What the Governments of Mexico and Central America Can Do (or Stop Doing) to Help Potential Emigrants

An open letter.

If you’re indignant about American immigration policy because you care about people whether they be Americans, immigrants, or both, here’s something you should be even madder about: the emigration policies of our neighbors to the south from which most illegal immigrants come.

Emigration may not be the stated purpose of such harmful policies, but it is nonetheless a direct effect.

We rarely speak of a government’s emigration policy, at least not in the sense I employ the term here. I’m referring to the policies of a government that depress growth and deny people economic opportunity, which then prompts people to want to leave for greener pastures. Emigration may not be the stated purpose of such harmful policies, but it is nonetheless a direct effect.

Nearly everybody who illegally crosses the Mexican border into the U.S. does so because they desire work. They want a better life than what they can expect back home. Very few come with the intent of securing public welfare or committing a crime. Most would prefer to remain in their homelands if comparable opportunities—or even just a realistic hope for them—existed there.

While there are plenty of policy changes I favor right here in the U.S., I’m starting to get tired of foreign politicians lecturing America about immigration. Their protests would carry more weight if they cleaned up their own acts. With that in mind, I offer the following open letter to the leaders of Mexico and the nations of Central America. My principal sources for the data cited herein are the World Bank’s Ease of Doing Business Index and the Heritage Foundation’s Index of Economic Freedom.

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To Whom It Should Concern (Even If It Doesn’t):

I am an American who wants the best for all people, just as much for the good men and women of your country as for those of my own. I assume you would say the same.

It’s time you put your policies where your mouths are. Any normal human being would want his own country to be so prosperous that few of his fellow citizens would desire to flee. So what are you waiting for? Let’s take a glance, one country at a time, at what your respective governments are doing in this regard.

Mexico

You’ve made some good progress in recent decades, growing the size of your economy by a factor of four since NAFTA was launched in 1994. You’ve implemented reforms to encourage competition, modernization, and investment.

But for crying out loud, you’ve got a man running for president who openly urges Mexicans to leave. Polls show him with a wide lead. What kind of leader tells his people to get out? He doesn’t sound like someone who knows how to fix the problem.

Considering he is a far-left populist demagogue, it’s obvious he doesn’t.

The ease of doing business in Mexico, ranked #49 in the world, is the best in the region, but you could still do much to improve it. The U.S. is #6, Canada is #18, and even Kazakhstan, Rwanda, and Belarus are ahead of you.

Examine the half-dozen freest economies in the world: Hong Kong, Singapore, New Zealand, Switzerland, Australia, and Ireland. There is no mass exodus problem emanating from any of those places.

Examine the half-dozen freest economies in the world: Hong Kong, Singapore, New Zealand, Switzerland, Australia, and Ireland. There is no mass exodus problem emanating from any of those places.

Corruption and violence are major deterrents to business in Mexico. Our futile drug war is partly to blame for that, so I’ll happily join you in urging all parties to call for a halt to it. But short of the moral renaissance you ought to personally lead, I’ll bet payoffs, kickbacks, theft, and protection rackets would still be commonplace in Mexico.

Sixty-two countries are ranked ahead of you on the Index of Economic Freedom. You and your neighbors to the south should learn from Hong Kong, #1 on the list, where economic freedom and amazing prosperity are joined at the hip. Your model should be John James Cowperthwaite, not some socialist theoretician who has never created a job or a business in his life.

What are you doing to inform your people about the direct relationship between how free an economy is on the one hand and how high the standard of living is on the other? You’ll have to answer that— because I can’t.

Guatemala

You’re a bleak #73 on the Index of Economic Freedom and a dismal #97 on the Ease of Doing Business Index. You should know better. Within your borders resides one of the finest universities in the world, Universidad Francisco Marroquin. Sit down with its economics faculty, and they’ll tell you— for free!—why and how you need to lighten up on big government and liberate your entrepreneurs.

Consider shoring up property rights and the rule of law. According to the Heritage Foundation:

“Guatemala has a system for registration of real property, but defects in titles and ownership gaps in the public record can lead to conflicting claims of land ownership. The judiciary is hobbled by corruption, inefficiency, capacity shortages, and intimidation of judges and prosecutors. Corruption and mismanagement remain widespread, especially in the customs and tax agencies.”

How can you expect your people to take risks and be entrepreneurial if you make the trade and tax environments onerous and unpredictable?

Did you catch that last part—corruption and mismanagement in the customs and tax agencies? You’re in charge of that. You’re directly responsible for it. How hard can this be? How can you expect your people to take risks and be entrepreneurial if you make the trade and tax environments onerous and unpredictable?

Belize

Oh my gosh, everything I just said about what’s wrong in Mexico and Guatemala applies to you in spades. At #116, your Index of Economic Freedom ranking is the worst in the area. Even Gabon and Tajikistan have got you beat.

At #121 on the Ease of Doing Business Index, one has to be especially brave, masochistic, or outright dumb to risk starting an enterprise in your country. You’re drowning your entrepreneurs in red tape, paperwork, and stupid rules.

Your average tariff rate is ten times that of Mexico’s. Have you guys never read Adam Smith or Frederic Bastiat?

The Heritage Foundation says “Transparency International is unable to access enough data to include Belize in its annual Corruption Perceptions Index.” Too corrupt to be included in a corruption index? How did you manage that one?

Price controls are for economic illiterates, but you impose them on basic staples like rice, sugar, and flour. They never work because they flout the most elemental economic law of supply and demand. My students learned that in the first week of Econ 101.

Your bureaucracy is huge, stifling, and mostly worthless. Dismantle it.

I visited Belize 22 years ago, snorkeled at Ambergris Caye, and camped at a jungle resort on the mainland. But I’m not coming back until you politicians get off the backs and out of the way of your own people.

Honduras

So far, as I move south, things aren’t getting much better. You’re #115 on the Ease of Doing Business Index and #94 on the Index of Economic Freedom.

Astonishingly, about 80 percent of the ostensibly private land in Honduras “is either untitled or improperly titled,” and the resolution of title disputes in court “often takes years,” according to Heritage. Can you please fix this?

Private property is an indispensable building block of economic prosperity. If it’s not yours, you don’t take care of it. It’s that simple. Come on, people.

El Salvador

Well, what can I say but that you’re better than Honduras? You’re at #73 on the World Bank’s index and #75 on Heritage’s.

What’s with the massive hikes in the minimum wage in the past couple of years?

You cannot make a person worth a certain amount by making it illegal to pay him any less. You simply price out of work the low-skilled and least-experienced.

You cannot make a person worth a certain amount by making it illegal to pay them any less. You simply price out of work the low-skilled and least-experienced.

You’re up to your eyeballs in populist welfare, price controls, corruption, debt, and deficits. Except for the price controls, that sounds vaguely familiar to those of us here in the U.S. But at least we feel bad about it.

Nicaragua

Now we’re back in the soup again. At #131, your Ease of Doing Business ranking is the worst of every country between the U.S. and Colombia. Your Index of Economic Freedom number is second-worst at #100. You have a revolution underway, but for the moment, you still have a president who uses every opportunity to undermine republican government and ensure that he and his wife maintain perpetual power. He co-founded the Marxist Sandinistas and is still in love with Venezuela’s dead socialist dictator, Hugo Chavez. Doesn’t that tell you something?

No wonder people want to leave this place. If every Nicaraguan moved to Uganda, they’d be 17 points up on the Economic Freedom Index. Shame on you.

Costa Rica

Not bad, but not as good as Mexico. The World Bank says you’re #61, and Heritage indicates you’re #57. At least you have more political stability than most of your neighbors, but if Botswana and Vanuatu can make it into the Top 40, so can you.

Panama

At #54, your Index of Economic Freedom rank is the best of all the countries on my list here. According to the World Bank, you’re ranked #79, which means your very nice canal isn’t enough to make things easy for new businesses. See the recommendations above, and work on those.

I further suggest that you take a look at my “Seven Principles of Sound Policy.”  Get those principles right, and you’ll be amazed at how much farther up the ladder you can go.

Stop Getting in the Way of Your Own People

Stop glorifying poverty. Use your power to get governments out of the way of people who want to work and invest their way out of it. Speak often against envy, power lust, and dependency.

All of you are from countries where the Catholic Church still exerts considerable influence, so I wish to implore the leaders of that faith to stand up for the rights of people to create wealth and own property. Stop glorifying poverty. Use your power to get governments out of the way of people who want to work and invest their way out of it. Speak often against envy, power lust, and dependency. And please understand that while Pope Francis may be a socialist, Jesus wasn’t. It says so right here.

The numbers may seem a little sterile, and my crude attempt at a little humor to make a point may come off as cavalier. Make no mistake about it, though:

When any government makes it harder for its citizens to start a business, engage in trade, make plans for the future, control their own property, or settle a dispute fairly, it means economic suffering—needless, personal, material suffering. It’s also the source of so much of the crime and violence in these countries. My heart bleeds for the poor people of this region who pay an awful price for big, lousy, intrusive government and the wrong-headed ideas behind it.

The verdicts of economics and history are clear and inescapable. If you stand in the way of enterprise, you push people down and out. In this modern age, there is no good excuse for any failure to understand that—whether you’re a Central American or a North American.

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