Two major factors induce immigration

By Dick Tunison

Over the past few weeks I’ve written several essays concerning our immigrations problems, but always about the impact north of our Southern border and never addressing our partners to the South. The unfolding situation in Mexico, in particular is one that needs to be examined and better understood.

In just a month, Mexico will hold another presidential election. This one is predicted to be extremely close and will test the desire of the people to continue or turn away from the more centrist policies of the current president, Vicente Fox. Since Fox is prohibited from running for reelection, there are three candidates in the race to replace him, Felipe Calderon, Andres Manuel Lopez Obrador and Roberto Madrazo. Calderon alone is of the same political bent as the outgoing president and shows strong interest in expanding the market-oriented reforms initiated by Fox. He is seen to be slightly ahead of the other two candidates. The other two are throwbacks to the old PRI party (formerly the PRN) that ruled the country from the early 1930s until 1998.

The PRI was the tail of the revolutionary days dating back to the latter part of the 19th century. That period of more than a hundred years was fraught with turmoil and multiple changes in governmental direction, but most frequently in a leftward direction with dictatorial overtones. During this period, so called land reform took place in a broad way, but never resulted in the agrarian reforms hoped for. It was also a period of nationalization that pinched hard on international investors and drove many qualified companies out of the Mexican market place leaving major industries in the hands of government bureaucrats who were more interested in graft than industrial achievement. Pemex, the Mexican governmentally controlled oil company is a case in point.

Mexico is rich in natural resources. She has vast reserves of crude oil, gold silver and copper that represent a great source of potential income to the nation providing she develops them sharply and carefully. But Pemex does not meet those criteria. Instead, the giant government owned and operated oil company is an industrial quagmire that does almost everything poorly. Pemex is saddled with a heavy debt and an inability to exploit the nations resources effectively. But this is not unique to the national petroleum industry. Most other government run corporations are riddled with scam and payola.

The entrance of Vicente Fox to the political scene in 2000 was a terrific jolt for the Mexican people, but it showed an underlying desire to end graft, a dishonest military and police system and open the economy to new ideas and the chance to live their lives in comparative freedom. Since his election, the Mexican economy has indeed grown slightly stronger, but not all of Fox’s goals have been achieved. Graft, particularly among the police and military remain vexing. Although the current favorite to win in July is Mr. Calderon, he must win by a substantial margin to avoid what could be a nasty post election fight instigated by his two rivals. I believe it’s important that we remain aware of potential political changes south of the border and not sleep through it like we’ve done in South America. We don’t need another Castro-like administration just south of our border.

The frustrating immigration problems Americans face are only exacerbated by the intolerable economic conditions in Mexico. In a way, the US has created an attractive nuisance that has acted like a magnet pulling people out of Mexico. According to Joel Kurtsman and Glenn Yago, principals in the Milken Institute, “Mexico needs to create a million new jobs a year; currently, it creates half that amount. Similarly, its growth has been nonexistent since the year 2000.”

Realistically, if Mexico is to make up its half-million new job short-fall it will need giant infusions of investment money. But it has not yet rid itself of the presumed need to have the government run everything. Investors from out side the country, particularly American, are finding little inducement to put their money in a country that may some day decide foreign run businesses should be confiscated. After all, that’s happened before.

The only way to improve the employment situation inside Mexico and reduce the run north of the border is to change the foreign investment laws and regulations. When one remembers that foreigners are not allowed to own land within 30 miles of the border and seacoast, it’s clear that there is a gigantic stumbling block to any interest Americans may have in developing attractive communities that would create jobs for local workers and provide tax revenues to a needy government.

Another lingering problem that has been with Mexico for more than a hundred years is the vast difference between the personal resources of haves and the have-nots. As I wrote in an earlier essay, I served on the compensation committee of Mexico’s largest brass company. The corporation I represented had a minority financial interest in the Mexican company. The management people I dealt with were well educated (many Harvard graduates) well informed men of high caliber. However they were among the Mexican elite and had little intercourse with the poor. The chasm between their own lives and their understanding Mexico’s poor people was vast. This was based not so much intolerance or prejudice as it was simple ignorance. This must be changed, not by the redistribution of wealth that some will certainly call for if the leftists win the next election, but by constructive changes in the economic environment that will raise all boats.

If such changes could occur, many of the problems that encourage Mexicans to head north will disappear. However, should Mr. Calderon lose the race, we can expect to see Mexico move backward with major financial problems arising and institutions disintegrating. This will not bode well for American and her immigration difficulties.

Keep your ears open for the results of Mexico’s July 2 presidential election. We have important stakes in the result.