Rising gas prices are causing some Californians to head to the border. Photo: Thomas Hawk (flickr)

Rising gas prices are driving Californians to fill up in Mexico, according to the Wall Street Journal.

Gas is approaching $5 a gallon in San Diego — twice as much as it is in neighboring Tijuana. Many Californians not only filling up in Mexico, they're even installing extra-large fuel tanks in pickups and work vehicles for later use, often bringing back enough to sell in California for a large profit.

Suppliers of fuel tanks and San Diego auto shops are happy at the phenomenal business. For example, fuel tank company Transfer Flow made more than half a million dollars in May alone.

But many Mexicans are unhappy about the “gringo invasion," which has meant long lines at gas stations and diesel shortages. This week, the number of Tijuana stations offering diesel dropped significantly. Many stations are beginning to refuse to serve Americans.

Historically Pemex, the Mexican state oil monopoly, set gas prices along the border within a few cents of U.S. prices, deterring motorists from comparison shopping. But as gas prices have shot up in the U.S., Mexico has kept its prices down with massive government subsidies to keep gas affordable for Mexican citizens. But these subsidies are causing problems for the government's budget. In fact, an additional $20 billion dollar subsidy was added to the Mexican federal budget as an emergency measure in May, as part of an effort bolster the economy.

And because Mexico doesn’t have the refinery capacity to turn their own oil into gasoline, it imports a large percentage of its gas from the U.S.. So by subsidizing the fuel — and then reselling it to U.S. citizens at cheap rates — the Mexican government is losing money any way you look at it.

Ciclovía Documentary shot by Streetfilms

Bogotá, Colombia is holding a 70-mile long block party. And everyone’s invited.

Ciclovía — "bike path" in Spanish — is an event that closes down major roads for pedestrian use every Sunday and holiday from 7 a.m. to 2 p.m. Created in 1976, it rapidly grew from eight miles and 140,000 bicyclists to 70 miles and an average of 1.5 million weekly riders. Ciclovía is championed as a community building event that attracts people from all backgrounds for a day of biking, walking, skating and dancing in the streets.

In the above video, Bogota’s former park commissioner Guillermo (Gil) Penalosa discusses Ciclovía’s main appeal: social integration.

You will see people in $5,000 bikes and others in $50 bikes, and all having the same fun! Rich and poor, young and old, men and woman, tall or short... ALL!

Cited for “endless benefits” such as the improvement of personal and public health, Ciclovía has inspired other cities to develop similar programs, including Guadalajara, Mexico; Quito, Ecuador; Santiago, Chile; and Paris, where an expressway along the Seine is transformed into a pedestrian refuge one month out of the summer.

Cities in the U.S. are also developing similar programs, starting with El Paso, Texas. This Sunday Portland, Ore., is clearing 6 miles of roadway for six hours in its inaugural "Sunday Parkways." New York Mayor Michael Bloomberg announced his city's plans for Ciclovía-like event this August that would stretch from 72nd to the Brooklyn Bridge along Park Avenue.

Events such as Ciclovía are not only free, but they also bring all sorts of people together to get healthy and build a happy community. It seems like a no-brainer that every city should have a Ciclovía!

Today, Felipe Calderon announced Mexico would freeze prices on 150 basic foods through the end of the year to help ease the pain of rising food prices.

Mexico City. Photo: Yetto (flickr)

Are the southern states of Mexico – Chiapas, Guerrero and Oaxaca – getting left out of Mexico's economic growth?

An April 24 article in the Economist suggests that there is a growing socio-economic gap between these three southern states and the rest of Mexico. In 2000, Mexico’s GDP per capita was $7,495, compared to a combined average of $3,634 for Chiapas, Guerrero and Oaxaca, according to a World Bank report. Furthermore, the percentage of people living in extreme poverty – less than $1 a day – was 54-56 percent in the south, compared to 23-25 percent nationwide.

Recently, the government has proposed using large-scale infrastructure projects to address this economic disparity.

In 2001, then-President Vicente Fox released his Plan Puebla Panamá, a project to link southern Mexico and Central America with northern Mexico. It primarily provides funding for building highways and new air and sea ports.

More recently, current President Felipe Calderón announced plans for a six-year, $28.7-billion road investment project. A significant part of the plan focuses on southern coastal regions.

Critics argue that investing in infrastructure isn’t enough to promote economic growth in the south. José Antonio Aguilar, a government official from the state of Puebla (another southern state), tells The Economist that they have experienced “a total transformation” in state infrastructure "but we haven’t been able to turn this into growth in income." Likewise, Miguel Pickard for CorpWatch.org worries that these top-down approaches tend to overlook Mexico’s poor.

To what extent will these ambitious infrastructure projects close Mexico's north-south poverty gap?

It's well-known that women's empowerment and economic development go hand-in-hand — which is another reason to support a Mexican woman's fight to allow women in rural Oaxaca to vote.

Women can vote in places as conservative as Afghanistan, as repressive as Burma and as closed-off as Bhutan, but the L.A. Times reports that women in rural Oaxacan communities cannot vote or run for office.

One woman, Eufrosina Cruz, is fighting for a change in Oaxaca, Mexico's second poorest state. (Three of four Oaxacans live in "extreme poverty.") Her state governor and Mexican President Felipe Calderon now support a change in legislation, which would grant thousands of Oaxacan women the right to vote and run for office.

Women in neighboring Guatemala can vote. Photo: El Canche

To some the word "immigration" evokes an image of people standing in line at Western Union, waiting to wire money home to families for groceries and clothing. It happens thousands of times each day all over the world. All those remittances — the small amounts of cash wired across borders — add up to a whopping $300 billion a year.

Dilip Ratha believes this $300-billion industry can play an important role in international development. He's a World Bank employee who is working to make it easier for migrants to transfer money and direct the cost savings towards economic development in their own countries.

Skeptics argue that if remittances equaled development, Mexico would look like Switzerland. Ratha might argue that without remittances, Mexico's economy might look a whole lot worse. His new paper suggests that Africa could add as much as $3 billion to public coffers just by reducing the costs that migrants pay to send remittances. (Currently, charges on these cross-border money transfers can be as high as 10 percent.)

Ratha hopes to prove that hundreds of billions of remittance dollars can be funneled toward poverty alleviation by making simple policy changes.

His personal story has shaped his beliefs. In the U.S., he earns a salary that is 100 times what he could have earned in his birthplace of India, and his own remittances have helped build schools and pay medical bills there.

And while the negative impacts of immigration often make headlines, Ratha stresses that there are costs of not immigrating, too — costs borne by people living in poverty and by everyone in the global economy.

The New York Times reports that despite concern over Nafta among Mexican farmers and U.S. big sugar companies, in time Nafta should make the U.S. consumer and the Mexican farmer better off.

Today, Business Week takes a look at how Mexico is benefiting under Nafta -- but why the free trade agreement hasn't solved all of Mexico's economic woes.

There's no question that the country has benefited greatly from Nafta: Mexico has become the world's 15th-largest exporter, sending abroad $272 billion of merchandise in 2007 ($43 billion of which was oil). It transformed a $3 billion trade deficit with the U.S. in 1993 into a $75 billion surplus in 2007. Mexico went on to sign free-trade agreements with 41 other countries, attracting some $223 billion of foreign investment in 15 years.

So, why did tens of thousands of angry Mexican farmers take to the streets in late January, demanding that Nafta be renegotiated? Because after a decade and a half of free trade, Mexico's economic transformation is incomplete, and many Mexicans are blaming Nafta for a plethora of problems that have more to do with bad government policies than with free trade.

While the immigration debate in the United States is largely focused on the U.S.-Mexico border, an article from National Geographic looks a bit farther to the south. An estimated 400,000 migrants from Central America cross the border into Mexico every year, and though some stay to work in Mexico, most are headed for the U.S.

The economic prosperity of the U.S. has a strong pull effect on the Latin American poor, and the money that migrant workers send home to their families is having an increasingly large impact on their national economies. In Honduras, for example, remittances sent home from the U.S. made up one-fifth of the country’s gross national income in 2006.

“There is no solution to this,” a former Chiapas state official said wearily, after ticking off a list of southern border upgrade programs that have fizzled into ineffectiveness over the past decade. “You can put all the control measures down there that you want, but it’s not going to be fixed. The solution is to eliminate poverty.”

Business Week's "The Ugly Side of Microlending” presents a seemingly untold story regarding microfinance. Many (if not all) in the aid and development sector laud the triumphs of micro-credit for the world's poor; and, in truth it has been a driving force for positive change in a number of people's lives. However, when there is a profit to be made a variety of more unsavory business practices arise.

Keith Epstein and Geri Smith do a great job of investigating the variety of for-profit banks that operate within Mexico, painting a bleak picture for unsophisticated and largely uneducated borrowers. Drawn by lack of regulations and a government bogged down by corruption Mexican banks are charging anyway from 50% to 120% annual interest on loans.

So, what does that mean exactly? After a 104 week payment plan of $23 a month, an average borrower will end up paying more than double for a $1,100 Whirlpool refrigerator. What's more-- large corporations such as Wal-Mart are moving onto the scene, having obtained their Mexican banking license last year.

The flip side of microfinance is one that should receive more attention. With the advent of micro-credit to the world's radar screen one cannot blithely assume that all lending institutions are created equal. So what's the answer? More regulation? Increased education? I suppose one cannot discount that America has similar institutions-- the Pay Day cash lending services that frequently appear in strip malls often invite sharp criticism domestically. Either way—it seems clear that for profit banking institutions charging astronomical interest rates seem to be perpetuating the very poverty they are supposedly attempting to alleviate.