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Viewing cable 06MEXICO5157, MIGRANT ASSOCATIONS SPUR DEVELOPMENT IN MICHOACAN

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Reference ID Created Released Classification Origin
06MEXICO5157 2006-09-12 15:51 2011-08-25 00:00 UNCLASSIFIED Embassy Mexico
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. 
 
------------------------ 
INTRODUCTION AND SUMMARY 
------------------------ 
 
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. 
 
------------- 
THREE-FOR-ONE 
------------- 
 
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. 
 
------------- 
HTA INFLUENCE 
------------- 
 
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. 
 
--------------------------------------------- 
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. 
 
----------------------- 
DIRECT DONATIONS RISING 
----------------------- 
 
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. 
 
------- 
COMMENT 
------- 
 
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