taking down drug kingpins. Economically, opening up PEMEX would increase foreign investment and improve Mexico’s overall competitiveness, boosting jobs and growth in the process. Reforming the tax code would also go a long way to enhancing and diversifying government revenues and  hopefully make it easier to start up businesses. But these two  reforms are also politically difficult — having been on the legislative table for years now, and repeatedly stymied by Peña Nieto’s own party. If he wins, perhaps the former governor will be Mexico’s equivalent of a “Nixon in China” – able to change the dynamics precisely because of his party’s ties to PEMEX’s union – but that remains to be seen.

Much will also depend on the United States. For Mexico to reach its economic potential, the United States will have to grow as well, as the economies today are indelibly intertwined. A U.S. immigration reform – if it happens — also could change things for Mexico. For all its big vision, the book makes clear that there is much that needs to happen during the next presidential term in Mexico to fulfill  this “great hope.”

Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.

Young people rest on a sidewalk as a man cleans in Mexico City (Henry Romero/Courtesy Reuters).

An OECD report released this September shows that seven million young Mexicans between the ages of fifteen and twenty-nine are neither in school nor in the labor force. Among OECD countries, Mexico has the third largest “inactive” youth population, behind only Turkey and Israel. Mexico has been increasingly concerned about the security implications of  the vast number of  these “idle” youths — dubbed “Ni-Nis” (Neither-Nors). NiNis are thought to be especially vulnerable to recruitment by organized criminal groups, acting as lookouts, dealers, smugglers, or even hit-men.

Overall, the number of NiNis has decreased by more than 10 percent since 1990, questioning at first glance the ties to rising violence. But a more detailed breakdown of this rootless youth suggests these worries aren’t totally misplaced. Most of the decline reflects the changing prospects for young women – who are much more likely to work or study today than they were twenty years ago. For urban men – the population most likely to be recruited by gangs and organized crime groups – not as much has changed, as their share of the total NiNi population has only decreased by one percent over the past two decades.

A recent study conducted by investigators from CIDE and the Colegio de México shows too that NiNis are concentrated in Central and Northern states — including some of Mexico’s most violent ones. The largest proportion of inactive youths are in Chihuahua, Durango, San Luis Potosí, Guerrero and Zacatecas (and in cities such as Ciudad Juarez).  In municipalities in these five states the numbers have remained stubbornly high over the last twenty years. Also, while NiNis aren’t concentrated in the poorest states, they do come predominantly from poorer families. Seven in ten NiNis come from households earning below the national average. Their parents are also less educated than the average Mexican, suggesting a vicious cycle as they too spend less time in school than their occupied counterparts.

Some factors are working in Mexico’s favor. Demographics should lessen the challenge  a bit – as going forward each year fewer youths will hit the streets. A rebounding economy can help too – as unemployment levels fairly strongly affect the number of (particularly male) NiNis. But Mexico’s government and society still will have to find ways to engage these young people, to help them see beyond the next few years and offer them real alternatives to a life of crime.

Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.

Peña Nieto, outgoing Institutional Revolutionary Party governor in the State of Mexico, is silhouetted against the national flag before delivering his sixth and final state report in Toluca (Courtesy Reuters).

I had the pleasure of speaking at and moderating a panel last Thursday at the Council of the Americas/Americas Society with Claudio X. González, Chairman of the Board of Kimberly-Clark de Mexico and on the board  of a number of top Mexican corporations, as well as Alberto Ardura, Managing Director and Head of Capital Markets for Latin America at Deutsche Bank. Some of the most interesting issues raised were the relationship between security and the economy, and the future of the energy sector.

Overall, the political and economic outlook was quite positive, despite the formidable challenges the next administration will face. Mr. González highlighted that Mexico presents something of a paradox – despite increasing insecurity, the economy is picking up. He credited this in large part to orthodox economic policies that have kept deficits and inflation low, leading to GDP growth in the realm of 4-5 percent (outpacing current market estimates). Mr. Ardura echoed this view, saying that the fifteen plus years of fiscally responsible policies have made Mexico’s economy the healthiest in the hemisphere, with some of the best macroeconomic fundamentals in the world (certainly among emerging markets).

Still, both panelists remained concerned about Mexico’s future competitiveness and growth. Despite its macroeconomic prowess, it has fallen behind Brazil, Peru, Colombia, and even less orthodox Argentina. The main holdups are security, the closed energy sector, education, and the concentration within so many sectors of the Mexican economy.  They felt that if the government could tackle a few of these major issues, it could pick up the speed of annual growth to five or six percent — transforming Mexico in the process.

The speakers were quite optimistic about the PRI, both on its ability to get things done if it wins the presidency (particularly if it wins a majority in Congress, ending legislative gridlock), and on substance — especially the possibility of opening the energy sector.

But some in the audience doubted the positive momentum, particularly the veracity of the new, more modern PRI that looks set to capture Los Pinos next July. Many (at the podium and in the audience) remained skeptical about whether the “dinosaurs” of the party would stand down, allowing these more comprehensive reforms to strengthen Mexico’s public institutions and jump-start its economy.

Published in conjunction with Latin America’s Moment at the Council on Foreign Relations.