Is there a Latino foreign policy?
By Antonia Hernández and Solomon Trujillo,co-chairs of the Task Force on Latinos and Foreign Policy, organized by the Pacific Council for International Policy
Brazilian President Dilma Rousseff’s visit to the U.S. this week had the potential to repair the bilateral relationship between the hemisphere’s two largest economies and refocus U.S. foreign policy in its own neighborhood. Instead, Americans and Brazilians will bemoan another missed opportunity.
Contrasted against the red carpet rolled out for Indian Prime Minister Manmohan Singh – state dinner, honor guard, Jennifer Hudson – the lack of pomp and circumstance surrounding President Rousseff’s Washington debut is downright dispiriting.
President Obama’s announcement of a U.S. “pivot” toward Asia late last year left many Latinos scratching their heads. It is hard to understand why the Obama administration – and others before it – would hesitate to give a higher priority to our own hemisphere when redeploying the nation’s economic, diplomatic, and military assets. A pivot toward markets much closer to home would better serve the national interest. Such a “Latino foreign policy” would reflects our country’s changing demographics and allow our leaders to pay closer attention to the political, economic and social development of their own hemisphere.
The Power of the Purse… and the Contention for Power
by Sol Trujillo1
Political power is not just the voting power of people but also their purchasing power. It is the power of the purse – which is people plus wealth.
- In a democracy, numbers count - the number of people - because people are voters. Voters are important because they resolve issues via the referendum and participate in elections to decide who governs.
- In an economy, wealth counts - as do those who create it and those who use it to consume, invest, and build. Purchasing and investment power result in jobs and income and create new foundations for future wealth creation.
- In politics, where we decide who governs and whose values are advanced via public policy, people and money join hands.
Just having a lot of people is not enough. China is only the most recent example. China has always had big armies and a lot of people, but China's global influence began to rise with its increasing per capita wealth, a growing middle class and surplus wealth that could be invested in the future.
By contrast, there are many wealthy nations – many more wealthy than China, e.g., Switzerland and Norway – that have few people and only limited influence on the course of events.
The same dynamics that operate between nations also operate within a nation: Political power is rooted in economic power.
Having the numbers to elect leaders to shape decisions about a nation's political, cultural and economic life is important. But when large numbers are coupled with growing wealth you get the power of the purse.
In the United States, the growing power of the purse is seen most dramatically in American Hispanic communities, which is characterized by:
- rising per capita income,
- an appetite for consumption that is fueling new household spending, and
- entrepreneurship, a distinctly American quality with deep roots in Hispanic culture.
Some facts: The domestic emerging market of US Hispanics currently totals more than 50 million people – 16 percent of America's population of nearly 310 million. This is a very large number by any measure.2
Indeed, if America's Hispanics were a nation, it would rank #24 in population among the world's 193 nations – ranking a bit smaller than Great Britain and Italy and larger than Korea and South Africa.
More importantly, even the large size of the American Hispanic population is over-shadowed by its own dynamics. Consider just a few examples from the 2010 Census:
- The Hispanic population is growing… fast. Over the past decade, the non-Hispanic US population grew a modest 9 percent; the American Hispanic population grew a whopping 43 percent;
- The Hispanic population is young – more than 34 percent are under 18; compared to 23 percent for the rest of the US population; and
- The US population as a whole is older – more than 14 percent are over 65, while less than 7 percent of Hispanics are over 65.
Hispanic America's growth prospects are even more important than its current size and wealth. According to U.S. Census forecasts:
- The US Hispanic population is poised to grow by 83 million by the half century mark – from the current 50+ million to 133 million by 2050, making America's Hispanic community larger than the current population of Japan and just short of the current population of Russia, and both of these nations are now experiencing negative population growth rates.
- Using an easy-to-understand context, the growth of Hispanic America over the next 40 years will be equivalent to adding 10 additional New York Cities populated only with Hispanics. Indeed, Census Bureau Director Robert Groves opined that the growth of the Hispanic population is one of the big stories from the 2010 Census…and he was absolutely correct.
That's the people part of the "power of the purse". Now, let's look at the American Hispanic community from an economic perspective. For example, the new Census shows that U.S. Hispanic purchasing power, which now exceeds 1.0 trillion, will top $1.5 trillion by 2015.
That means the Hispanic market in America would be the 11th largest economy in the world – just below France, Italy and Mexico and above Korea, Spain, Indonesia and Turkey.3 Put another way,
- If the American Hispanic community were a nation, it would be one of the world's most important "emerging markets."
- American Hispanics' purchasing power per capita (at $20,400) exceeds the GDP per capita of every one of the four BRIC countries – Russia ($15,900), Brazil (10,800), China ($7,600), India ($3,500) – and most of the remaining "G-20" nations: South Africa, Mexico, Argentina, Indonesia and Turkey (excepting only Korea, Saudi Arabia and Australia).4
- If the American Hispanic community were a nation, it would be a member of the "G-20," the international forum of the world's richest nations.
It's not just the economic growth that counts. It is also the economic dynamism and demand for goods and services that demands attention.
For example, the growth in wealth is advanced not only by population growth but also by expanding entrepreneurship. The American Hispanic community already includes nearly three million Hispanic-owned businesses – as documented by the Census, HispanicBusiness.com, Entrepreneur magazine and other sources – and these numbers are growing significantly every month.5
Growth in wealth is also advanced by expanding international business, and here again Hispanics in the US are a huge and growing asset. Consider the following:
- The U.S. exports 2.6 times as much to Latin America as it does to China.
- By leveraging family ties, cultural affinities, and a shared language, U.S. Hispanics give the US a competitive advantage in doing business with a rapidly growing $6.4 trillion market of 579 million people in 21 countries plus Puerto Rico.6
- Going forward, U.S. Hispanics are uniquely positioned to facilitate further U.S. business expansion with Latin America both on a bilateral and a multilateral basis, through trade groups such as NAFTA, MERCOSUR, and others.
The contributions of America's Hispanics to the nation's wealth and well-being going forward cannot be denied. American Hispanics who have been here for generations have already made their mark - in business, sports, entertainment, and politics.
Recently arrived American Hispanics bring new energy, connections, and know-how that are badly needed at every level of the workforce in modern American society, and their contributions will be critical to our nation's future growth and development.
Indeed, the importance of American Hispanics to the US is not limited to Hispanic entertainers or sports icons who make a lot of money. Nor is our importance limited to entrepreneurs, scientists, and engineers who invent things and create businesses that provide jobs, pay taxes and deliver goods and services. It is all this but there is more.
The importance of American Hispanics also includes our contributions as workers, inventors, creators – people who make things, mine things, grow things, and move things around. From construction and laying bricks to harvesting and landscaping, we find Hispanics doing the heavy lifting. Farmers, ranchers, miners; butchers, bakers, and bankers; homebuilders and landscapers, restaurateurs and road builders – all of these and others increasingly turn to Hispanic labor when there is work to be done and only Hispanics raise their hands.
In short, American Hispanics provide brawn, brains, and skills at every level and in every sector of America's turbulent and ever-changing economy, and that impact needs to be better measured and more widely understood.
As we approach the election season, a time when Americans will be thinking about our nation's future, we should be mindful of our heritage as a nation of immigrants and the moral and cultural implications of the world-famous poem of Jewish-American poet, Emma Lazarus, carved on the pedestal of the Statue of Liberty, inviting those seeking a new life to build it in America.
Hispanics – and especially those from the Western Hemisphere – have answered the call. The result is a huge asset – America's large and growing Hispanic community. That community is a big plus for America, by almost any measure, and not only because it constitutes a huge emerging market right here in our own backyard.
We need always to affirm what is good about America. In so doing, let's always remember that a large part of America's good is America's Hispanic community and its growing, connected, ambitious, family-oriented, increasingly educated, upwardly-mobile – and, let us not forget, increasingly productive – population.
Honor America's heritage and you honor Hispanic Americans. Consider America's future and you find that Hispanics will continue to enrich America, give substance to the American dream and increase our nation's and our Hemisphere's wealth and influence vis-à-vis the rest of the world.
If we remember the importance of purchasing power – wealth plus people – we will find a vibrant Hispanic market that is expanding in every sector – right here in the US and in Spanish-speaking cultures around the world.
1. Solomon D. Trujillo, chairman of Trujillo Garcia Holdings, has served as CEO of high-cap media-communications companies in the US, the EU and Australia. A digital pioneer and a long-time champion of high-speed broadband to increase productivity and advance innovation across all sectors of the economy, Sol is actively engaged in media-communications businesses in both developed and emerging markets, from China and South Asia to North America, Europe, Africa and the Middle East and sits on corporate boards in the US, EU, and China – including Target and Promerica Bank of Los Angeles, where he is vice chairman; and China’s Silk Road Technologies, where he is board chairman.
2. According to the Census, America's 50+ million Hispanics include those from Cuban, Mexican, Puerto Rican, or South or Central American origin – or others of Spanish origin, regardless of race. Hispanics of Mexican origin account for 63% of all Hispanic Americans and have had the largest increase since the 2000 Census – growing from less than 21 million in 2000 to nearly 32 million by 2010, an increase of 54% which accounted for 75% of the over-all increase in America's Hispanic population. Others contributing to the increase were, in order, Cubans and Puerto Ricans. Among those of Central American origin, most came from El Salvador (1.6 million) followed by Guatemala (1.0 million) and Honduras (633,000). Hispanics from South America are led by those from Colombia (909,000) followed by Ecuador (565,000) and Peru (531,000).
3. International Monetary Fund, World Economic Outlook Database, September 2011, Nominal GDP list of countries. Data for the year 2010.
4. CIA World Fact Book, 2010.
5. Tamara Monosoff, "Embrace the Hispanic Market," Entrepreneur, November 12, 2009. And for Hispanics, a business is a family affair. While 54 percent of the general population of business owners plans to pass their businesses on to their children, 70 percent of Hispanic business owners plan to do so. On this point see, http://bit.ly/ti5fzZ, "Who most embraces the American Dream? Hispanics!"
6. CIA World Fact Book, 2010.