9 Economic Development in Mexico to Address Illegal Immigration

Summary
The United States (US) spends billions of dollars each year to keep Mexicans and Central Americans out of our country with mixed results and this strategy only addresses a symptom of the problem.  The root of the problem is that there is a huge income and wealth disparity between neighboring countries that is not being addressed.

ProMex Group is a model of another approach to address illegal immigration.  It is a charitable 501(c)(3) non-profit microfinance organization working in the northern border cities of Mexico.  It strives to alleviate poverty and economically forced migration by providing disadvantaged Mexicans with access to capital and education to start and grow small businesses.

Immigration Motivation
There are an estimated half million illegal entries into the United States each year.1  People primarily illegally immigrate to the US because of the income opportunities that can improve the quality of their life.  The annual median household income in the US is about US $31,000, in Mexico it is $5,000,2 and in Nicaragua, Central America, it is $1,080 per year.3  The minimum wage in Arizona is $7.80/hour,4 in Mexico it is about $5/day,5 and in Nicaragua it is $2/day.6  Until the income gap closes, there will continue to be a strong incentive to immigrate north.

In northern Mexico, incomes are relatively low but costs are comparable to the US.  Rent along the border is among highest in Mexico.  Many products, including clothing and electronics, are much cheaper in the US than in Mexico.  Many Mexicans cross the border to shop in the US, if they qualify and can afford a tourist visa.  Utilities (water, electricity, and fuel) are more expensive than in the US.  Many of the poorest along the border live on dirt roads; have no running water or infrequent water; and have homes made of block, corrugated metal and wood sheets.  They have no heat or air conditioning which is a challenge in the hot summers and cold winters of the high desert.

US Response
The US combats illegal immigration by spending an incredible amount of money to militarize the 1,900 mile border with Mexico.  The 2012 budget supports 21,370 border patrol agents making it one of the largest law enforcement agency in America. The Border Patrol’s annual budget is $3.55 billion.7  The total budget for Immigration and Customs Enforcement (ICE) for fiscal year 2013 is $5.3 billion.8 In 2012, the Department of Homeland Security is budgeted to spend over $528 million for fencing infrastructure and technology.9

The estimated cost of maintaining the proposed 661-mile double-layered fence along part of the Mexico-US border over the next 20 years is $6.5 billion, according to the Government Accountability Office.10  That’s $325 million/year.

The increased border security has resulted in about 239,523 illegal immigrant detainments in 2012.  Apprehensions result in costs to process and to incarcerate the immigrants.  Migrants are generally retuned to the Mexican border and many try crossing again.  The cost for funding 33,400 detention beds was $158 million in 2012.9

Effectiveness
There are about 12 million undocumented immigrants in the US.11  However, about 45 percent of illegal immigrants came here on a legal visa and then overstayed that visa.  The huge cost for controlling the border does nothing to address overstayers.12 Again our policies and a militarized border only partially address illegal immigration.

With increased border defense, people are forced to cross through dangerous desert and mountain paths.  Estimates of the death toll range from 3,861 to 5,607 in the last fifteen years.  Estimated death counts range from about 300 to 800 per year, depending on the year and the method of counting.13, 14

For many Central American migrants, the journey starts with a very dangerous ride on the tops of freight trains through Mexico referred to as “the train of death.”  They face growing dangers from the drug cartels kidnapping, assaulting and robbing migrants.15  Many die due to fatigue, dehydration or attempting to board the train while it is moving.  Thousands have fallen under the wheels and lost legs, arms or both.16

The US spends billions of dollars each year to keep people out compared to very little for providing economic opportunities in Mexico for the people we return or to prevent people from wanting to cross illegally.

Another Approach
We are not suggesting that the US eliminates border security.  We understand that an uncontrolled border could be a security concern, more people would illegally cross to work in the US  and drugs crossing into the US would increase.  However, directing some effort and funding towards economic development in Mexico would provide opportunities to improve the lives of those who might otherwise be desperate enough to cross the border.  It could be a more cost effective way to reduce the number of people illegally crossing the border and provide a humanitarian image for the US in the region.  Instead of only using military tactics to keep people out of our country, we would be helping people stay where they want to stay, with their families in their countries.

One model organization that is working to alleviate poverty and economically forced migration along the Mexican border is ProMex Group.  ProMex Group is sustainable which means that the relatively low interest that is charged on the loans covers the operating costs.  Hence, an initial investment to a charitable finance operation will continue to help people indefinitely.  Capital is only needed to grow the operation, not to sustain it.

ProMex Group has been working on the Mexican border since 2004 and endorses the Smart Campaign’s Client Protection Principles17 (keeping clients first in microfinance).

Credit is very expensive in northern Mexico, especially for people without steady employment or collateral.  Pawn shops provide loans with collateral of 8-15% interest per month.

ProMex Group is working on economic development in northern Mexico – to provide people with an alternative – using the following 5 strategies:

  1. Micro Credit.  We provide small loans to help start or grow businesses.  No collateral is required. Groups of 10-15 use the other members to guarantee their loans.  Groups meet every two weeks to make a small payment and support each other.  No one gets an additional loan unless everyone in the group pays their loan.  Loans start at $200 and progress up to $1,000 per group member. Repayment rates exceed 95%, which is higher than the credit card repayment rate in the US.
  2. Small Business Loans.  We provide below market rate loans to small businesses to help them grow.  We recognize that not everyone is ready or able starting their own successful business.  These small loans are for growing small businesses that provide employment in the construction and agriculture sectors.
  3. Micro-Savings.  We provide a secure way to save to help clients with uneven incomes, unexpected expenses, and business growth.
  4. Education.  We give small business, personal finance, and health classes to clients and the communities where we work.
  5. Free Health Services.  One of the biggest setbacks our clients face is from health problems and the health of their families.  ProMex Group has a clinic that provides education, referrals to services that are available in the communities, and free tests that include: blood sugar (for diabetes), AIDS, Pap smears, Syphilis, blood pressure, and mammograms.

People Benefited
Here are a few examples of clients being benefited by ProMex Group.

Engracia Guzman-Cruz migrated to Nogales, Sonora from Oaxaca in search of a better life. She escaped starvation but found poverty, ultimately working for about eight dollars per day in one of the many assembly plants found in northern Mexico.  Engracia is a seamstress and with her first loan of $200, she began her dream of owning her own sewing business.  Successive loans ranging from $400 to $1,000 helped Engracia purchase specialty sewing machines that cut and sew, do embroidery, and manipulate denim. She makes school uniforms, wedding and first communion dresses, and some adult clothing.  Engracia’s life is still difficult but it has improved greatly since she began participating in the microcredit project.   Her family now has adequate supplies of food, basic medical care, her two kids now go to school, and, above all, she has hope for the future.

Lucila Delgado is originally from Sinaloa, Mexico.  She has received loans from the ProMex Group since 2007 and her current loan is for $1,000.  She uses her loan to buy new clothing in stores on the US side of the border to sell at a swap meet.   She has a husband and two kids (ages 3 and 10).  She now has three times the number of booths at the swap meet.  When asked how the loans most benefitted her, she responded that she is able to have a larger inventory which generates more business, has been able to afford basic home improvements and healthcare for her family is better.

Teresa Garcias runs a small grocery store (a miscellaneous store).  She buys products in bulk and sells them in her neighbourhood.  She has been living in Nogales for 19 years and started working with ProMex Group in 2006.  Her current loan is for $1,000.  She has a husband and two kids.  She buys products and sells them with a 25-30% increase.  Her monthly profits are about $400 after rent and expenses.  She said that a benefit of her loan is that it provides cash flow to allow her to stay in business when sales were down.  Her increased sales have allowed her to send one child to private school.  Private school classes have about 25 children per class compared to public schools which have about 45 children per class.

Jesus Brigido is originally from Puebla but has lived in Nogales for 27 years.  He has been with ProMex Group project since 2010 with a current loan of $1,000.  He has two employees (his brother and another man) at his bakery and produces about 6,000 pieces of bread each week.  Sales are about $160 a day or almost $4000 a month.  He makes $300-$400 a month profit.  The building does not have heat, air conditioned, or running water which is typical in this part of Nogales.  Loans have helped him purchase the property on installments, buy a bread mixer, bridge cash flow shortages and feed his family better.

There will always be people searching for a better life and crossing into the US to achieve it.

We would like to encourage some proportionate support for economic opportunities in Mexico to allow potential illegal entrants an alternative.

Support ProMexGroup.org
If you support economic development along the Mexican border, consider supporting ProMex Group.

  • Donations are tax deductible
    Mexican US border region is undeserved – all of the clients and staff are mexiccan
  • Your money will be in the hands of a successful microfinance organization with experience, professional management and audited books to guarantee that the funds are used appropriately
  • ProMex Group is sustainable – the low interest charged covers all operating expenses.  So a $200 contribution to ProMex Group will help three individuals per year indefinitely.
    it builds entrepreneurial skills of enterprising people
    help Mexican citizens succeed in Mexico
  • Microfinance is the most effective antipoverty intervention ever developed – your dollars go further to eliminate poverty
  • Your dollars help provide success, pride, hope and dignity

Please contact ProMex Group for more information.

Sincerely,

Bill Holliday, CFP
Executive Director
ProMex Group
PO Box 65962
Tucson, AZ 85728
520-979-2213
bill@promexgroup.org
www.promexgroup.org

References

  1. 1 “Modes of Entry for the Unauthorized Migrant Population”. Pew Hispanic Center. May 22, 2006. Retrieved February 2, 2011.
  2. Society at a Glance 2011 – OECD Social Indicators, OECD, 12 April 2011.
  3. World Vision, http://www.worldvision.org/our-work/international-work/nicaragua
  4. US Department of Labor. www.dol.gov/whd/minwage/america.htm 1-1-2012.
  5. “Salarios mínimos 2010″. Sat.gob.mx. Retrieved 2010-11-09
  6. 2008 Country Reports on Human Rights Practices, United States Department of State.
  7. US Customs and Border Protection http://www.cbp.gov/linkhandler/cgov/border_security/border_patrol/usbp_statistics/budget_stats.ctt/budget_stats.pdf
  8. Department of Homeland Security 2013 budget http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/homeland.pdf
  9. Department of Homeland Security FY 2012 Budget-In-Brief http://www.dhs.gov/xlibrary/assets/budget-bib-fy2012.pdf
  10. Robin Emmott, Global News Journal, Oct 2, 2009, http://blogs.reuters.com/global/2009/10/02/borderwallcosts/
  11. Pew Hispanic Center Factsheet PewHispanic.com, April 26, 2006
  12. National Public Radio http://www.npr.org/templates/story/story.php?storyId=5485917
  13. Humanitarian Crisis: Migrant Deaths at the US -Mexico Border, Maria Jimenez, 10/1/2009 http://www.aclu.org/files/pdfs/immigrants/humanitariancrisisreport.pdf
  14. “Border-Crossing Deaths Have Doubled Since 1995; Border Patrol’s Efforts to Prevent Deaths Have Not Been Fully Evaluated” (PDF). Government Accountability Office. August 2006. p. 42.
  15. Despite danger, Central Americans migrate through Mexico, Catherine Shoichet, CNN, 5/19/2011 http://articles.cnn.com/2011-05-19/world/mexico.migrants_1_illegal-immigrants-mexico-s-national-commission-andrew-selee?_s=PM:WORLD
  16. CNN World, http://articles.cnn.com/2010-06-23/world/mexico.train.death_1_migrants-train-la-bestia?_s=PM:WORLD
  17. http://www.smartcampaign.org/storage/documents/20110802_Client_Protection_Principles_FINAL_.pdf

 

If you support creating economic opportunities along the Mexican border (in Mexico), consider supporting ProMex Group (charitable microfinance for the Mexican border).  You can Donate, Lend, Donate items (especially computers), allow us to Speak and Visit the project.  Please contact us for more information.

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2 thoughts on “9 Economic Development in Mexico to Address Illegal Immigration

    • Invertiendo en microcredito en Mexico tiene algunos riesgos. No es igual a una invercion en un banco en los EEUU. Todo es en pesos Mexicanos, todo es en el norte del pais, no esta segurado como los bancos en los EEUU (FDIC), … Pero hasta ahora (en 12 años) no hemos perdido nada de dinero para nuestas invercionistas. Es una invercion para ayudar a otra gente que necesitan ayuda.

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