The Darién Gap, straddling the border of Colombia and Panama, is 62 miles of dense jungle stretching from the Caribbean to the Pacific. It is the only point where the Pan-American Highway from Alaska to Tierra del Fuego is interrupted, due to the difficulty of the terrain.
Even so, Panamanian officials tell me that some 20,000 undocumented migrants enter the country on rugged foot paths through the gap every year. They largely originate in Cuba, Haiti, Africa and Asia. This year the numbers are moving higher, with 7,150 foreigners illegally crossing into Panama in the first quarter and 4,403 arriving in March alone.
Panama provides humanitarian aid to migrants but says most aren’t interested in sticking around. They want to push on to their ultimate destination: the U.S. By the time they reach the southern U.S. border, they are joined by thousands of Central Americans and Mexicans also completing journeys of great peril.
While these people hail from diverse countries, continents and cultures, they are all fleeing repressed economies in the hope of reaching a place of opportunity—to work, save and enjoy the fruits of their risk-taking in peace. For some, this includes a plan to return to their homeland after building a nest egg in a nation renowned for freedom and capitalism.
The Biden administration says it wants to tackle the “root causes” of migration. But progressives don’t want capitalism to take hold in poor countries. The upshot is that somebody’s going to get rich off President Biden’s $4 billion aid package for the region. But it won’t be la gente.
In assessing the migrant flow from Central America’s Northern Triangle—Honduras, Guatemala and El Salvador—Team Biden places heavy blame on successful entrepreneurs. In a March interview with NPR,
the White House’s National Security Council senior director for the Western Hemisphere, called the “private sector” a “predatory elite that benefits from the status quo, which is to not pay any taxes or invest in social programs.”
Mr. González’s pejorative is shorthand for the view that a small number of wealthy business owners are responsible for persistent, widespread poverty. This narrative, popular during the Central American wars of the 1980s, is outdated at best. Yet it remains the left’s central talking point.
The facts on the ground are different. Far from causing the lack of demand for labor or a shortage of tax revenue, local businesses that operate in the formal economy create good jobs and generate a major portion of the tax revenue. They also contribute to the government’s health and pension systems. But there aren’t enough of them. Even educated youths often don’t find work.
The trouble is that most of the economy is underground. The development challenge is to make it attractive for those businesses, which aren’t registered and don’t pay taxes, to become legal and grow. That’s not done by scapegoating the compliant.
To be sure, crony capitalism undermines growth. But Mr. González is wrong to finger the traditional entrepreneurial class as the culprit. The biggest crooks in the Northern Triangle tend to be politicians and narcos snagging shady state contracts.
Political entrepreneurship is neither new nor unique to Latin America. Recall how former Rep. Joseph P. Kennedy II and
former aide Thomas “Mack” McLarty made a killing when their company Fusion Telecommunications was granted cut-rate access for completing calls to Haiti’s monopoly telephone company while President
wielded power. It’s little wonder American lectures about virtue often fall on deaf ears.
The region has a weak rule of law. Drug traffickers, well-funded by U.S. consumers, overwhelm the judiciary and law enforcement. In Guatemala hundreds of farms have been invaded by squatters in the past decade, and often judicial rulings in favor of land owners aren’t enforced. Political groups trying to gain power or make money are known to use the benign title “nongovernmental organization,” or NGO, as cover to deflect criticism and legal scrutiny.
Mr. González talks a good game about cleaning up corruption. But Democrats’ beloved U.N. International Commission Against Corruption in Guatemala—CICIG—was itself a corrupt endeavor.
Mr. González was recently on the board of the left-wing Washington Office on Latin America. There is reason to fear that his flawed thinking goes beyond economic cluelessness to an ideological bias prevalent among bidenistas.
Word that the Biden administration will funnel most U.S. aid to NGOs isn’t comforting. Vice President
recently met with five “experts” to prepare her for a trip to the region. Not one of them specializes in business or trade. Instead she heard from outfits like the Latin American Working Group and Oxfam, both of which support local NGOs that promote collectivism and oppose private investment in the region. And that’s why migrants keep moving north.
Write to O’Grady@wsj.com.
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Appeared in the April 26, 2021, print edition.
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