Thursday, March 30, 2006

Lo barato sale caro

What's cheap ends up expensive

Reuters has an article that addresses the underlying issue to the mass re-migration of people from Central and South America to the United States.

Roughly half of Mexico's population lives on less than $5 a day, according to government figures. The U.S. minimum wage is $5.15 an hour. Annual Mexican Gross Domestic Product per capita is just under $7,000. It is almost $44,000 in the United States.

The gap is now wider than it was when Mexico, the United States and Canada signed the North American Free Trade Agreement in 1992.

The treaty took effect two years later and was supposed to generate more jobs in Mexico, raise incomes and, as a consequence, reduce the number of Mexicans crossing the 2,000-mile border with their superpower neighbor, legally or illegally.


An investment of $20 billion a year over the next 10 years in Mexico in roads and communications connecting the poor southern part of Mexico to the North American market, Pastor says, would attract new companies to invest in Mexico and encourage many Mexicans to stay home and others to return.

"The idea of funding development in Mexico may sound ludicrous to many," Pastor said, "and it would not end illegal immigration overnight. But it would end it eventually. And besides, it would benefit the U.S. economically."

That "ludicrous idea" is one that is being echoed by former deputy assistant secretary of Commerce, Karl Reiner, who was snagged for an interview by Blog for Arizona.

Here's a snippet:
American economic policy has long touted the benefits of free enterprise, open markets and the rule of law. As such, we must put emphasis on helping our southern neighbor get its economic house in order. Of the $8 billion spent on foreign economic assistance annually, only $30 million currently goes to projects in Mexico. We need to change that policy to ensure Mexico becomes an economic success. There is no reason why it can'’t become an example for other developing nations. As Congress debates the illegal immigration issue, it should also review the old programs that rebuilt Europe and Japan after World War II and consider doing some of the same for Mexico. A booming Mexican economy would do a lot ease the pressure on workers to migrate. An economically successful Mexico would also be a larger market for U.S. goods and services in the future.
Go read the whole thing. It is provocative, to say the least, but takes notice of the elephant in the room: the United States has been touting economic stabilization while grossly underfunding initiatives that could bring it to fruition.

Sound familiar? Of course it does, this government is "All Hat, No Cattle." They sold the American public a gold brick that ended up being iron pyrite.

Crossposted from my humble blog

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