Is the U.S.-Mexico Border the Next Economic Powerhouse ?

Mexico is becoming a vibrant middle-class nation. Already, it is the largest trading partner of California, Texas and Arizona, and is responsible for hundreds of thousands of jobs across the Southwest.

And that might be just the beginning. With economic and educational reforms underway, Mexico’s rise could accelerate. By one estimate, Mexico will be the world’s fifth largest economy by 2050.

Yes, Mexico faces serious problems of corruption and violence at home. But the country is also investing billions of dollars in infrastructure and transportation near the border. That is already resulting in closer ties between Mexico and the Southwest, with economic, social, and cultural impacts.

Forget about the Asian Tigers and Benelux. The Next Economic Powerhouse Is Where the North and South Converge (photo: Google)
Forget about the Asian Tigers and Benelux. The Next Economic Powerhouse Is Where the North and South Converge (photo: Google)

A new transnational core of the global economy, along the Rio Grande

The Rio Grande, which once divided the hinterlands of two countries, is becoming the seam that stitches together two of their most dynamic regions. North of the river, the revolution in oil and gas production enabled by hydraulic fracturing (fracking) has produced an economic boom in the land above the 23-county Eagle Ford Shale. Further north, the Texas Triangle bounded by Austin-San Antonio, Dallas-Fort Worth, and Houston is exploding in population and prosperity, as it attracts migrants and jobs from the rest of the country and the world.

Meanwhile, the region south of the Rio Grande is the most prosperous in Mexico. Monterrey, the economic capital of the area, is the second wealthiest city in Mexico, hosting affiliates of multinationals including General Electric and Toyota. The six Mexican states in the Rio Grande Basin—Durango, Chihuahua, Coahuila, Nuevo Leon, and Tamaulipas—have a per capita GDP that is 2.3 times higher than that of the rest of the country. In Mexico as a whole, the middle class has grown to include as much as 40 percent of the population. As rates of Mexican fertility and immigration fall, the Great Migration from rural Mexico to the U.S. appears to have been a one-time phenomenon, like the Great Migration of rural blacks and whites to the northern U.S. between the two world wars.

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The continuing challenges of crime and poverty along the border should not obscure the outlines of a historic transformation in North America. The centers of economic dynamism in both the U.S. and Mexico—nations predicted to have the second and fifth largest economies in the world by 2050—are converging at la frontera. A new transnational core in the global economy, like the Benelux nations of Europe and the concentration of wealth in East Asia, is emerging on both sides of the area between the Rio Grande and Nueces rivers once known as the Wild Horse Desert. In an age obsessed with bad news, this is very good news indeed.

By Michael Lind

Michael Lind is co-founder of the New America Foundation and author of Land of Promise: An Economic History of the United States.