Private Companies Pledge $1.2 Billion in Investments to Central American Northern Triangle
Vice President Harris: The people of El Salvador, of Guatemala, of Honduras, they usually leave for one of two reasons, not because they want to, but either because they are fleeing some harm, or because they simply cannot satisfy the basic needs of themselves or their family if they stay.
Melissa Harris-Perry: This is Vice President Harris on Monday afternoon during a White House event. Her analysis is consistent with results from a recent Migration Policy Institute report. It's unique in-depth analysis of the complex reasons for regional displacement and migration across Central and South America. The report finds, "Violence, insecurity, and natural disasters have been complex and long-standing triggers of migration, but economic factors were participants' primary motivation for desiring to emigrate."
Now, back in March, President Joe Biden assigned the Vice President to lead the administration's response to migration at the southern border, with a specific focus on addressing the root causes leading so many to move across national boundaries. In response, Vice President Harris has been corralling private American companies to invest in El Salvador, Guatemala, and Honduras, or the Northern Triangle with the goal of jumpstarting sustainable growth in these local economies.
On Monday, in an event co-hosted by the State Department and the US Chamber of Commerce, in collaboration with the Partnership for Central America, the VP announced that her office has secured $1.2 billion in private investments for the region.
Vice President Harris: The work of this group of leaders in this call to action has been the work of addressing one of the main reasons that they leave, and that is the lack of economic opportunity if they stay at home.
Melissa Harris-Perry: Okay, that's the top line, but dig down in the White House press release announcing some of the details of these new investments and you'll discover some very big names offering some very, let's call them modest and indistinct investments. There is Microsoft, a company whose third-quarter revenue was $45.3 billion. Apparently, they have, "Catalyzed the development of digital access training centers." Okay.
There's MasterCard with just under 5 billion in third-quarter revenue. The White House brief indicates that, "MasterCard has partnered with Walmart to enable access to credit for underserved citizens." Yes, PepsiCo is there. Now, their third-quarter beat expectations and came in at 20.19 billion in revenue. PepsiCo has promised to, "Spread regenerative farming practices across 7 million acres."
You may not immediately recognize the name Parkdale Mills, but the company based in my State of North Carolina is the largest privately-owned yarn spinner in the US. They make the cotton that becomes products for companies like Lands' End, Jockey and L.L. Bean. Now, that's more familiar, right? Parkdale Mills has committed to, "Build a new yarn spinning facility in Honduras, and to expand an existing one."
Together, these two facilities will likely create about 1,000 jobs. For a bit more context, according to reporting from Vox, 2019 foreign investment in El Salvador, Guatemala, and Honduras totaled about $2.2 billion. That same year, migrants from those nations who found work in the US sent back $22 billion in remittances.
Take a trip with me to a land of both shadow and substance of things and ideas, a place marked by my skepticism about the likelihood that MasterCard, Walmart, Microsoft, and PepsiCo are about to create more just, inclusive, and robust economies in Central America.
I'm Melissa Harris-Perry and on today's Takeaway, you've just crossed over into this side-eye zone. Oscar Chacón is executive director of Alianza Americas, who specializes in US Latin-American relations in migration. Oscar, welcome to the side-eye zone.
Oscar Chacón: It's a pleasure to be here with you, Melissa.
Melissa Harris-Perry: Now, is the Biden administration's approach here a step in the right direction, or is this just about big companies expanding the profits with low-wage workers?
Oscar Chacón: Well, ironically, I would say it's both. It's a very, very minor step in the right direction, but there is no question in my mind that in the end, we are essentially replicating what has been part of the problem in Central American countries, specifically Honduras, Guatemala, and El Salvador namely.
The problem with direct foreign investment is that it's been very, very small that it basically reinforces the very economic basis that have allow for so many people not to be able to fulfill their basic aspirations for a decent way of life, raising families with a degree of prosperity.
That is what I'm afraid this particular initiative may not help [inaudible 00:05:43] simply because there are no reasons to suppose that this is going to come out any different than in the past we have seen.
I believe that one of the challenges for the US is that they need to understand that the necessary measures will require, among other things, to really identify a new set of rules and a new set of players for direct foreign investment to actually have a chance to make an impact, and ultimately change the way these countries have functioned, sadly, for more than two centuries.
Melissa Harris-Perry: When you make that point about repeating the kinds of investment we've already seen there, I mean, I have to say, I was a little gobsmacked about the garment industry or the yarn spinning in Honduras, in part because I mean, American college students were organizing against multinational corporations, like Nike for their labor practices in Honduras just a decade ago.
Now, we have the White House actually celebrating what appear to be very similar jobs as though they are a meaningful departure.
Oscar Chacón: I agree with you. I mean, I think that it's very interesting to look, you know, from my longer timeframe to foreign investment. I recall very well that back in the 1970s, US corporations that came to invest in Central American countries actually got in trouble with the local economic elites because they wanted to pay better wages. They actually wanted to give more benefits to workers, but local economic elites would basically say, "You are absolutely doing the wrong thing.
You are making these people become too lazy, you're giving them too many perks, and you need to do business the way we do them." The way they do business, ironically, today is the way global corporations tend to operate at a global scale. It is because it ensures much more profits at the end of the day.
I think that that is, again, one factor that would need to change very dramatically if we are to see countries like this ever become places where people truly don't want to leave from because they are places that are pleasant, places where people can actually provide a dignified way of life for themselves and their children. That's not what is happening now and I don't have any reason to assume that what I just announced will actually point us in any different way.
Melissa Harris-Perry: I'm also interested in why the Biden administration has accepted the premise that US interests are best served by actually curbing migration to the US. The same policy report that I talked about a bit earlier actually suggests that one of the ways to improve the economies in Central American countries is actually to expand legal pathways for Central Americans to migrate into the US basically on short term legal work visas.
Since the remittances are 10-fold more than the investment to actually allow those remittances to flow, but to have them flow to public works projects rather than simply to individual households. Of course, that would create more incentive to migrate to the US, but that could be good for the US. I guess I'm wondering about this idea that closing the border is what's best.
Oscar Chacón: Well, you are absolutely correct. I think it's important to understand the Biden administration has found itself completely trapped by a desire to do things differently when it comes to how to handle migration. At the same time, refusing to once and for all divorce from a narrative that has painted migration and migrants as some evil that we need to neutralize.
If you look at the facts, migration has been vastly positive for the United States of America. If you just looked at remittances, it's been also pretty good for thousands of households in Central American countries that are the recipients of these remittances that are sent from the US. The first thing that we should do is not to assume that bringing more foreign investment and fundamentally changing the economic rules in this country is something we need to do so that there is no migration. The fact is we have been the largest beneficiary of migration from these countries, Mexico included, but we need to also understand that the drivers towards making life better in these countries should not just be stop migration because I really believe that that's the wrong approach.
I believe that one more powerful reason for why we should be indeed casting a different economic approach in Central American countries is because of the larger changes in geopolitics. You have now China and Russia absolutely looking at these countries as places where they want to gain more influence.
A larger, more important question for the US should be what can we do as the largest power in this hemisphere to absolutely make ourself a better proposition to countries like this, other than what China or Russia may be pushing through? Let's be frank, those other countries don't have any problem working with dictators if that's the partnership that they consider better for their interests.
Melissa Harris-Perry: Obviously, there are key economic reasons, but these political questions that you're drawing our attention to are absolutely crucial and I'm wondering about how is it that corruption or at a minimum-- so corruption may be at a maximum, but at a minimum, at least, anti-democratic or non-democratic governance in these nations also affects what this kind of private investment can even accomplish.
Oscar Chacón: To tell you the truth, I think that a lot of these private investors, which as you well pointed out before compared to remittances are a little dwarf, because they are so small, but they often use the very corrupt nature in these countries, the very sick ways in which economic elites and political elites have gone about handling foreign investment to their benefit. That is something that we must also strive to change.
Let's take the case of Honduras. Everyone knows that Honduras has become over the past 12 years essentially a narco-state but many foreign investors don't have a problem coming into Honduras, so long as they can get away with whatever they want. They don't mind working with corrupt politicians that are very known to be linked to narco-trafficking gangs throughout the hemisphere.
I believe that part of what we need to understand is that a lot must change if we are to see these countries become better places.
Melissa Harris-Perry: Oscar Chacón is the executive director of Alianza Americas. Thank you so much for your insight and your conversation today.
Oscar Chacón: It's been my pleasure.
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