Enlaces News #8 (November 2004)

PERSPECTIVES FROM OTHER ORGANIZATIONS:
Fresh Ideas for Integration in the Americas
By Amy Shannon

With inequality hitting record levels and growth in the doldrums in Latin America, a diverse chorus of analysts, activists, and policymakers has begun to call for a departure from the “one-size-fits all” economic liberalization, which has characterized U.S. foreign policy toward the region for the past two decades. Even some former insiders such as Joe Stiglitz, former Chief Economist at the World Bank, have come out with stinging critiques of this so-called “Washington Consensus,” which mandates swift market opening (tariff reduction), privatization of state-owned enterprise, and a focus on trade and foreign investment as the drivers of economic growth. At a recent speech to the United Nations, Brazilian President Luis Ignacio “Lula” da Silva decried the “asymmetric and exclusionary processes of globalization” that have “deepened the devastating legacy of misery and social decay” in Latin America.

Despite the mounting evidence that the focus on “free trade” has failed to deliver benefits for poor countries on key issues (such as job creation and poverty alleviation), a clear set of alternatives to current policies has yet to gain much political traction. Some analysts are taking a closer look at the European integration experience with an eye toward extracting lessons for the Americas.

In their recent essay “Lessons from European Integration for the Americas”, Sarah Anderson and John Cavanagh from the Institute for Policy Studies in Washington, D.C., contrast European Union integration policies with the U.S. version of economic integration embodied in the NAFTA and in drafts of the proposed Free Trade Area of the Americas. One striking difference they find is that the Europeans have invested in bringing economic and social parity to member countries. As part of the integration process, the EU examines the strengths and weaknesses of individual countries, providing dedicated funding to level the playing field among them. This includes specific investments aimed at “transferring economic resources to reduce inequality, rather than expecting the market to do the job,” according to Anderson. The EU has dispersed over 18 million euros over the past seventeen years in programs designed to strengthen the economies of poorer member nations, many of which have since experienced a substantial growth in per capita income. In contrast, Mexico’s per capita income remained flat since the signing of NAFTA in 1994.

Anderson and Cavanagh point out that the European Union also teaches us that integration does not necessarily provoke mass migration. In fact, citizens of the EU can travel freely from one member nation to another. The relatively small flow of migration, even after more recent integration of poorer nations, can be traced in part to measures taken to reduce income inequality in poorer nations through targeted investment and funding. This observation points to another concrete policy recommendation: instead of spending billions of dollars in a never-ending effort to militarize and patrol our borders, the United States should consider making strategic investments in its trading partners that would reduce the impetus for migration. However, the immigration picture is not all rosy in Europe. Extremely restrictive citizenship laws can result in second or third generation children of immigrants who do not enjoy full rights of citizenship in the adopted country. Furthermore, European countries strongly favor temporary work visas as the primary way of managing non-EU immigration flows.

In his article “Migración Internacional, Tratados de Libre Comercio y Desarollo Económico en Centroamérica y México” (International Migration, Free Trade Agreements and Economic Development in Mexico and Central America), Rodolfo García Zamora, Research Professor of Economics at the Universidad Autónoma de Zacatecas, outlines a vision for an alternative project for integration of the Americas that also draws heavily on the European experience, but adds a distinctly Latin American twist.

As García Zamora notes, over the last twenty years Mexicans and Central Americans seeking jobs have found migration as one of the few options. With few economic opportunities in their home countries, Latin Americans are increasingly making the journey northward to find employment as documented and undocumented workers. This significant growth in migration has led to a vast influx of remittances, that is, money sent home by immigrants to support family members in the region. Remittances to the Latin American region have surged to nearly 30 billion dollars in recent years. In some countries, remittances constitute the largest source of foreign investment. Beyond their monetary value, remittances show the commitment and economic impact immigrants have on the people and communities they leave behind. Although these funds have helped ensure the survival of many families and local communities, they have little impact in counteracting the larger economic trends that work against local economic development.

While calling attention to the possible pitfalls of development models that rely on remittances, García Zamora calls on governments to recognize and value immigrants’ efforts to foster development by providing a more supportive policy context. García Zamora proposes that an alternative regional integration project for the Americas would not just draw on the lessons of the EU, but fully incorporate the social capital that has been created by immigrants and their organizations. García Zamora cautions though, that immigrant organizations face a number of challenges if they are to achieve their potential as change agents in the region. One serious obstacle they face is in gaining the necessary capacity to effectively diagnose and address the development gaps in their own communities, both in the U.S. and in their countries of origin.

Anderson and Cavanagh note that the recent EU growth from 15 to 25 member nations offers a living laboratory for examining policies aimed at integrating heterogeneous economies. This experience should provide particularly useful lessons for the Americas, where enormous disparities exist both between the United States and the rest of the region, and within Latin America itself. A country like Nicaragua, with per capita income hovering at about $400 a year and little industrial capacity could hardly be expected to have identical needs or challenges to integration as Brazil or Mexico, for example.

Both García Zamora and Anderson stress a few key lessons from the European experience that could form the basis for a more comprehensive approach to regional integration in the Americas. These elements include planned investment, technological assistance, institutional changes, and shared accountability, along with social and environmental protections. García Zamora also highlights the unique advantage of bi-national social capital that immigrants have already begun to use in addressing the economic and social disparities of the region. This social capital must be strengthened and reinforced as part of an alternative path to hemispheric integration. This effort reflects the underlying rationale for all our work: to move towards dignified, equitable and sustainable ways of life for communities throughout the Américas.

Documents:

“Migración Internacional, Tratados de Libre Comercio y Desarrollo en México y Centroamérica” by Rodolfo Garcia Zamora, Research Professor of Economics at the Autonomous University of Zacatecas. Full text (39 pp) available in Spanish at www.migracionydesarrollo.org

“Lessons of European Integration for the Americas,” by Sarah Anderson and John Cavanagh, Institute for Policy Studies. Full text available at www.ips-dc.org