The Borders of Inequality: Where Wealth and Poverty Collide

5. How Can a Step Be Reduced?

5 How Can a Step Be Reduced? Germany and Poland, the United States and Mexico, Spain and Morocco Being richer than the country next door causes similar problems for almost all nations that are in this situation: the problems generated by wealth interfere with its enjoyment. All that’s left is its possession. This is just the opposite of Michel de Montaigne’s recommendation in his essay about inequality, where he states that wealth is meant to be enjoyed and not just possessed.1 The challenges posed by the step can be met with the ingredients of integration . Which ones? In what sense? In the following pages, we will analyze the history and experience of three borders where this problem is significant : the United States and Mexico, Germany and Poland, and Spain’s southern border with Morocco. The three cases are homogeneous in that they include a larger and a smaller neighbor, both in terms of their economies and their population. Mexico’s total GDP is 6 percent of GDP in the United States, Morocco’s is 5.8 percent of Spain’s, and Poland’s is 9.3 percent of Germany’s. Mexico’s population is 35 percent of the U.S. population , Poland’s is 47 percent of Germany’s, and Morocco’s is 73 percent of Spain’s.2 Although the three cases have developed in different ways over time, they all involve sharp inequality and the basic effects of the step, such as emigration, smuggling, and antagonism. Finally, in the cases of Spain– Morocco and Germany–Poland, one or both of the countries is a European Union member, while in the case of United States and Mexico, both countries are members of the North American Free Trade Agreement. In this chapter, we will offer a general snapshot of bilateral relations between Mexico and the United States and Germany and Poland in 2001and around 1986,analyzing the dynamics of bilateral economic relations in order to sketch a panorama of the structure of integration and evaluate its results.3 Mexico–The United States The border between Mexico and the United States is legendary for its inequality. In 2004 the step was 4.0 in terms of purchasing power parity How Can a Step Be Reduced? 99 and 6.1 in nominal terms. Combining PPP and nominal GDP per capita, it is the 17th most unequal border in the world. Inequality reached a record 11.5 in 1986, and the average ratio between 1970 and 2001 was 7.1. Although this is indeed a high degree of inequality, it has never been among the ten worst cases in the world, and it has clearly been on a downward trend. Nonetheless, the effects of the step between Mexico and the United States are the most intense in the world. The world’s main passage for narcotics trafficking runs through this border, as well as the main corridor for emigration (and therefore remittances). Antagonism has reached extravagant dimensions: it is the first border in the world where private citizens started to amuse themselves by pursuing illegal immigrants (with pistols attached to their belts). If borders are places where people and markets collide, Mexico, the 13th largest economy in the world, faces the world’s largest economy on the Rio Grande. The relative difference in population is even greater, since the United States has 295 million inhabitants (the 3rd-largest population in the world), while Mexico’s 106 million make it the 11th largest . The 1,951 mile border is the 9th longest in the world (see table 5.1). These dimensions make any other border in the world look small. The combined population of Thailand and Myanmar is marginal compared with the avalanche of humanity that goes back and forth across the Rio Grande. The markets that face each other on the border between Greece Table 5.1 The World’s Longest Borders Rank Border Length (in miles) 1 United States–Canada 5,526a 2 Kazakhstan–Russia 4,254 3 Argentina–Chile 3,298 4 China–Mongolia 2,906 5 India–Bangladesh 2,518 6 China–Russia 2,265b 7 Mongolia–Russia 2,202 8 Brazil–Bolivia 2,127 9 China–India 2,100 10 United States–Mexico 1,952 Source: Author’s calculations based on data from the CIA’s World Factbook at https://www.cia.gov/library/publications/the-world-factbook/geos/xx.html. a The U.S.–Canada border figure includes the 1,539-mile border with Alaska...