A borderline case: new growth

From the southern tip of Texas, the Sunbelt boom used to look like a northern phenomenon. Economic expansion in the Southwest seemed to peter out before it reached the US-Mexican border region that stretches 2,000 miles from here to California.

But that view is changing. The borderlands, historically one of the poorest regions in the United States and the source of some friction in US-Mexican relations because of illegal immigration, is making significant gains. And its future looks decidedly brighter than its past, according to border experts from both countries at a recent conference in this resort community.

Those gains have not wiped away some persistent problems. Unemployment on the US side remains higher than the national average. And some of the lowest per-capita income levels in the US are found in the border region.

Also, rapid population growth on both sides of the border is increasingly threatening to create water shortages in the coming decades. In short, the region is growing so fast that the US and Mexico will not be effective in coping with the growth on either side without joint policies that deal with the area as a whole, analysts here assert.

"If development on both sides is not coordinated, it could jeopardize development on either side," noted Dr. Stanley Ross, coordinator of the border research program at the University of Texas at Austin.

Still, there is good news from the border. The general migration of US industry southward is washing into border communities, creating better jobs and less dependence on agriculture.

In Mexico, the "maquiladora" (assembly plant) program that allows US firms to assemble goods south of the border for ultimate distribution in the US is growing handsomely. The program now employs some 125,000 Mexicans, compared with 108,000 in 1979, according to Mexican officials at the conference.

US companies like the program because of the lower wage scales in Mexico and the fact that they pay no duty on goods brought back into the US except for the value added by assembly. Mexico gets jobs and some infusion of capital from the program.

At the same time, Mexico's energy wealth is beginning to lay the foundation for more industrialization in that country. The border region, in particular, is expected to benefit from Mexican efforts to modernize the economy.

Accompanying these developments is surging population growth, which seems to gobble up jobs as fast as they are created. Economist Francisco Alba of El Colegio de Mexico in Mexico City estimates that on the southern side of the border the population count will grow 4 to 5 percent annually for the foreseeable future -- even higher than the 3.2 percent yearly expansion he sees for Mexico as a whole.

Mexicans continue to see the border region as an area of opportunity. "In general the feeling is that there are benefits to living close to the United States, including the possibility of crossing over for jobs," explains Professor Alba.

US border communities also are growing rapidly in size. Figures from the 1980 census show border metropolitan areas to be among the fastest-growing in the country.

Much of this is due to the high birthrate of the large Hispanic population along the border. But there is a new dimension of in-migration from other regions of the US.

Here on South Padre Island, the tourist traffic is growing with visitors from the Midwest and Northeast -- a trend that has been under way for several years. What is different is that many are deciding to stay, apparently because of the relatively low cost of living and the warm climate. Economics and good weather are luring many new residents to the Texas border region, and here in the lower Rio Grande valley there is an expanding retirement community.

The long-term outlook for the region will depend on whether expansion in jobs can keep pace with the population, analysts at the conference concurred. Some observers see the region as one where population is destined to outpace jobs. Says Alba: "More economic development in the region just draws more people [from the interior of Mexico].'

While the maquiladoras facilities are expanding and generally regarded as good for both sides of the border, no one sees them as the engine for the kind of industrial development and job creation needed in Mexico. The assembly plants provide jobs that require lots of manual labor --assembling automobile components, for example. As a result, they provide no new technologic building blocks around which Mexican industry can expand. Also, assembly plant jobs tend to be cyclical with the US economy.

Greater job stability in the region must come from more sophisticated and lasting employment opportunities in Mexico, points out Prof. Gilbert Cardenas of Pan American University in Edinburg, Texas.