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Mexican bank chief talks immigration

In Dallas, he says stricter U.S. policies could help his country


06:50 AM CDT on Wednesday, September 27, 2006

By DIANNE SOLÍS / The Dallas Morning News

Guillermo Ortiz, Mexico's central bank governor, admits he takes a contrarian view on immigration policy.

Unlike the current Mexican administration, Mr. Ortiz thinks tougher enforcement policies in the U.S. might help Mexico.

"I think Mexico needs its people," said the 58-year-old Stanford-educated economist, on Tuesday in Dallas. "It would be best to keep its people in Mexico, and it would give incentives for Mexico to create the jobs that are needed."

In remarks to the editorial board of The Dallas Morning News, Mr. Ortiz characterized his views as a "little contrarian" to those of President Vicente Fox, who has pushed for a guest worker plan with the U.S.

Instead, he says tougher enforcement measures, such as those being discussed in Congress, "would not be altogether bad. It would certainly be better over the long run."

Illegal immigration has polarized the U.S. This week, the Senate is expected to debate a House-passed bill that would mandate 700 miles of fence along portions of the U.S.-Mexico border. The vote outcome is uncertain.

And even more remote is the chance that Congress will pass a comprehensive immigration measure backed by President Bush before the Nov. 7 election. That bill would legalize millions of illegal immigrants already here, create a guest worker program for future flows and toughen enforcement measures at the border and within the interior.

The Bank of Mexico is independent from the Mexican government, and, since 1998, Mr. Ortiz has served during the tenure of presidents from two political parties: the Institutional Revolutionary Party, or PRI, which held the presidency for seven decades, and the National Action Party, which ended the authoritarian and often corrupt rule of the PRI.

Mr. Ortiz took over as Mexico's finance minister in December 1994, after a disastrous peso devaluation set off an economic crisis, sent Mexican inflation soaring and inspired a U.S.-led bailout to cover debt obligations. The Mexican government has since paid back the loans.

The central banker also spoke Tuesday at the Federal Reserve Bank of Dallas. Its president and CEO Richard W. Fisher helped oversee implementation of the North American Free Trade Agreement as deputy U.S. trade representative.

Mr. Ortiz said the Mexican economy must become more flexible and more competitive in energy and telecommunications to facilitate growth and businesses. Higher economic growth rates would help absorb a growing number of workers who leave Mexico for work in the U.S.

But closing the gap between Mexican and U.S. wages – a key driver of migration – will take decades, Mr. Ortiz acknowledged. A recent Pew Hispanic Center survey in seven cities, including Dallas, found that most Mexican immigrants held jobs in Mexico before migrating to the U.S.

Remittances sent back to Mexico from immigrants, legal and illegal, have steadily increased. At the current pace, remittances may reach $25 billion this year.

Mr. Ortiz said their steady growth over the last few years reflected better tracking methods, not increased migration. Remittances are more important as a safety net for Mexico's poorer families than as a key lubricant to the economy, he added.

Mexico has the highest per-capita income rate in Latin America, according to the World Bank. Yet 48 percent of the population was living in poverty in 2004, according to the World Bank.

This year, the central banker expects the Mexican economy to grow at 4.6 percent to 4.7 percent. It grew about 3 percent in 2005.

E-mail dsolis@dallasnews.com