T​he Other Side of America’s “Progress”

The Untold Truth of Third World Debt and its effect on Mexican
Immigration

11:00 PM PST 12/03/18 by Christopher Clemente, Desiree Perez

Third world debt has caused waves of immigration from Central America and, once those
immigrants arrive to the US, they end up facing many of the same issues they were running
from in their home countries. For example, many immigrants in the US pay more in taxes and
receive less in social services. Due to the misuse of investments in military use, Central
American countries are consistently getting poorer. In addition, the boomerang effect on loans
to third world countries has collapsed their potential of wealth.

On January 1, 1994, NAFTA started. NAFTA was involved in many countries such as Canada,
Mexico, and the United States. NAFTA had been beneficial to North American economies and
citizens. Back then, 1 million Mexican farmers, if not more, ended up without jobs due to NAFTA
only benefiting United States and Canada’s economy.

In 1996, sub-Saharan Africa had paid $2.5 billion more in debt servicing than it had gotten in
modern long-term credits and loans. The IMF and the World Bank are “preferred creditors” who
pick up control over devastated nations as the sums owed to them increases. Structural
adjustment programs, which reorient economies to benefit corporations while lessening
investments in social programs and locally situated production, are forced by IFIs on extremely
indebted nations.

In fact, multilateral debt started with the Latin American debt emergency of the early 1980s.
Mexico, Argentina, and Brazil all came to the brink of defaulting on credits that huge private
banks had openly offered during the 1970s..

I​
The ​ nstitute for Policy Studies​ displays in-depth statistics about multilateral debt, “For
low-income countries (defined by the World Bank as those with per capita GNP below $785),
multilateral debt increased by some 54.4% between 1980 and 1997, from $24.1 billion to $155.3
billion, and currently constitutes 32.75% of their total long-term debt burden (versus about 25%
in 1980). For the most severely indebted of those low-income countries, multilateral debt
increased by 45.9%, from $10.6 billion to $59.3 billion, with a corresponding percentage
increase in their long-term debt from 22.3% to 30%.”(IPC).

T​axes affecting immigrants​ ​- ​Desiree Perez

Immigrants are paying more taxes and receiving less in social services. Many immrgrants come
to the United States to get a better job and life for their childrens. In the article I was reading
says “​11.4 million undocumented immigrants here are working, paying taxes, and even starting
their own businesses. They also play an integral role in our economy, often filling jobs in
agriculture, construction, and hospitality that would otherwise remain vacant”. ​This still happens
in the present day because taxes are getting more expensive, especially in California that it
takes a good amount of a person’s paycheck, while they are working hard.

https://www.newamericaneconomy.org/issues/undocumented-immigrants/

Paragraph 3
Topic sentence: Third world debt that affected Central America
Signal phrase & quote: As by anonymous, grandma of Desiree perez, she talk about the third
world debt when she lived around the time. “ I remember when I heard that the United States
was lending money to Central America, so we could develop our country, but the money was
used on the military the most. Then there were threats of the United States, that we couldn’t pay
the debt.
Develop or elaborate (analysis or synthesis): ​ This was a major problem back when the cold war was
ending.
Transition:
 

M​ulti-lateral debt and Structual Program​ ​- ​Christopher Clemente

I​n February 1982, a sharp decrease in worldwide saves forces the Mexican government to
devalue the peso, expanding the dollar-denominated debt burden, primarily to US commercial
banks. In spite of the depreciation of the peso, Mexico is incapable to halt its misfortune of
saves and runs out of cash.

Rabobank​ stats how the US attempted to fix Mexico’s government, “​The government
nationalizes Mexico’s private banking system in order to prevent bankruptcy of the private
banking sector and imposes comprehensive exchange controls. In the following months, a de
facto moratorium on debt service exists. All payments on the private sector debt cease, as well
as most payments on the principal of the public sector debt (Buffie, 1989).”(Author)

“A sharp decline in international reserves forces the Mexican government to devaluate the peso, increasing the
dollar-denominated debt burden, mainly to US commercial banks”

In Admirable 1982, Mexico was not able to service its outside obligation commitments, stamping
the start of the debt crisis. After years of collecting outside debt, risen world interest rates, the
around the world retreat and sudden depreciation of the peso caused outside debt installments
to rise strongly. Since November 1982, a few forms of debt rebuilding were connected, counting
the Bread cook arrange and Brady plan. Beneath the Brady plan, US banks expected the
misfortunes on Mexican debt. The IMF helped with three monetary packages, which went with
by structural reforms.

Mexican, banking sector changes were postponed. Mexico still lacked inadequate banking sco
started to privatize the commercial banks, which were nationalized in 1982. In any segment
supervision, in spite of the fact that the government ensured both deposits and liabilities
The economic and social emergency holding Mexico nowadays started a few thirteen years
back when the Mexican government, confronted with a massive outside debt, executed a set of
basic adjustment measures promoted by the World Bank and the Universal Financial Finance.
Those approaches, planning to control expansion and produce outside trade to assist pay off
the debt, come about in increased unemployment, poverty and economic polarization. By
consistently tearing away at Mexico's economic and social texture and especially at the
well-being of its little country and urban makers, they set the arrange for the economic collapse
of December 1994 - ​Structural Adjustment and the Spreading Crisis In Latin America​.

An anonymous immigrant who migrated to United States provides some insight the aftermath,
“​Si mi mama era madre soltera y apenas tenia para daernos de comer a mi hermana y ami.”

Then proceeds to state, “​Si por no ter un padre que biera por mi hermana y por mi.”

Mexico had been cited by the World Bank as an effective example of a nation where an
adjustment has included a real wage decrease in order to avoid enormous amount of
unemployment. However, out of a financially active population of 34 million, 15 percent were
openly unemployed, and over 40 percent, a few, 14 million individuals were underemployed.

There are strong connections between third world debt on counitres that dont allow fair wages
and immigrants migrating to the United States that are often times declined from valuable social
services. In modern day society, how can countries prevent the mis usage of conditional loans?
Will this prevent relarives from ricking their lives in migrating to the US for a better future?