While hotly debating U. S. immigration policy, no one doubts that the public policies of Mexico are at least as important in resolving the immigration crisis in this country as any we adopt here. This is what makes the upcoming presidential election in Mexico critical for the future of this problem and at this point a beneficial outcome there seems iffy at best. If the winner is a leftist in the mold of Venezuela’s Chavez, all bets are off, and a return to power of the PRI wouldn’t be much better.The 2006 Index of Economic Freedom, published by the Heritage Foundation and the Wall Street Journal, is instructive in terms of the policies necessary for Mexico to close the economic gap with the U. S. and decrease the incentive for illegal immigration. The annual report surveys 157 countries, grading such things as property rights protection, regulatory environment, tax rates, fiscal policy, government intervention in the economy, monetary policy, and trade policy. Currently, there are nineteen countries in the “free” category, with the U. S. ranked ninth overall. Mexico is in the “mostly free” category and ranks sixtieth overall (of 71 countries in the free or mostly free categories). The gap between these two categories is huge—an average GDP per capita of over $30,000 for the former versus $13,000 for the latter—which is a big reason for the huge incentive to cross national borders illegally. So what does this mean for American policy? Should we attempt to influence the Mexican elections? Absolutely not. However, we can and should make it clear that certain changes in their economic policies will be necessary in exchange for such things as our willingness to continue to accommodate their poor and unemployed who cross on a legal basis as guest workers, our willingness to allow the current illegal population to find a pathway to U. S. citizenship, and the degree to which we begin levying a remittance tax on their legal and illegal workers in this country. What policy changes should we suggest? That should be pretty easy—just look at the economic freedom survey and pursue policies that reverse the negative scores on the current policies that are drags on freedom and growth. And I would add one more mandatory policy change, suggested by Irwin Stelzer in The Weekly Standard—remove the ban on foreign investment in Mexico’s oil industry. Nothing would free the patrimony of Mexico’s poor and underemployed to create economic growth, not to mention enhancing an alternative to Middle Eastern sources, more than opening Pemex to American capital and oil and gas production expertise. Is this a form of early twentieth century “gunboat diplomacy” by other means? Maybe so, and Teddy Roosevelt would not have hesitated to use it.
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