(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.

U.S. Border Patrol agent Celso Ramos (R) looks at surveillance camera video from cameras looking at the U.S. - Mexico border May 2, 2006. (Rick Wilking/Courtesy Reuters).

The U.S. Government Accountability Office (GAO) released a detailed report last week that criticizes attempts to patrol the Arizona-Mexico border using high-cost technologies.

The report comes ten months after the cancellation of SBInet, Boeing’s “virtual” fence project that started in November 2005 and eventually cost the United States over one billion dollars. While the project in theory required less manpower and provided 24/7 patrols of the border using surveillance towers and software platforms, in practice the results were dismal. Criticism of SBInet ranged from outright technological failures, to poor oversight, to few measurable success metrics.

Although the Department of Homeland Security ended SBInet’s expansion, the GAO report makes clear that the broader emphasis on such technologies has hardly waned. The flawed SBInet system will actually continue to operate along 53 miles of Arizona’s 387-mile border with Mexico, and Customs and Border Patrol (CBP) estimates spending $36 million dollars to continue that project through 2012. The successor to SBInet, the Arizona Border Surveillance Technology Plan, will be a mixture of different surveillance technologies and platforms, with funding requests totaling $427 million over the next two years. The GAO report indicates that the new systems also lack quantifiable metrics or thorough cost-benefit analyses; some of the same problems that plagued SBInet.

To many, “virtual” fence technologies seem like an answer to immigration issues along the U.S.-Mexico border. But, like other attempts to wall-off Mexico from U.S. border states, they simply haven’t worked.

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

Shoppers carry an electronic item outside a store in Caracas (Jorge Silva/Courtesy Reuters).

As journalists, policymakers, and activists of various stripes and interests focus on the rise of the global middle class, scholars struggle with how exactly to define this category of people worldwide. The method matters, as differences can make one exceedingly optimistic or pessimistic as to today’s reality, tomorrow’s promise, and of what people, governments, companies, and markets should and should not be doing to encourage this growth.

One way of measuring the middle class is in relative terms, by looking at who is within the middle range of incomes in any given country. Scholars such as Lester Thurow, Nancy Birdsall and William Easterly have done this in various formats. But it is often unclear exactly what their results mean for emerging economies, where the middle of the country is not necessarily one and the same as the middle class. It is also hard to use this approach comparatively, as the “central” income range differs widely from country to country.

Another approach is to use absolute thresholds, which has the advantage of getting at attributes that are more universally acknowledged as middle class. The question here becomes how to define this “fixed band.” The most expansive calculation – used by Martin Ravallion at the World Bank — classifies a middle class person as anyone who makes between $2 and $13 a day in PPP terms. Intended to measure the expansion of the middle in emerging markets,  this definition includes those who have just made it across the World Bank $2 poverty line. By this measure, China and India have made incredible strides over the past fifteen years, developing a true middle class. But to those in advanced Western economies many of these people would almost certainly be considered abjectly poor, questioning the comparative value, and universality of this scale.

On the more restrictive end, a study by Branko Milanovic and Shlomo Yitzaki sets the the upper and lower bounds of the global middle at the average incomes of Brazil ($4,000 in 2000 PPP terms) and Italy ($17,000) as, and counts anyone earning between $12 and $50 a day as middle class. These may not be the right threshold incomes either, however, particularly because this bottom line leaves out the millions in India and China who earn less than $12 a day and yet still, as households, lead quite comfortable middle class lifestyles. This definition puts Mexico’s middle at less than half the population, in contrast to those that count Mexico as now majority middle class.

Finally, a Brookings report by Cárdenas, Kharas and Henao takes a slightly different approach to the issue. Based on an earlier study by Kharas, they use the poverty line in Portugal and Italy – the lowest among advanced European countries – as the lower limit and twice the average income in Luxembourg, the richest European nation, as the upper limit of the global middle. As the authors note, their calculation “excludes those who are considered poor in the poorest advanced countries and those who are considered rich in the richest advanced country.”

Source: Cárdenas et al., "Latin America's Global Middle Class," Brookings (2011).

By this definition, the Latin American countries with the largest middle classes are Mexico (60%), Uruguay (56%), and Argentina (53%), while Bolivia (13%), Honduras  (16%) and Paraguay (19%) fall on the lower end of the spectrum. As a whole, the region cannot be called middle class, but it is moving in the right direction, and may qualify in the near future. The model predicts that by 2030 over half of Latin American countries will have a majority middle class. It contrasts with China and India in this regard, where, despite great progress, a true middle class as a substantial percentage of the overall population is still decades away.

Recognizing the enormous expansion of the middle class in Latin America and worldwide does not deny the destitute poverty in which hundreds of millions, even billions, still live. But ignoring the progress of recent years also has its perils for the poor. Better measuring and understanding the rise of the global middle is vital precisely because it suggests paths for those still less fortunate to follow.

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

First lady Michelle Obama attends a Hispanic Heritage event at Lamb Public Charter School in Washington (Yuri Gripas/Courtesy Reuters).

At last week’s Republican presidential debate a member of the audience provocatively reminded the candidates that not all of the Latinos in the United States are illegal, and then asked them, “What is the message from you guys to our Latino community?” Nearly everyone on stage dodged the question, saying that they didn’t have a specific message for Hispanic voters because “they want virtually exactly what everyone else wants” such as a healthy economy and access to affordable health insurance. That may be true, but the exchange raises the broader issue of whether the Republicans can connect with the growing number of American citizens with links back to Latin America.

Finding a good answer to this question is more important than ever. Some 50.5 million people – or one in six Americans – fall under this moniker. In every single state of the union, the Latino population grew over the past decade – including in swing states such Florida, Iowa, Virginia, Georgia and North Carolina.

What the presidential frontrunners have done quite vocally is attack one another for “soft” immigration stances and lashed out against “illegals”. Herman Cain ratcheted up the rhetoric to an all time high, suggesting electrifying the border fence and killing anyone who tried to cross into the United States from Mexico.  A wave of harsh immigration laws – requiring police to check the immigration status of anyone they suspect is undocumented, punishing landlords that rent to those without papers, and even checking immigration status at schools — have passed in states including Arizona, Georgia, and Alabama. With the economy in the doldrums and unemployment near historic highs, blaming illegal immigrants for many of America’s ills has gained traction, particularly within the Republican Party.  Though technically not directed at U.S. Latinos, many feel the rising hostility targets them all the same.

While it may be awhile until the full economic effects of these laws are clear (a recent study by the Council of the Americas suggests that the restrictive laws hurt rather than help local employment), the political impact is more immediate. How the polarization will  play out in the primaries –will it further energize a strongly anti-immigrant conservative base, or mobilize Latino and other pro-immigrant groups (along the lines of the coalition that defeated an English-only bill in Nashville, Tennessee in 2009) – remains to be seen. But in the general national election, it is hard to imagine how it helps its proponents.

At the Western Republican Leadership Conference/CNN debate Rick Santorum was the only Republican presidential candidate who seemed to recognize what other prominent party leaders (such as Karl Rove and Jeb Bush) have been saying now for awhile: the Republicans cannot afford to alienate this huge and growing demographic. They also don’t have to. The Republican Party has the opportunity to connect with Latinos on a number of issues, including family values, faith-based views, and an emphasis on entrepreneurship and small businesses. But if Rick Santorum is the only Republican hopeful that understands the importance of reaching out to Latinos, then the party is in trouble. President Obama won a whopping 67 percent of the Latino vote in 2008, and preliminary counts suggest that this demographic will only be more important this time around. History suggests that minorities, while often punching below their electoral weight, tend to turn out for national presidential (as opposed to midterm) elections. In 2012, they will represent over a third of the voting age population — an all time high.  To compete, the Republicans have to come up with a better answer, or they risk losing America’s fastest growing electorate.

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

President Obama delivers remarks on immigration reform at Chamizal National Memorial Park in El Paso (Jim Young / Courtesy Reuters).

Framed by sunny El Paso skies, President Obama put immigration back firmly on center stage yesterday.  In his speech he called on Congress to “put politics aside” and find “common ground”  in order to reform a broken system. His justifications are similar to those of the past – immigration reform is both an economic and moral imperative, as important for the future competitiveness of our country as for our understanding of ourselves as Americans. The basic outline for reform is also similar to the last legislative round in 2007 – tougher penalties against businesses employing undocumented workers; temporary worker programs; a path to citizenship for those living in the shadows requiring applicants to pay penalties, taxes, and learn English; legal status for American college graduates hoping to start businesses here; and citizenship for young people brought to the U.S. as children who go on to college or serve in the military (the so-called DREAM Act).

What is different this time around is that in reopening the debate, Obama explicitly called on a constituency that remained decidedly quiet during the last polarizing round: business. In his speech, he singled out and quoted as many businessmen as immigrants. Alongside the voices of immigrants serving in the U.S. marines and navy, Obama added those of Bill Gates and Rupert Murdoch. He went on to mention some of the largest corporations founded by immigrants – Google, Intel, Yahoo and Ebay –which add billions of dollars and thousands of jobs to the U.S. economy.

An eloquent speech in and of itself will change few minds, particularly as the 2012 Presidential election season nears. But if it would open the deep pockets of the private sector, it could perhaps make a difference. Of any constituency business has a cross-cutting power to pressure for the necessary reach across the aisle. And openness to immigration reform seems to span the private sector – from agriculture to high tech, from small businesses to the largest corporations, from the coasts to the center. Even the U.S. Chamber of Commerce – a consistent Obama critic – agrees with the President on the issues and has been pushing these types of reforms for a decade.

Comprehensive immigration reform is a long shot. The hostility of a vocal portion of the electorate will still likely hold the political process hostage, at least until after the 2012 election. But involving the quite powerful groups sitting on the sidelines is the way to give reform its best chance.

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

A shaman performs a ritual in front of a photograph of President Barack Obama in Lima (Mariana Bazo/Courtesy Reuters).

Between March 19 and 23, President Obama will take his first foreign trip this year – and his first ever to South America. He will kick it off in Brasilia and Rio de Janeiro, then head to Santiago, and finish up in San Salvador. The trip’s goal, as announced in his State of the Union address, is to “forge new alliances across the Americas.” Alongside the obvious meetings between presidents, in the works are business roundtables, a visit to one of Rio’s favelas, an Egyptian style speech to “all Latin Americans” in Santiago, and educational activities for his daughters, who, along with the First Lady, will accompany him.

Why these three nations?

Brazil is the obvious choice. It has grown into an economic and diplomatic powerhouse, weighing in on world issues from financial reform to climate change. Under Lula, it flexed its muscle at times to the discomfort of the United States – on nuclear proliferation and Middle East politics, U.S. bases in the region, and the Honduran standoff. With newly installed President Dilma Rousseff’s openness to deepening U.S.-Brazil ties, there are high hopes on both sides that the trip will open a new chapter in the relations between the two largest economies of the Americas.

On the table will be trade and investment, particularly on clean energy and Brazil’s infrastructure needs in the lead up to the World Cup and the Olympics games. Also up for discussion will be China and its currency, as companies in both countries struggle to compete with Chinese imports and investments.

The other two nations are less obvious stops. Important as nations with which the United States maintains strong friendly ties, they are also examples of pragmatic and progressive governments from across the ideological spectrum. Chile’s Sebastián Piñera is leading one of the region’s most prosperous and stable nations from the center-right– the first elected conservative leader since the end of the Pinochet dictatorship. Obama’s visit will put the finishing touches on a nuclear pact, and the two leaders will work on clean energy and intellectual property issues (in particular the steps to get Chile off the U.S. priority watch list for failing to protect IP rights). Both leaders are keen to discuss innovation and entrepreneurship – part of their domestic political platforms.

El Salvador’s Mauricio Funes rules from the other side of the spectrum. A reformed revolutionary, he is the United States’ strongest partner today in Central America. The presidents will focus on security– Funes presented a $900 million plan to Hillary Clinton last fall, which would quadruple U.S. commitments under the Merida Initiative to Central America – as well as issues of economic cooperation and poverty reduction. The future of the 2.5 million Salvadorans (roughly one of every four) living in the United States will also be on the table, as Funes hopes to replace the Temporary Protected Status under which most live with a path to permanent residency.

What is also interesting is who is not on the list. The President, First Lady, and family will not be stopping in Buenos Aires, Argentina; a decision said to upset President Cristina Fernández de Kirchner. Behind the scenes, many feel that the old aphorism once attributed to Brazil is perhaps now more applicable to Argentina, that it is “not a serious country.” Also not on the itinerary is Colombia, in part because Obama has no good news to bring his counterpart on the long-delayed free trade agreement.

Though timed to coincide with the 50th anniversary of the Alliance for Progress, nothing so grandiose will be in the works. Nevertheless, as the heads of state meet and talk about an array of issues, Obama has the opportunity to make a significant change. In addition to the usual bilateral and regional topics, it is important that Obama bring Latin America into his thinking about global challenges. This shift, though subtle, would be the start of a real transformation in U.S.-Latin America relations.

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

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.

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.