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Mexicans Find Reasons to Stay in Mexico

11 Jul

Believe it or not, Mexican migration al Norte has been reduced to a trickle of its former self and U.S. businesses are begging to stay in Mexico’s border region. Why? Education and increasing job options in Mexico are dulling the allure of an increasingly treacherous trek northward. The Mexican economy is prospering significantly faster than the United States. In less than a week, the New York Times has published two similar articles about Mexico. The common denominator in each? Mexico’s socio-economic prosperity despite violence. The article, “Better Lives for Mexicans Cut Allure of Going North“, provides insight:

Courtesy of iStockphoto

 

A growing body of evidence suggests that a mix of developments — expanding economic and educational opportunities, rising border crime and shrinking families — are suppressing illegal traffic as much as economic slowdowns or immigrant crackdowns in the United States…But Mexican immigration has always been defined by both the push (from Mexico) and the pull (of the United States). The decision to leave home involves a comparison, a wrenching cost-benefit analysis, and just as a Mexican baby boom and economic crises kicked off the emigration waves in the 1980s and ’90s, research now shows that the easing of demographic and economic pressures is helping keep departures in check.

An article titled, “Despite Violence, U.S. Firms Expand in Mexico“, explains:

When the latest bloody headlines from the drug war in Mexico reach headquarters in New York, Ken Chandler, the manager of an American electronics manufacturing plant here, jumps on the phone… He is not begging to come home. He is begging to stay… Despite the bleak outlook the drug war summons, the Mexican economy is humming along, not without warning signs, but growing considerably faster than that of the United States…The result is a boomlet in jobs in some of Mexico’s hardest-hit cities, a bright spot in an otherwise bleak stream of shootouts, departing small businesses and fear of random death.

Argentina y México: acuerdan mejorar vínculos económicos

1 Jun

By Doris Marquez    @Matt.org
Cristina Fernández, presidenta de Argentina y Felipe Calderón, presidente de México acordaron este lunes en fortalecer los vínculos económicos bilaterales y progresar en el combare al crimen organizado, para lo cual tuvieron que firmar unos instrumentos bilaterales.

La presidente de Argentina tenía previsto visitar México el 14 de abril, pero interrumpió el viaje a causa de un cuadro de hipotensión arterial, problema que ha sufrido en otras ocasiones.

En la visita oficial de la presidenta de Argentina, los gobiernos de ambos países firmaron un memorándum de entendimiento para la promoción de inversiones bilaterales y un tratado de extradición para reclamar a criminales o  a quienes se les haya iniciado un proceso penal en alguna de las dos naciones.

Fernández en un comentario  a la prensa posterior a un encuentro privado con su colega Felipe Calderón , le mencionó : “Nunca hubo un grado de relación tan profundo, tan cordial entre los Estados Unidos de México y la República Argentina”.

La mandatario mencionó, sin embargo, que aún son mayores “las posibilidades de articulación” entre ambos países.

El presidente mexicano comentó que el comercio bilateral se cuadruplicó en la última década hasta alcanzar actualmente cerca de$ 2.900 millones de dólares, lo cual ha colocado a Argentina como el cuarto socio comercial de México en Latinoamérica.

Calderón señaló,”Aunque estos avances son relevantes, es claro que tenemos un enorme potencial para lograr un mayor intercambio económico”

Foto: Cortesía de aol.noticias

Powerful New Latin American “Pacific Alliance” Formed

6 May

by Carlos Arredondo @ MATT.org

What could be a landmark agreement in Latin American economic history was signed last Thursday in the Golden Hall of the Governmental Palace of Lima, Peru’s capital. The Lima Declaration, or Pacific Alliance, was signed by the presidents of four Latin American countries that attended and who presently make up the accord: Mexico, Columbia, Chile and Peru. This comes just less than a month after Peru and Mexico signed a bi-lateral free trade agreement. While it was no secret that Peru’s agenda was to eventually create a larger alliance with multiple countries, the process has been perhaps speedier than expected. The Pacific Alliance agreement will supplant and augment a host of other bilateral pacts that the four countries currently share with each other, including the one Mexico just signed. One of its initial goals is to extend all the benefits of the existing bilateral trade agreements to all its own members, even while a strong emphasis of the agreement is to cultivate trading relationship with Asia.

            The purported purpose of the Pacific Alliance is to create a framework for deep integration in the region increasing economic competitiveness, and advancing a free market for the flow of goods, services, capital and labor, and to strengthen trade links with the Asia-Pacific region. Chilean President Sebastian Pinera said that it would not only liberalize trade in goods but trade in services and ease the movement of investment capital and financial integration. The nations’ leaders agreed that in its first stage the Pacific Alliance would prioritize people and business by focusing on better migration facilities, easing immigration and custom procedures, and ensuring police cooperation. Additionally, the agreement presents the possibility of integrating stock exchanges as well. The four presidents decided that they would hold their next meeting in Mexico in December to evaluate and assess progress of the integration as well as to continue building upon the bilateral free trade deals already in place. It is not final yet either that these are the only four countries that will form the Pacific Alliance as Panama and Ecuador are already potential candidates to join, Columbian President Juan Manuel Santos said that its members will “welcome those countries that wish to join this process.”
            The four leaders said that this trade alliance would make the largest trading zone in Latin America, surpassing Mercosur, the common market of Brazil, Argentinea, Uruguay and Paraguay. Calderon said that the four economies have a total combined value of $872 billion compared to Mercosur’s $543 billion, and that their combined exports of $443 billion also well exceed Mercosur’s $282 billion. But he added that the bloc would not be “just the sum of our exports and imports, it is a synergy of competitiveness.” Even though Peru, Mexico, Chile and Columbia combined represent 55% of Latin American exports and 35% of the continent’s GDP. Peruvian President Alan Garcia said, “Our four nations, and Panama in the near future, represent 200 million people. Our countries account for 55 percent of Latin American exports… This is not a romantic integration, a poetic integration. It is a realistic integration with the world and to the world.” Trade experts say that the Pacific Alliance could progress more rapidly than existing regional trade blocs like Mercosur that have been around for years but made few advances in eliminating barriers to trade. “Of the many integration projects in Latin America, this agreement has a better chance of success,” said Carlos Aquino director of economic studies at San Marcos University in Lima, “The four countries are stable democracies with open economies.” All four nations have leaders that are proponents of free-market systems, which may be in contrast to Mercosur.
            The Pacific Alliance is significant even though each of the four countries already have trade deals with the United States. The US has lost some of its appeal as a trade partner due to the recent recession in its economy. Additionally, forecasts like the International Monetary Fund’s (IMF)  prediction that China’s economy will outgrow the US as the dominant world economy by as early as 2016 don’t help either. Mexico, who sends nearly 80% of its exports northward to the US, found out how quickly the climate of its economy can change when an overwhelming majority of the demands on its exports are tied to one country. President Garcia was probably keen to this when he said “We firmly believe that the best way to face the global crisis and assure development, employment and justice is the integration and complementing of our economies and visions for the future.”
            Garcia also said, “What we are starting here, even though we won’t be here in the government going forward, will mean a decisive step forward for the true integration that we have all dreamed of”…“This is a decisive and historic step toward the modernization of our continent and toward the social development and justice for our people.”

Surprise! Undocumented Immigrants Paid $11.2 Billion In Taxes, General Electric Paid Nothing

2 May

by Regina Cantu @ Matt.org

This past month, there was a great deal of outrage over General Electric who, despite having made $14.2 billion in profits, paid zero U.S. taxes in 2010. In fact, General Electric received tax credits of $3.2 billion from American taxpayers.

Meanwhile, a study by the Institute on Taxation and Economic Policy challenges the notion that illegal immigrants come to the U.S. to freeload. According to the New York Daily News, the study says unauthorized immigrants paid $11.2 billion in taxes last year:

ITEP estimates that households that are headed by undocumented immigrants (which may include members who are U.S. citizens or legal immigrants) paid $11.2 billion in state and local taxes last year. That included $1.2 billion in personal income taxes, $1.6 billion in property taxes and $8.4 billion in sales taxes.

Here’s more from the columnist:
To no one’s surprise, taxes are still as certain for working people – and whatever is left of the middle class – as they ever were. But for, well, GE and other corporate giants, the only certainty is that many found ways to contribute as little to the country’s coffers as possible.
At the same time, Republicans in Washington are involved in a mighty struggle to protect the tax breaks of the country’s richest 2%, while happily proposing to cut the most basic social services to Americans who really need them.

To be fair, corporations also pay state and local taxes of several types. But in a political environment where taxes are regarded as the rich man’s curse, it’s illuminating to place these numbers in juxtaposition.

ITEP bases its figures of what immigrants pay taxes based on the following factors:

  • Sales tax is automatic, so it is assumed that unauthorized residents would pay sales tax at similar rates to U.S. citizens and legal immigrants with similar income levels.
  • Similar to sales tax, property taxes are hard to avoid, and unauthorized immigrants are assumed to pay the same property taxes as others with the same income level. ITEP assumes that most unauthorized immigrants are renters, and only calculates the taxes paid by renters.
  • Income tax contributions by the unauthorized population are less comparable to other populations because many unauthorized immigrants work “off the books” and income taxes are not automatically withheld from their paychecks. ITEP conservatively estimates that 50 percent of unauthorized immigrants are paying income taxes.

While it’s impossible to estimate exactly how much in taxes undocumented immigrants paid, what is clear is that undocumented immigrants are paying more taxes than General Electric, which paid absolutely nothing. This raises the question of who really is leaching off the American system: undocumented immigrants who pay their taxes and are typically too afraid of being deported to receive public assistance or corporations that pay nothing while receiving billions in credits.

Mexico Takes Step Toward Becoming Competitive Global Trader, Signs FTA

26 Apr

by Carlos Arredondo @ MATT.org

What began some 5 years ago finally has seen completion this month. In 2005 Mexico had begun talks with Peru to develop a legal framework for a free trade agreement. There have been 8 rounds of negotiations since then, with the last meeting taking place in 2007, but early this month closure was finally reached as the two concluded by signing the Mexico-Peru Trade Integration Agreement.

The signing took place in Lima, Peru in the presidential palace with various heads of state including the Peruvian President Alan Garcia, Peruvian Minister of Economy Ismael Benavides, and Mexican Economy Minister Bruno Ferrari amongst others. While Peru was definitive in its objective of advancing its trade relationship with Mexico, it also openly acknowledged this is a smaller step in an overarching longer-term goal to grow healthy and efficient trade relationships between China and Asian countries. An undertaking they are attempting to get Chile and Columbia to join as well as Mexico. China, which has the world’s second largest economy, borders the Pacific as do all four of these Latin American countries and the idea is to make shipping between the continents a simpler and smoother affair. The FTA’s between these four countries is a beginning to this end and a step toward increasing their international competitiveness as global traders. Peruvian Trade Minister Eduardo Ferreyros said, “We already have agreements with Colombia and Chile; this is going to permit us to have a more profound integration with the Pacific and integrate with Asian markets.”  President Garcia said, “This is a decisive step to draw closer to Mexico, but it is also a preliminary step for a major project on which we’re working with Chile and Columbia, in addition to Mexico” and that the project seeks, “a deep integration of our four countries, in the exchange of products and people, to expand towards Asia.” Speaking of Mexico he also said they were associating with, “an economy of great dimensions, great growth, great vitality that is linked to the world’s largest economy, the United States” … “We feel that we’re recovering this Mexico that we love so much, whose presence in the South American region is going to have revitalizing effects.” Mexican Bruno Ferrari remarked that, “After overcoming great obstacles, we’re attaining a shared vision and we’re assuming the common task of building a more prosperous and equitable future for our peoples” and that “this is a step forward for the decade of Latin America.”

Mexico has the second largest GDP of Latin America (around 1 trillion US dollars) and represents a market of 112 million people,  four times that of Peru’s population. Mexico’s annual total exports exceed $300billion US dollars per year while its imports amount to $320 billion, but its trade with Peru amounts to only a marginal fraction of that… $1.41 billion in 2010. According to the Economy Ministry Mexico currently actually exports $974 million a year to Peru (0.3% of total Mexican exports) and makes up 3.4% of Peru’s imports. However, this free-trade agreement was signed in agreement with the forecast that with its implementation that number would increase, more than doubling, in the next five years to $2.7 billion. Ferrari also said Mexico would benefit with creation of new jobs, “At present, trade with Peru creates 23,000 jobs for Mexicans. If the deal is signed, that number could almost double over the next five years with the creation of 17,000 jobs.” Another benefit of the deal is that greater freedom of movement of skilled and educated workers between the two countries will be possible. Citizens in both countries, which share the same language, will now be free to pursue professions and educations in either country as there will be greater recognition of “qualifications and degrees.”

There were limitations in the agreement however. Mexico sought to protect its domestic market by excluding some agricultural goods from preferential status with Peru. It also had concerns with importing meat due to concern that cattle suffered from FMD disease. Mexico excluded 193 products from the deal including coffee, rice, sugar, beef, chicken and dairy products. Nevertheless, Ferrari was quick to point out that they were partnering with a country that had one of the most dynamic economies of South America and has received investment of some $3.7 billion dollars from various firms.

Mexico’s Telecom Industry Shaken up by Billionaire Feuds

26 Mar

By Carlos Arredondo @ MATT.org

Earlier this month Forbes magazine came out with its list of “The World’s Billionaires”and “The World’s Most Powerful People” and #1 on the Billionaire’s list was the Mexican Carlos Slim Helu. Not only was he at the top of the list, but to say he held the title comfortably and unchallenged would be an understatement. The nearest competition he had, namely Bill Gates and Warren Buffet, trailed behind him by more than $20 billion dollars!

Bruno Ferrari Garcia, the Secretary of Economy of Mexico, expressed a positive outlook on Carlos Slim being formally recognized as the richest man in the world and congratulated him. Ferrari conveyed his faith that Slim would continue to be generous to the country that helped him make his billions by focusing some of his resources to helping Mexico in a variety of ways. Speaking of the fact that several other Mexican’s also made the billionaire’s list this year Ferrari said, “We should not rejoice that there is one but that more and more Mexicans are on that list because it means more jobs and investment. Carlos Slim’s fortune represents 7 percent of Mexico’s gross domestic product (GDP), surpassing that of 118 economies in the world.”

So if you’re anything like me, you might be wondering how in the heck a guy you possibly haven’t even heard of acquired a $74 billion US dollar net worth. Well apparently he’s got his hands in everything from hotels, mining, oil drilling, tobacco, construction, department stores, to financial services, but the real cash cow is Telmex and Telcel. Companies which have essentially monopolized the telecommunications market nationally. Some 80% of landlines in Mexico are connected through Telmex, and Telcel has some 70-90% of the mobile-phone market. Slim had bought struggling companies in the inflationary crisis of the 1980’s and bought up Telmex in 1990 when the government was privatizing the national telephone company.

Slim is not the only player in Mexico though, billionaire Emilio Azcarraga maintains practically as dominant a hold on the television sector. His company, Televisa, controls some 70% of the country’s free-to-air TV audience. The history of the stability of these near-monopolies has been primarily due to the fact that there has been no reason for them to interfere with each other’s market. Until now that is. The evolution of technology is beginning to blur the lines that had so clearly defined and divided their industries. Televisa is now bundling phone and internet with its cable-TV services and wants to add mobile phones while Slim wants to use his phone cables to distribute pay-television.

It appears that this industry might be birthing into an era where competitive players vie to win market share. On March 9th a group of 25 companies spearheaded by Televisa and TV Azteca filed a complaint with the CFC or Federal Competition Commission against Slim’s telephone company. On the same day Slim filed his own complaint against Televisa and TV Azteca accusing them of plotting to block him from the TV business. Slim already withdrew $70million of advertising from Televisa’s channels in February, and within weeks TV Azteca had forbade him from advertising on their channels also.

Two thoughts come to my mind about all of this. Firstly, while I was already aware of the stark contrast of social class division in Mexico, I am still intrigued that the wealthiest man in the world grew and cultivated his empire in a nation where nearly half of its 100 million plus inhabitants live in some degree of poverty. Secondly, an old proverb I believe of some Eastern origin comes to mind, “When elephants fight, it is the grass that suffers.” I have never found a scenario where this isn’t true, until now. It seems the opposite might be the case here… in this case the grass might benefit from a few elephants duking it out.

“Dumb” America: Is it Ignorance or Apathy?

25 Mar

by Regina Cantu @ Matt.org

Newsweek recently asked 1,000 U.S. citizens to take the US’s official citizenship test, and it turns out,
• 29% couldn’t name the vice president.
• 73% couldn’t correctly say why we fought the Cold War
• 44% were unable to define the Bill of Rights
• And 6% couldn’t even circle Independence Day on a calendar.

But this we know. Americans have been mixing up the branches and their senators since the drafting of the Constitution (Which was… when?). Civic ignorance has been mocked as much as it has been lamented ever since pollsters started publishing these alarming surveys in the late 1940s, (But please don’t ask me who was President back then!).

First let’s understand why this ignorance about government exists and why it is so widespread. Most people will claim that the complexity of the political system in this country makes it hard to stay informed. Compare our structure to most European countries whose parliaments have proportional representation, and the majority party rules without having to defer to as many subnational governments. In contrast, the US is guided by a nonproportional Senate, a web of federal, state and local bureaucracies, as well as endless elections for every available government position (judge, sheriff, school-board member, etc.) So you can see how challenging it becomes to know whom to for and when.

I also blame American schooling. Under the current decentralized education system, individual states structure their own curricula, and this has weakened civic culture and the common body of knowledge. To make matters worse, our TV channels and high-traffic Internet sites devote far more programming and coverage to market- and consumer-oriented topics in place of international news and public affairs, prioritizing entertainment over government issues.

As Newsweek’s Andrew Romano puts it,
For more than two centuries, Americans have gotten away with not knowing much about the world around them. But times have changed—and they’ve changed in ways that make civic ignorance a big problem going forward. While isolationism is fine in an isolated society, we can no longer afford to mind our own business. What happens in China and India (or at a Japanese nuclear plant) affects the autoworker in Detroit; what happens in the statehouse and the White House affects the competition in China and India. Before the Internet, brawn was enough; now the information economy demands brains instead.

And this is my biggest criticism of how we use the Internet. Rather than become informed or contribute to the existing body of knowledge, we choose to fill our bookmarks with entertainment and social networking sites, giving preference to an acquaintance’s Facebook photo album from some banal event we did not attend over the most pressing issues and discussions of our time. The irony of today’s Internet culture is that we are given the tools to become informed and partake in dialogue accessible to anyone, anywhere who chooses to do so, but we instead allow activists to dominate the debate from extreme ends of the spectrum while we engage in frivolous online activity, such as shopping and entertainment.

The most glaring example of our ignorance is the current conflict over government spending: Countless polls show voters have no clue what the budget actually looks like. A 2010 World Public Opinion survey found that Americans think the best way to minimize deficits is by cutting foreign aid from what they believe is the current level (27 percent of the budget) to a more prudent 13 percent. In truth, our foreign aid amounts to less than 1 percent of our budget. Needless to say, such ill informed public opinion brings into question the value of our vote. Politicians pander to these mistaken voters’ notions, and as a result, have implemented short-term solutions including cuts to more than 700,000 government jobs.

American freedom stops where American ignorance begins. In ignoring the real long-term fiscal challenges we face, we are impairing our chances to both compete and think globally. And the worst part about it is, everyone is too engrossed in entertainment to notice.