Elephants in the Room

Jobs and Opportunity Are the Only Path to Peace in Central America

The United States must foster free trade and economic growth in Honduras, Guatemala, and El Salvador, or the vicious cycle of violence will persist.

Central American migrants enter the El Chaparral border crossing in Tijuana, Baja California, Mexico, on April 29. (Guillermo Arias/AFP/Getty Images)
Central American migrants enter the El Chaparral border crossing in Tijuana, Baja California, Mexico, on April 29. (Guillermo Arias/AFP/Getty Images)

The Honduran migrant caravan — a group of hundreds of asylum-seeking migrants mostly from Honduras, Guatemala, and El Salvador who arrived last month after a journey from Central America to the U.S.-Mexico border — was successful in that it brought attention to the plight of everyday citizens in Central American countries.

These three countries, which make up the Northern Triangle, are racked with the sort of violence that occurs when a nation cannot provide peace, security, and economic opportunity.

The United States and Mexico should admit the migrants who meet each country’s respective criteria for asylum. They should also double down on security assistance to the Central American authorities as they try to enforce the law and reduce violence. But, ultimately, these are Band-Aids. There will be no peace in Central America until there are jobs and confidence in the future.

The situation in the Northern Triangle is bleak. Organized gang violence plagues communities. Each country has at least one city on Mexico’s Citizens’ Council for Public Security’s list of most violent cities in the world. Starting in 2014, parents became so desperate to protect their children from the gangs that it seemed safer to entrust them to smugglers who led the children — on foot, in unventilated semitrailers, clinging to the top of freight rail cars — to the U.S. border. Once there, they would ford the Rio Grande or hike across the desert, seek out the first U.S. Border Patrol unit they could find, and beg for asylum.

From 2007 to 2015, the number of immigrants from El Salvador, Guatemala, and Honduras in the United States rose by 25 percent. The number of new immigrants to the United States per year from the Northern Triangle countries doubled between 2011 and 2014, from 60,000 to 115,000.

Thanks to public awareness campaigns by the Central American governments, the flood of 2014 has ebbed to a steady trickle. But the violence that drove the caravan north is a fixture of daily lives in the region, and the gangs continue to grow stronger.

Like it or not, this is the reality: Americans will bear part of the cost of the nexus of crime, corruption, violence, and poverty no matter what policymakers in Washington do. This migration strains U.S. border resources — agents cannot focus on counterterrorism, human trafficking, and drug smuggling if they are continually intercepting children seeking a glass of water and a safe place to sleep.

The Northern Triangle is trapped in a vicious cycle. Lack of legitimate economic opportunity drives desperation, which pushes young people without jobs to join gangs or flee the country to help provide for their families. The most enterprising come to the United States, depriving their home countries of valuable human capital needed to support their communities and grow their economies. The gangs grow more powerful, undermining public order. Shaky rule of law deters investment, which reduces economic opportunity.

There are models of success in the region and around the globe. Mexico, in particular, is a case study in how the right economic reforms can create stability.

For decades, Mexicans migrated north to seek economic opportunity and safety. But a series of reforms begun in the mid-1980s, locked in by the North American Free Trade Agreement (NAFTA), created a middle class in Mexico in a short amount of time. Mexico deregulated and opened its financial, telecommunications, and broadcasting markets, inviting foreign investment into an economy that had been largely closed since the 1930s. With NAFTA, particularly its requirement of transparency and due process in government decision-making, Mexico signaled to investors its commitment to the newly open model. The result? Thanks to global investment in industry and services, most Mexicans today find good job opportunities at home. While Mexico still struggles with organized crime, the vast majority of Mexicans do not feel the need to migrate.

U.S. migration patterns over the last decade reflect this. More Mexicans are going back to Mexico than are coming to the United States — from 2005 to 2010, 20,000 more immigrants went back to Mexico than arrived in the United States; from 2009 to 2014, it was 140,000. As a result, the number of U.S. immigrants from Mexico has declined 6 percent.

Central America has attempted to follow Mexico down this path. Two decades ago, the Northern Triangle countries deregulated energy, financial services, telecommunications, and broadcasting, and privatized the state-owned companies that had controlled these sectors. In the Central American Free Trade Agreement (CAFTA) with the United States, they committed to transparency and due process in an effort to attract foreign investment. And it’s working — there is the beginning of a middle class in all three countries, and iPhones and McDonald’s are ubiquitous — but not fast enough.

As the economy was opening, the street gangs, which were incubated in jails in the United States, began to take root in Central America and align themselves with the Mexican and Colombian drug cartels. As a result, the Northern Triangle countries have yet to replicate Mexico’s success. Nonetheless, the agreement represents a commitment by the Central Americans to a trade-led development model based on U.S. ideas of transparency, rule of law, and a level playing field. In effect, the United States promised them that its model would enable them to prosper.

It’s urgent that the United States engages to ensure the success of the CAFTA model and break the cycle of violence and despair. The United States’ strong commitment to assisting their security forces in confronting the gangs is important, but it’s not enough. The right reforms will create a stronger economic foundation. Some places to start: reduce red tape to encourage business formation, broadening access to credit through pragmatic banking reforms, reduce the cost of energy by harnessing the economies of scale from a regionally integrated market, and eliminate nontariff barriers to intraregional trade to better link Central American suppliers to global supply chains.

Broader opportunity will coax people back into the legitimate workforce. Starved of cannon fodder and squeezed by improved law enforcement, the gangs will shrink.

It will take strong Central American leadership to accomplish this. A young generation of leaders committed to creating a policy environment that unlocks the creative energy of the people of Central America is part of the keys to success. As it happens, our organization, the George W. Bush Institute in Dallas, has a strong track record, both in fostering consensus around policy strategy in North America and in leadership development in the United States and around the world.

Over the coming months, we will build on this record by forming a group of thought leaders from government, business, and civil society from Honduras, Guatemala, and El Salvador to consider together how to prioritize and promote key economic reforms. More established leaders with experience in implementing the initial market-opening reforms and negotiating CAFTA with the United States will join with emerging leaders to form a network that will strengthen the confidence, skill, and commitment of young leaders as they take the baton in hand and move their countries forward.

The elements of a successful strategy are in place to bring security and prosperity to Central America. We believe what is lacking is a broad consensus as to priorities and a cross-generational leadership network committed to implementing those priorities. With our proven approach, we believe we can create the needed consensus and network, develop a plan for improving the economic and social situation of the Northern Triangle, and encourage real change and progress on the ground.

Matthew Rooney is director of the economic growth program at the George W. Bush Institute. Twitter: @econgrowth
Laura Collins is the deputy director for economic growth at the George W. Bush Institute. Twitter: @lvtcollins

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