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eltltpter 7 The Economic Development of El Barrio Edwin Melindez Few themes have attraaed as much intelleaual interest during the past two decades as the global economy. The initial research impetus came largely from a need to tmderstand changing trade, production, and investment patterns in international markets and the repercussions of these changes for national economies. The oil shortage of the early 1970s marked a turning point for macroeconomic dynamics in the United States and other industrialized and developing countries. Subsequently, much attention was given to the dismantling of welfare states and privatization, increased inequality, and migration flows. As many authors in this volume observe, these changes had tremendous consequences for the Latino population in the United States. Latino communities, in turn, have become aaive participants in subsequent processes of economic development. Recent national policy debates have centered on topics such as the North American Free Trade Agreement (NAFTA), immigration and welfare reform, persistent poverty and income inequality, and the growing disparities between cities and suburban areas. Understanding conditions facing Latino populations is central to the formulation and implementation of public policies in these areas. Surprisingly little attention has been paid to the effects on etlmic communities of the restructuring of national economies and the globalization of production and labor markets. For Latinos, this discussion is informed by a somewhat disparate literature encompassing the adaptation and assimilation of immigrant populations and the role that social networks play for Latino organizations; persistent poverty and the increasing isolation of the poor; and the prominent role that certain large cities have played in the development of the global economy. While it is not possible to sununarize such a diverse body of work in this chapter, it is important to emphasize that el barrio is a key conceptual category. In this chapter, el barrio refers to an urban neighborhood or group of neighborhoods in which Latinos are the predominant population. The fabric of these communities is made up of ethnic networks, businesses, churches civic organizations and other social institutions.' An examination of the literature suggest~ several lessons that are particularly relevant Copyrighted Material 105 106 Economic Development ofEl Barrio ffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi here. First, the heterogeneity of the Latino population in terms of country of origin and history of incorporation into U.S. society produces a diversity of experiences regarding barrio formation and economic development . I will focus on the experience of Mexicans, Cubans, and Puerto Ricans as a way of illustrating these contrasting patterns. Second, the institutional adaptation of Latinos has been influenced largely by their own agency. In this regard, numerous examples of "best practice" suggest that neighborhood groups can be effective in influencing Latinos' economic adaptation and success. And, finally, etlmicity can playa key role in our understanding of community economic development and in the design of successful commwuty strategies and public policy. What are the implications of these general lessons about the Latino experience in economic development for the formulation of public policy? My objective here is to present an alternative, community-based strategy tor promoting the economic development of el barrio. I argue that the economic development of poverty-stricken areas depends on identifying community assets, building their capacity, and strengthening the links from this web of organizations and individuals to the mainstream economy . The relevant group of organizations and actors includes the small business sector and those who link residents to employment, create housing , or engage in other capacity-building and networking activities in the community. These groups have generated numerous successful strategies, and I give examples of best practice to illustrate how community action and public policy can effectively address specific problems in community economic development. Community econonUc development, in this context, refers to the process whereby local actors stimulate and promote spatially based economic activity. Obviously, this is a broad definition that includes a vast array of activities from job creation to physical infi-astructure development. Here I focus on such key areas as community development corporations (CDCs), small business development, and employment and training. Within these areas, numerous organizations and programs can serve as models for the design of successful community strategies and public policy intended to foster the development of economically distressed neighborhoods. The examples presented here are representative of well-designed popular responses to the broader problems of economic restructuring and the decline of the econonUc base of neighborhoods.2 We lmow from research and direct experience that the poor and others who live in the inner city have developed organizations and social networks that...

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