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October 2012, Volume 19, Number 4

Latin America: Migrants

The US is apprehending more Central Americans just inside the US border with Mexico. Net Mexico-US migration has slowed toward zero, as the number of Mexicans returning home equals new arrivals. However, migration from Central America to the US is rising, reflecting lagging economic growth and rising crime in El Salvador and Honduras.

Central American migrants, who are subject to extortion from police and drug gangs as they travel through Mexico, say they are migrating for economic opportunity and to escape violence at home. Central American countries have some of the world's highest murder rates. The murder rate was 82 per 100,000 in Honduras in 2010, 66 per 100,000 in El Salvador, and five per 100,000 in the US.

Many of the Central Americans detected just inside the US border are minors; over 10,000 were detained at some point in the first nine months of FY12, which ended June 30, 2012. Most of those detained say that their parents paid guides to take them through Mexico, and many have parents already in the US. Most Central American children apply for asylum, which can be difficult to grant when the applicant describes general gang-linked violence.

Romer. Economist Paul Romer, developer of endogenous growth theory that holds growth comes from within, has called for the development of charter cities in developing countries that operate under developed country rules and institutions, as in Hong Kong. The libertarian-oriented Honduran government in Tegucigalpa approved a law to create a so-called charter city in 2011, and the agency created to supervise the project signed an MOU with the first investor group in Fall 2012.

The MOU prompted Romer to withdraw from the project, since it was signed without input from the transparency commission that Romer created. A US-led investor group has options to buy land on the Caribbean coast near Puerto Cortes, but challenges to the notion of creating a city within a country governed by other laws have delayed development. The country of Georgia is attempting a similar special economic zone in the charter city of Lazika on the Black Sea.

Panama. The expanded Panama Canal, expected to open in 2015, will allow larger ships to travel from Asia to east coast US ports. So-called Post-Panamax ships are a sixth of the world's container fleet, but they have almost half of the world's capacity to carry containers.