Chasing Mexico's Dream Into Squalor

By GINGER THOMPSON
New York Times
February 11, 2001

CIUDAD JUÁREZ, Mexico - Often looking as if he had slept in his clothes, Salvador Durón does not cut the most distinguished figure. But even with his gray stubble and grease-stained fingers, he is welcomed like a king into the shantytowns at the edge of this teeming city on the border with the United States.

Mr. Durón is the water man.

Maneuvering his 15-ton tanker up jagged mesas and down narrow ravines, he delivers water to people the city cannot afford to supply. He is an everyday hero to those who live in the cardboard shacks beneath the broiling border sun.

To the local government, he is a crucial part of the struggle to absorb the tidal wave of workers drawn here each week by increased trade between the United States and Mexico. In the last five years more than one million Mexicans have moved to the border. Many come not to cross the border but to work in thousands of mostly foreign-owned manufacturing plants, known as maquiladoras.

The factories sprouted in the mid-1960's, when Mexico and the United States began an industrialization program along their border to ease chronic unemployment in Mexico. Then with the North American Free Trade Agreement came even more jobs, more shantytowns - and more demand for Mr. Durón.

Most days, he feels as if he cannot keep up. Parking his truck atop a ridge that a year ago was the end of his route, Mr. Durón pointed to hundreds of new shacks reaching out toward the horizon. A mother and three small children emerged from one of the hovels and waved desperately for him to bring water their way.

"The city keeps getting bigger and bigger," he said. "There's no way to get water to everyone who needs it."

Ciudad Juárez, whose people he tries to supply, is only one dot in a rash of overflowing cities and towns from Tijuana to Matamoros. Hundreds of the world's wealthiest companies - Alcoa, Delphi Automotive Systems, General Electric and others - have set up manufacturing plants south of the border, drawn by lucrative tax breaks and cheap labor. While factories pay nearly triple the Mexican minimum wage - about $4 a day - workers here make in a day less than their American counterparts earn in an hour.

The explosion has created one of the most dynamic industrial zones in the Americas - and all of the problems associated with explosive growth. The overwhelmed Mexican border cities lack the means to provide the most basic services. One of the country's powerful drug cartels holds sway here in Juárez and drug-related crime is common. Dozens of women who have come to work in the maquiladoras have been abducted, tortured, raped and murdered, their bodies tossed like garbage in the desert.

All along the border, the land, the water and the air are thick with industrial and human waste. The National Water Commission reports that the towns and cities, strapped for funds, can adequately treat less than 35 percent of the sewage generated daily. About 12 percent of the people living on the border have no reliable access to clean water. Nearly a third live in homes that are not connected to sewage systems. Only about half the streets are paved.

Mirror images of these communities dot parts of the Texas side of the line. Last year the third world conditions became an issue in the presidential race between Al Gore and George W. Bush. Democrats accused the Texas governor of ignoring 400,000 people who live in more than 1,400 unincorporated encampments, or colonias. Mr. Bush lashed back, saying that he and his supporters had done more to bring water, sewage and sanitation services to people than any previous administration.

The new Mexican president, Vicente Fox, has pledged to pump more money into the border region and to lure more workers to Mexico's south. A range of border issues are likely to be raised on Feb. 16 when President Bush visits Mr. Fox's ranch. One of the most pressing crises, officials on both sides agree, is water.

Mexican officials worry that American proposals to send more water to California from the Colorado River could create even more severe water shortages for farms on the Mexican side of the border.

Ciudad Juárez, which grows by about 50,000 people a year, is running out of water. The underground aquifer the city relies on has declined by about five feet a year. At that rate, officials estimate, there will be no usable water left in 20 years. Levels in many of the city's wells are so low that they have collapsed.

"The reality of Juárez is the reality of the whole border," said Gustavo Elizondo, the mayor of Juárez. "You have a city that produces great wealth, but that sits in the eye of a storm. In one way it is a place of opportunity for the international community. But we have no way to provide water, sewage and sanitation for all the people who come to work.

"Every year we get poorer and poorer," he added, "even though we create more and more wealth."

Beyond Her Dreams: $10 a Day

Last fall, Nora Lydia Urias Pérez, a 29- year-old single mother, arrived in Nogales, a border city about 60 miles south of Tucson, with humble aspirations: a job with steady pay and benefits.

A native of the Gulf Coast state of Veracruz, Ms. Urias tried to support herself and her daughter there by working seasonal farm jobs. But on $5 a day, she found it harder and harder to pay for basic necessities.

Within a week she was hired at a small maquiladora (pronounced mah-kee-lah- DOH-rah) assembly line that produced staplers for the Swingline stapler plant, which had been situated in Long Island City, Queens. Her salary exceeded her dreams, she said. It was almost $10 a day.

Her biggest challenge was finding a place to live. She had considered sharing an apartment with 10 others, she said. But she did not want to pay rent, so she decided to move instead to a shanty community outside of town.

With only a pocketknife and their strong arms, she and her father cleared the brush and boulders from a small patch of land in the tumbledown barrio. All around them were hundreds of dwellings in various stages of completion. The best ones, usually inhabited by families who had worked long enough to save money for conventional building materials, were simple structures with walls of concrete block and tin roofs. The newest arrivals built flimsier homes, patched together from crates, old tires and cardboard.

None of the dwellings had running water. None were connected to city sewage lines. Hundreds of improvised electricity wires crisscrossed the dirt roads. The air was filled with the smells of human waste and burning garbage.

But to Ms. Urias, a slender woman with a boyish haircut, it seemed a promised land. She aimed to build a one-room house out of concrete there, something small, but sturdy enough for her 5-year-old daughter to feel comfortable and safe.

In time, she plans to add on. She and her neighbors will one day have safe drinking water and plumbing. And they will, she hopes, win title to the land they have settled. But for now, it was enough for Ms. Urias that she would have a place of her own and a job that paid her year round.

"I am not saying that it will be easy to start life here," she acknowledged, stopping her work to gaze around the shabby community. "But at least there is a chance that things for me will get better. There was no chance of that in Veracruz. I had no hope."

Tens of thousands of workers who come to the border each year cling to the same hope. They spend their days working at some of the most advanced factories in the country, churning out products for dozens of Fortune 500 companies.

And at night, often with only the mildest complaints, they live in squalor. According to a national survey, more than half of the families in Tijuana live below the poverty line, and only 5 percent of all families are able to meet their basic needs without difficulty.

Some of the workers' hideous settlements are in the shadow of the modern factories. Less than a few miles away from a maquiladora park that towers over the east side of Juárez, children attend classes in old school buses that feel like ovens under the desert sun. The community was connected to the city water system last year but residents still had no plumbing. City officials say that a school will be completed sometime this year.

On the west side of Juárez, in a workers' settlement called Anapra that was established almost 20 years ago, residents still do not have running water and indoor plumbing. They wait for the water man.

"He is one of my favorite people in the world," grinned 36-year-old María Elena Beltrán de Medina, speaking of Mr. Durón. Mrs. Medina, whose husband drives a bus that carries maquiladora workers to their jobs, said she was learning to make do with the couple of barrels of water Mr. Durón delivered to her house each week.

She and her children take baths together, twice a week. She uses the same bucket of water to wash laundry and water her cucumber and tomato plants. She drinks one glass of water a day and tries to give her children as much as they want, within reason.

"Right now it's cooler, so they do not get as thirsty," she said. "But in the summer, they need a lot of water. And there is not always enough."

All Those Jobs Can Be Deceptive

With 1.3 million residents, Ciudad Juárez stands like Goliath next to its American neighbor, El Paso, which has a population of a little more than 700,000. Set on the Rio Grande at the point where Mexico touches Texas and New Mexico, Juárez is a metropolis racked by drug-related crime. And the increased presence of the United States Border Patrol often makes the bridges that connect the two cities feel like hostile militarized zones.

Juárez is also an economic powerhouse, the seventh largest city in Mexico with one of the strongest local economies. There are nearly 300 maquiladoras here. Mayor Elizondo said that last year an average of two new plants opened each month, generating 40,000 new jobs. The term maquiladora comes from the Mexican colonial term maquila, which was the fee millers charged to grind corn into meal. The modern version allowed manufacturers to import raw materials duty free, process them into fully or partially assembled goods and ship them back to the United States.

As Juárez helps drive an economic boom in northern Mexico, El Paso lags as an emblem of the persistent poverty that has dogged American cities across the divide. El Paso has lost more than 10,000 manufacturing jobs since Nafta took effect on Jan. 1, 1994. Some were lost when several apparel factories closed because of declining profits, said Thomas M. Fullerton, a border scholar at the University of Texas at El Paso. Others were relocated to Mexico, he said.

Professor Fullerton said that per capita income in El Paso, about $17,000, is only 60 percent of the average income in the United States. And, he said, the 9 percent unemployment rate is about twice the average unemployment rate in Texas.

It is a similar story in most of the major twin cities that straddle the border. Six of the 15 poorest metropolitan areas in the United States - El Paso, McAllen, Laredo, Brownsville, all in Texas, as well as Las Cruces, N.M., and Yuma, Ariz. - are on the border with Mexico.

"They are regions that have been poor for decades," said James T. Peach, an economist at New Mexico State University. "The expectations were that Nafta would change all of that due to increased trade opportunities. That turned out to be a false hope."

Juárez's robust economic indicators are deceiving, said Mayor Elizondo, who considers his city more of a poor country cousin to El Paso.

In 1999, he said, Juárez generated $1.4 billion in direct federal taxes, but its $120 million budget last year was about a quarter of El Paso's operating budget. And Juárez's population is almost twice that of El Paso. In fact, according to city officials, Juárez's budget last year was only slightly larger than the budget for the El Paso Police Department.

Like other mayors of Mexican border cities, Juárez's mayor complained that his city did not get a fair share of the wealth it generated. The mayors are urging President Fox to pursue fiscal reforms so that they will get more money for the infrastructure demands of their growing populations. And quietly, they are discussing ways to get maquiladora operators to cover the costs of roads, water and sewage treatment.

Humberto Inzunza, former president of a maquiladora owners' association, said that last year maquiladora revenues were about $16 billion. The companies, he said, paid an estimated $400 million in corporate income taxes to Mexico, an amount equal to about 2.5 percent of their revenues. They paid another $1.3 billion in social security taxes last year, for some 1.3 million workers. The factories did not have to pay duty on the raw materials they brought into Mexico, nor on the finished products they shipped back to the United States.

That has slowly begun to change, said John Christman, an economic consultant in Mexico City at Maquiladora Industries Service of Ciemex-Wefa. Under a Nafta provision that took effect last month, maquiladora operators are required to pay taxes on machines and equipment that they import for their Mexican plants. And, he said, companies that use raw materials from non-Nafta nations would be charged duties when they export their products back to the United States.

Many of the maquiladoras make annual "contributions" to their local governments to help pay for important projects. In Juárez, maquiladora operators contribute an average of $15 per employee, almost $1.5 million a year.

"It's better than nothing, but really what they give is a minuscule part of all the money they are able to make by having their factories in Mexico," Mr. Elizondo said. "What the maquilas provide to Mexico are jobs. And that is good. It is very good. But it is not enough."

Maquiladora managers disagree. Michael Hissam, the spokesman for Delphi Automotive Systems in Mexico, said the company, the world's largest auto parts maker, operates about 18 plants in Juárez alone and dozens of other plants from Querétaro to Matamoros. Last year, he said, the company paid $37 million in income and payroll taxes. And in Juárez, Delphi gave a $300,000 contribution to the local maquiladora association for infrastructure improvements.

All of the company's plants have full medical facilities, recycling programs and rigorous safety programs, Mr. Hissam said. And many of the plants provide transportation for their workers. Four years ago Delphi began a cooperative program with the Mexican government, and a private home building company to help assembly-line workers with at least one year of seniority buy homes. The program, Mr. Hissam said, has not only helped the company lower turnover rates - which can exceed more than 100 percent a year - it also allowed Delphi to assist almost 3,000 of its 18,000 workers in Juárez move into decent homes.

The dwellings are typically 1,000-square- feet units with one to two bedrooms.

"We feel we have been paying our fair share for a long time," Mr. Hissam said. Referring to Juárez, he added, "This is our city, too, and we want to do for our city the best we can."

Mixed Results, Unmet Promises

Experts estimate that it will take nearly $20 billion to meet the infrastructure needs of the border population. Under intense pressure from environmental groups, the United States and Mexican governments agreed to provide a small chunk of those funds through a development bank that was established in a side accord to Nafta. The North American Development Bank was set up to lend to local border agencies for water-related projects, including treatment plants and sewer systems.

Without doubt, the bank projects have made a difference. Earlier this year, Juárez opened its first waste water treatment plant to help decontaminate 75 million gallons of sewage dumped daily into the Rio Grande. In Reynosa, the bank is helping finance a sewage system, because most of the old one had worn away, leaving muddy veins instead of pipes. And it helped pay for workshops for Mexican utility managers, whose overburdened agencies often use outdated systems and have no reliable ways to deliver services nor to collect fees from consumers.

In all, the agency, which is jointly financed by the Mexican and United States governments, has provided about $277 million for 32 projects along the border over the last four years. But it had promised much more. The goal was to make almost $3 billion in loans to pay for water projects on the border. But so far, it has operated more like a philanthropic organization than a bank. Less than 5 percent of the bank's loan money has been used.

Suzanne Gallagher, the director of project administration at the bank, said that many municipal agencies along the border are not able to obtain the kinds of loans they need to fix their enormous infrastructure problems. So most of the bank's participation in projects has come in the form of grants from the United States Environmental Protection Agency.

Leaders of environmental groups who had warily supported Nafta because they believed in the promises of the bank have been disappointed.

"The challenges are still there," said Jake Caldwell, a policy specialist at the National Wildlife Federation. "The results have been mixed."

Reflecting his commitment to addressing the crisis, Mr. Fox appointed Ernesto Ruffo, a former border state governor as czar of the border. In an interview, Mr. Ruffo said that the Fox administration was exploring ways to attract foreign investment and secure loans for infrastructure projects.

Before he was inaugurated in December, Mr. Fox met with directors at at the North American Development Bank and backed the idea of expanding the agency's role in a wider range of projects. Mr. Fox has also said that he would support changes to make it easier for municipalities to qualify for loans.

Mr. Ruffo said that the new president would look for ways to increase taxes on maquiladoras to help pay for employee housing programs.

"Our people will have houses that are small but honorable," Mr. Ruffo said. "And we are going to ask companies to collaborate on the costs of these houses because they have seen that Mexican workers are responsible, and loyal and want to learn more. But they cannot learn and grow unless they have stable living conditions."

That kind of talk, said Mr. Christman, the economic consultant, has made maquiladora managers very nervous.

"I think you will see a slowdown in the growth of the maquiladora industry until we see how big the increases will be," he said.

Mr. Ruffo seemed aware of those concerns. "We do not want to raise tariffs to the point that companies decide to leave Mexico," he said, "but we also have to find ways to finance the construction of sufficient infrastructure."

However, he and other border experts agreed that money was not the most important part of the solution. Any improvements would not last beyond the next decade, border officials have said, if growth continues at the current pace.

"We can keep pouring more money into the border," said Gina Weber, the United States-Mexico coordinator for the E.P.A. "But if people come at the rate that demographers are forecasting, we will never be able to fix all the problems."