Immigrants Tapped to Fund Jobs in Mexico

Seeing the potential to stem immigration, California officials are checking out economic development efforts in Mexico that tap immigrants here to finance jobs in their homeland.

Assembly Speaker Antonio Villaraigosa on Thursday took a detour from his trip pressing the flesh of top Mexican officials to swing by the Jaliscan pueblo of Etzatlan and examine furniture and clothing manufactured with the help of funding by immigrants in the United States.

The micro-enterprises are financed by one of a handful of fledgling economic development funds that harness immigrant dollars in Jalisco, Oaxaca and other Mexican states. The Jalisco fund takes a small percentage of the billion-plus dollars sent home annually by Jaliscan immigrants in the United States. Funds in other Mexican states also receive investments from hometown associations here. All are matched with Mexican government dollars.

Although money sent home by immigrant families or hometown associations in the U.S. has long gone for consumer goods or social uses such as repainting the town church, recent efforts--Jalisco’s among them--are directing funds to job-creating activity that could eventually stem the flow of immigrants north, say academics and politicians who have tracked the trend.

Now, Mexican officials and academics on both sides of the border want to get California involved. Jaliscan state officials say they plan to ask the state of California for contributions to the fund. And another proposal by UCLA professor Raul Hinojosa calls for state tax breaks for corporations that contribute, and state help for Jaliscan hometown associations here to obtain nonprofit status and raise money. Hinojosa helped create the fund and a similar one in Oaxaca and is traveling with Villaraigosa.

“The important thing is in this era when people want to do something about immigration, this is a smart and effective way of doing that--raising the economic development in these areas so people aren’t coming to the U.S.,” Villaraigosa said Thursday.

Immigrants from the states of Zacatecas, Guanajuato, Michoacan, Jalisco, Oaxaca and Puebla have supported low-wage industries in the United States for years, but left many of their hometowns crippled.

More than $5 billion annually has flowed back to their hometowns in the form of family remittances, and immigrant groups here have committed further funds for community projects. But the towns have remained largely devoid of industry.

The logic of the new approach is simple: Harness the flow of dollars, boost it with matching contributions from Mexican state and federal authorities--and any other willing source--and direct it to job-creating projects.

Jalisco Governor Alberto Cardenas Jimenez put it this way on a visit to Los Angeles this week: “There are jaliscienses here who can now come back home. The idea of immigrating here and staying forever isn’t that firm anymore and that’s what we want--to create opportunities with the state of California that give people choices.”

The Jalisco economic development fund launched last year works like this: Raza Express, a Mexico City-based money transfer company, contributes 75 cents to the development fund for each $300 sent to Mexico. So far, it has chipped in $50,000 to the fund, which has received $500,000 from the state of Jalisco. The fund is part of a bigger micro-enterprise program that has created 15,000 jobs.

Raza Express operates in Washington, New Jersey and Florida and is awaiting licensing in California. The Jalisco fund also is slated to receive aid from the North American Development Bank, a binational bank created to ease the negative impacts of the North American Free Trade Agreement, Hinojosa said.

In addition to money transfers, the Jalisco hometown associations in Los Angeles--which number about 50--are expected to begin contributing to the Jalisco fund soon--an amount the Mexican state plans to match, said Luis Escala, a UCLA graduate student who works with the groups.

Other funds also draw on investment from hometown associations. Oldest among those is a Zacatecas program, which matches government funds with investment by Zacatecas hometown associations. The program is now shifting its focus toward job-creation endeavors, Hinojosa said. And in Guanajuato, a state program encourages immigrants abroad to invest in maquiladora plants in impoverished towns. The investments are matched by the government, and the immigrants become shareholders.

The most recent fund, in Oaxaca, is administered by a binational network with membership in Los Angeles and Oaxaca.

Advocates for California involvement in the Mexican funds say participation could be modeled on a Florida organization that receives about $500,000 in state funding annually. The organization--the Florida Assn. of Voluntary Agencies for Caribbean Action--was crafted in the 1980s by then-Governor Bob Graham--now a U.S. senator (D-Fla.) to bolster economic development in Central American and Caribbean nations.