Preventing Illegal Immigration

Summarized from article on immigration issues by Tim Padgett in Oct. 15, 2007 America magazine.

Internal reforms in the local economy of Mexico are a much more effective means of preventing illegal immigration to the US than law-enforcement approaches to border policing by the US, according to Mexican journalists and policymakers. Even the conservative president of Mexico, Calderon, was so strongly challenged in the 2006 elections by leftist Andres Manuel Lopez Obrador, that Calderon had to co-opt some of Obrador's rhetoric in order to win.

Microcredit, small business loans to the most remote and economically depressed regions, got a boost when Bangladeshi micro-credit guru Muhammed Yunus won the Nobel prize for economics. It fills a great need in Mexico. Banking and credit resources are sparse there; in the developed world, there are usually fewer than 2000 people per bank branch, but in some Mexican states like Oaxaca, the number is 38,000. And Mexico's banks virtually shut out small enterprises with exorbitant interest and lots of red tape. Though the country's financial system is one of the hemisphere's largest, it actually loans very little to its own economy, and virtually none in the rural areas where most illegal immigrants come from.

Many of those immigrants are now doing what old-line banks won't: pooling funds to start micro-credit banks to help fund local businesses that allow residents to work at home instead of travelling to the US to make a living. 95% of the loans made by a microbank in Santa Cruz Mixtepec, in the southern Oaxacan mountains, have been repaid on time so far.

The sorts of businesses funded by these microloans include a metal window-frame shop, tomato greenhouses, and other products which local consumers can utilize. Thus, profits are not drained away to overseas multinational corporations, but instead reinvested in other local concerns, and these loans have a ripple effect throughout the local economies, in contrast to US-free-trade-policy-supported border-dwelling, polluting maquilladoro factories. NAFTA has failed as a solution to illegal immigration because the wealth it creates does not flow through Mexico's economic bloodstream and create incentives for Mexicans to stay home. A multi-billion-dollar fence might make xenophobes feel safer, but the money would be better channeled into foreign aid for the microbanks loaning to small businesses in the interior of Mexico, and to pressure the Mexican government to help, too.