The Darien Gap, Migrants, and US Politicians
The Darien Gap: The United States, like Panama, will elect a president this year. US politicians as well as Panamanian politicians are using the migration crisis issue in their political campaigns. In both countries, this issue could be decisive in their respective electoral processes. Immigration is fueling US economic growth while politicians rage. While the rising number of immigrants in the US has sowed division among politicians across the country, and stoked angst among a swath of voters, there’s one place where almost everyone seems on the same, upbeat, page: Wall Street. Last month, the nonpartisan Congressional Budget Office (CBO) calculated that immigration will generate a $7 trillion boost to gross domestic product over the next decade. The agency came to that conclusion after incorporating the recent surge in immigration.
The CBO release spurred a flurry of fresh number-crunching among investment bank economists, to account for the boost those new comers are giving to the labor force and consumer spending. Goldman Sachs Group Inc. revised up its near-term economic growth forecasts Sunday. JPMorgan Chase & Co. and BNP Paribas SA were among banks that acknowledged the economic impact from surging immigration in recent weeks. “Immigration is not just a highly charged social and political issue, it is also a big macroeconomic one,” Janet Henry, global chief economist at HSBC Holdings, wrote in a note to clients. No advanced economy is benefiting from immigration quite like the US, and “the impact of migration has been an important part of the US growth story over the past two years.”
Migrant encounters at the Mexico–U.S. border began to surge in late 2020, reaching a record number of 1.73 million migrant encounters in fiscal year 2021, 2.76 million in fiscal 2022, and more than 2.8 million in fiscal 2023. People immigrate to the US to work, reunite with family, study, or seek personal safety. The US government generally allows legal immigration for five broad reasons: work, school, family, safety, and encouraging diversity. People immigrating for work or school are often granted temporary entry rather than permanent residency. Immigration for family generally means the immigrant has a relative who is already in the US as a citizen, green card holder, or temporary visa holder with whom they want to be reunited with. Those who immigrate for safety are refugees or asylum-seekers. And finally, up to 50,000 immigrants obtain green cards annually through the Diversity Immigrant Visa Program lottery that grants entry to individuals from countries with low rates of immigration to the US. Canada offers similar programs.
