Radnor Inc

Radnor Geopolitical Report

Nogales, Sonora, Mexico, August 2007



Strategic geopolitical intelligence for decision-makers





About Radnor

Radnor is a legislative relations and political consulting firm based in Washington, D.C. Radnor has affiliations across the world that allow us to accomplish our clients' objectives. We work with some of the largest businesses in the world as well as some of the smallest entrepreneurial firms and groups.

Radnor services fall into three areas:

1. Government relations services throughout the world.

2. Political counsel to candidates, parties and businesses.

3. Association and coalition management.

To learn more, please visit our web site.





Periodically, Radnor invites others to share their thoughts with our readers. We often agree but sometimes disagree with what our guests write. Nevertheless, we are always glad to learn. If you have something you would like our readers to know about, please email us.








Juanita weeps

by Ken Feltman

Without economic growth and job creation in Mexico, we won't be able to confront the migratory phenomenon.

- Andrés Manuel López Obrador (mayor of Mexico City and former candidate for president of Mexico

Juanita weeps as silently as possible. She does not want to awaken Andrés, just three months old and pitifully thin. Juanita is desperate. Her breast milk is drying up because she is spending the little money she has to feed her three year old son, Paulito. She realizes, perhaps too late she worries, that as she deprives herself to feed Paulito, she deprives Andrés, too.

Her husband, Paulo, had earlier known desperation. Without work in his mountain village far to the east of Mexico City, he left to find work in the United States. He was gone nearly six weeks before Juanita received the postcard letting her know that he was safely across the border. Illiterate in their own indigenous Indian language, Juanita and Paulo devised a plan of communication: They took from their scrap book a postcard purchased on their wedding trip to Tlaxcala, the regional capital, a small city of about 15,000 inhabitants.

They had a priest put Juanita?s address in Spanish on the card and bought a U.S. postage stamp. A month ago, Juanita received it and saw that someone had written a message. She could make out a few words. But she cried for joy when she saw the letters AZ in the postmark. She knew that was the symbol for Arizona, in the United States. Paulo was safely across. A month later and regularly thereafter, money followed, always from a place with the mark AZ.

The priest read the postcard and told her that Paulo had waited at the border in Nogales in the Mexican state of Sonora for several days until he found his chance. Then he had made his run for it and soon mingled into the multi-accented population of Nogales, Arizona.

Paulo's journey

Paulo hitch-hiked north to Nogales, a teaming community of about 300,000 on the border with Arizona. As he made his way north, he was robbed and beaten by three men who taunted him because he spoke little Spanish. Then, despite the difficulties of crossing with no identification, Paulo made it across on his first try, volunteering to carry some packages for an older couple who lived legally on the American side. Spanish was the everyday language in the small Arizona section of what the Mexicans call Ambos Nogales - literally, both Nogaleses. The Mexican part was definitely more vibrant, Paulo realized immediately. But he had made it across. Paulo found a letterbox and slipped the postcard inside.

Giving up the postcard made him feel even more homesick. Now he had nothing but his clothing and two crumpled five-dollar bills. He went to find work. He soon found men willing to help him get to Los Angeles or Chicago. They claimed that jobs went begging in those cities. But Paulo had no money to pay them. He could not buy a forged Social Security card or one of the many drivers licenses from places called Kansas, Virginia or New Hampshire. Paulo had heard of Virginia but was not sure where it was. Kansas and New Hampshire? What were they? Where were they?

Some men offered him a large amount in dollars if he would bring drugs across the border. But no one seemed to speak his language and his Spanish was limited and accented. He could not be sure what he was hearing. Paulo was afraid.

If you want to learn more about the distortion of markets because of ill advised government programs, just use a search engine.

Then Paulo made a fortunate decision. He went back across the border to Mexico. He found a man who guided him to a priest. The priest helped him with a meal, a few pesos and got him a job loading and unloading packages in a small assembly plant. Paulo was not earning the wages that a similar job across the border might pay. But he had a job and he soon went to the priest for help in sending money south to Juanita. Because he was ashamed to admit that he was not in America, he asked the priest to mail the money from the Arizona side. The priest understood.

In this instance, the church and hard work saved an infant from possible malnutrition. But this is not an article about the Roman Catholic Church. This is not about illegal or legal immigration. This is an article about America?s growing infatuation with ethanol. Ethanol? What?s ethanol got to do with Juanita, Paulo and their sons? Indirectly but surely, ethanol was the cause of their problems.

Costly tortillas and opportunistic dictators

As the U.S. rushed to produce ethanol last year, the price of corn rose rapidly from just over $2 a bushel in August to over $3 by December. Some of the increase was seasonal but by January angry Mexicans demonstrated in the streets against the rising cost of tortillas, the staple of the diet for most Mexicans. The price of corn translates much more directly to higher food costs for low income Mexicans. From a quarter to half of their income may go to feeding the family. The average American spends about seven or eight percent for food.

In a global economy any change in production or pricing by a large supplier will affect the weakest consumers most. The protesting Mexicans were part of a debate that went under reported in the U.S. but involved Cuba?s Fidel Castro and Venezuela?s Hugo Chávez, who charged that the U.S. was starving the poor to 'feed automobiles.' Even dictators have some correct ideas. Chávez is right this time. The higher price of tortillas is linked to American corn that is diverted to fuel.

If you want to forward this to up to five friends, use the Please forward to a friend link at the bottom of this newsletter. To send this to a larger list in your email program, please click here.

America's corn growers love the current ethanol craze but corn ethanol will not replace gasoline nor lower its price at the pump. In fact, it may raise the price. Ethanol roughly tracks the price of gasoline. Even with a plentiful supply, ethanol will not put downward pressure on gas prices because ethanol costs more to produce than we pay at the pump.

Because of government incentives, consumers pay twice for ethanol - when they fill up and when they send off their tax return. Last year, ethanol makers and sellers received subsidies of about $1.87 for every gallon of gasoline that ethanol replaced.

Perverse programs

The subsidies do not end there. They do, however, become more illogical. Auto manufacturers receive subsidies to produce ethanol-consuming cars. Then they are rewarded for producing those ethanol-consuming cars: They get to produce other vehicles that are less fuel efficient than prevailing standards. How perverse! These twin government programs are expected to increase the amount of oil that we consume annually by about 200,000 gallons a day by 2015 - about what we import from Kuwait.

You can cite statistics to 'prove' that higher prices at the pump do not deter Americans from driving. A large part of the reason is the fact that the U.S. has a lot of wide open spaces that other countries may not have. Americans need to travel those wide open spaces in their work. Take two extremes: Washington, D.C. and Wyoming. Workers in the Washington area drive on average about 6,700 miles a year. They tend to be higher income and they often drive fuel-efficient vehicles. Workers in Wyoming average 18,000 miles a year, often in a pick-up truck or other older, less fuel-efficient vehicle.

Why don't Wyoming drivers buy more efficient cars? They can't afford it. Gas now consumes about 15 percent of annual income in some poorer rural areas. The figure is closer to two percent in wealthy suburban areas.

The poorest Americans struggle to buy gas to get to work to earn enough money to buy more gas to get to work to earn more money to buy more gas. Mexicans demonstrate in the streets because they are paying more for tortillas. And the ethanol industry is sitting pretty.

The priest who told me about Juanita and Paulo said that few Mexicans are as disadvantaged. Illiterate in their own Indian language, they lived with fear and superstition. But their story has a good ending.

Mi futuro es México

Paulo earned enough to buy bus tickets and brought his family to Nogales. He had been told about a better job in Cancun, where the tourism industry always seemed to need workers. But Paulo stayed put and took Spanish lessons so that he could advance at work. Now, with papers and a job, he and his family move easily across the border when they want. Nogales on the Arizona side, they say, is full of retired Americans and desperate Latinos.

Juanita works in a child care center and, for the first time in her life, has decent medical care. The children are healthy. As she sees the difference between the two Nogaleses, she wonders why she and Paulo thought that they needed to get to the United States to have a chance for a happy life.

Paulo puts it in his new Spanish: Mi futuro está en México (My future is in Mexico). Then, showing mastery of a subtlety of the language, he proudly corrects himself: Mi futuro es México (my future is Mexico's future).

That future will be better if the folks who make the decisions on energy subsidies in Washington, D.C., can learn a little bit about what subsidies do to supply and demand.

Radnor Inc


visit Radnor    email Radnor

copyright © 2007 Radnor Inc.

Email Marketing by