Cablegate: Migrant Assocations Spur Development in Michoacan

VZCZCXYZ0012
RR RUEHWEB

DE RUEHME #5157/01 2551551
ZNR UUUUU ZZH
R 121551Z SEP 06
FM AMEMBASSY MEXICO
TO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 03 MEXICO 005157

SIPDIS

SIPDIS

STATE FOR WHA/MEX, WHA/EPSC, EB/IFD, AND EB/EPPD
STATE PASS USAID FOR LAC: MARK CARRATO
TREASURY FOR IA MEXICO DESK: JASPER HOEK
COMMERCE FOR ITA/MAC/NAFTA: ANDREW RUDMAN

E.O. 12958: N/A
TAGS: ECIN ECON EINV MX
SUBJECT: MIGRANT ASSOCATIONS SPUR DEVELOPMENT IN MICHOACAN

REF: A. MEXICO 2042

B. MEXICO 2097
C. MEXICO 2123
D. MEXICO 2154

MEXICO 00005157 001.3 OF 003

Sensitive but unclassified, entire text.

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INTRODUCTION AND SUMMARY
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1. (SBU) Last April Embassy Mexico produced a series of
cables (ref. A-D) detailing how the chain of migration and
remittances from the U.S. affected life in rural Mexico. At
the invitation of our Michaoacano contacts, econoff returned
to the town of Venustiano Carranza to meet migrants
temporarily back from the U.S. to hear how they, through
their U.S.-based Hometown Associations (HTAs), interact with
the town. HTAs, or migrant associations which seek to raise
funds and invest in their communities of origin, have been
growing in size and influence throughout rural Mexico (ref.
C). They are playing an increasingly important role in rural
development. Many of these organizations maintain extremely
close relationships with local governments and are involved
in most important community decisions. Since 2002, Mexico's
"Three-for-One" program has attempted to harness this
investment wave by providing foreign-based migrants an
opportunity to receive matching funds from federal and state
governments. Participation by HTAs and local governments in
Three-for-One has grown dramatically since its inception, and
reaction to the program is generally positive. However, many
migrants still distrust the program, encouraging a
simultaneous increase in direct HTA-community donations. End
Introduction and Summary.

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THREE-FOR-ONE
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2. (SBU) Remittances account for more than 15 percent of
the State of Michoacan's total GDP; while an increasing
percentage of financial transfers from the U.S. to Mexico has
been in the form of organized contributions by HTAs. Javier
Urbano, social scientist at Ibero-American University in
Mexico City, estimated that the relative size of formal
project giving (as opposed to informal remittances sent from
one family member to another) has grown from 2 percent in
2002 to as much as 4 percent in 2006. In Michoacan, the
number of Three-for-One projects has grown from 65 in 2002 to
148 in 2005, according to Eneida Martinez, Coordinator of
Foreign Services for Michoacan. State and federal officials
suggested that Three-for-One and other similar programs have
been a great success pointing to the increase in total
investment and number of projects. However, while most
migrants tend to view the program as a positive, doubts exist
about its transparency and effectiveness.

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HTA INFLUENCE
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3. (SBU) The leading Hometown Association for the city of
Venustiano Carranza, a farming community of approximately
50,000 residents in northern Michoacan, is one of the best
organized and established in the state of California. Based
in Hawaiian Gardens, California, the HTA, known as "Club
Tarrasco", boasts of 487 members (compared to 215 in 1996)
and maintains almost daily communication with the local
government. Demographically, the club is diverse; while many
of its affiliates have recently left Mexico, a significant
number of members, particularly its leaders, have been in the
U.S. for twenty years or more. Club Tarrasco participates in
local policymaking. The Venustiano Carranza city council
holds a weekly conference call with HTA representatives to
discuss council business, and the Club donated over 87,000
dollars for projects, a total nearly two-thirds of the town's
municipal budget. In May 2006, for example, Club Terrasco
submitted four Three-for-One projects to the state Office for
the Attention of Migrants in Morelia for approval; two road
improvement initiatives, a water canal extension, and
construction of a soccer field. The late-June festival for
the city's patron saint provided local officials and the HTAs
an opportunity to discuss investment projects and other
related business. During this event, Club Tarrasco leaders
and representatives shared their views with Econoff regarding
the effectiveness of Three-for-One and other investment
programs.

MEXICO 00005157 002.3 OF 003

4. (SBU) The immigration debate in the U.S. has convinced
many HTA leaders to focus increased attention on projects
which improve local Mexican infrastructure and provide jobs.
One Club Tarrasco officer from Hawaiian Gardens believed a
more secure future border will greatly increase the risk
involved with illegal immigration, leading many U.S. based
migrants to believe that the opportunity to enter the U.S.
illegally will not be as "available" to future generations.
In the past, HTA projects and donations have been primarily
focused on beautification projects; as an example, Club
Terrasco restored a chapel in 2003. However, the last four
Three-for-One proposals submitted by the HTA have focused on
sustained development, and according to a Vice-President of
the Federation of Michoacan Clubs of Chicago, the recent
trend for many HTAs has been to prioritize productive
enterprises which may spur substantial economic growth and
investment. There may also be a growing realization that the
long-term hometown prosperity must rely more on local
development rather than continued migration.

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LESS CONFIDENCE IN STATE, FEDERAL GOVERNMENTS
---------------------------------------------

5. (SBU) While most HTA members said that they had full
confidence in the city council and municipal president,
several members pointed out as an example the municipal
elections of 2002, where a dispute about a mayoral election
was eventually resolved with the "assistance" of HTA members,
most likely by their exercising a "veto" over any proposed
government. Furthermore, many members of Club Tarrasco said
their hometown association had helped to ensure greater local
and state governmental accountability in Venustiano Carranza
and Michoacan. Anecdotal evidence seemed to suggest that
this "fifth column" is generally welcomed by the population,
providing checks and balances absent in rural Mexican
politics. As a the size and financial strength of Club
Tarrasco has grown, so has its relatinship with local power
centers. However, given the fact that most Club Tarrasco
leaders have been in the U.S. for twenty years or more, it
does not appear that the HTA is empowering or mobilizing
previously disadvantaged members of the community.

6. (SBU) Migrant representatives also conveyed a level of
dissatisfaction with the Office for Migrant Attention for the
state of Michoacan, currently tasked with processing
Three-for-One program applications. Another of the Club
Tarrasco council members, admitted state and local interests
oftentimes may not be aligned. In addition, many HTA members
expressed the concern that politics at the state government
level may affect the efficiency and speed of processing of
applications. Some of the participants said that that they
suspected that local officials expected a quid pro quo in
some cases, and that the traditional corruption of past
regimes may not have completely disappeared.

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DIRECT DONATIONS RISING
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7. (SBU) Due to occasionally long processing times, Club
Tarrasco often bypasses the Three-for-One program, donating
directly to the municipal government of Venustiano Carranza
to fund urgent programs. For example, in 2005 Club Tarrasco
donated 26,500 dollars for various projects, including a new
ambulance, expansion of the local hospital's emergency ward,
and urgent road reconstruction following severe flooding.
While the overall number of projects supported by Club
Tarrasco, including Three-for-One projects, is increasing
(from 8 in 2004 to 13 in 2005), the rate of increase of
directly funded projects is higher than the rate of increase
of the total number of programs (increasing from 1 in 2004 to
5 in 2005). This also may reflect a growing distrust of the
federal and state administration of the Three-for-One
program, and is probably not limited to Venustiano Carranza
and Club Tarrasco.

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COMMENT
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8. (SBU) HTA influence in local government in rural Mexico
is already very strong and continues to grow. Beginning in
2002, the Fox administration through the Three-for-One
program attempted to encourage greater social and economic
inclusion of Mexican migrants in the U.S., with mixed

MEXICO 00005157 003.3 OF 003

results. On one hand, Three-for-One has resulted in numerous
development projects in traditionally underserved areas.
However, Three-for-One also may be used as a new tool for
leveraging other forms of influence by state and federal
officials. In ever greater numbers, HTAs are directly
contributing to their communities of origin, providing much
needed support for basic infrastructure, thereby bypassing
several layers of bureaucracy. With or without federal or
state involvement, however, hometown associations such as
Club Tarrasco will likely play an increasingly important role
in stimulating long-term rural economic development. Their
connection to Mexico shows no sign of diminishing.

Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity

GARZA

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