Last week I had the privilege of speaking to the members of the Ibero-American Council for Investment and Talent (CiiTA) in Madrid.
The issue that brought us together was the relationship between the United States and Ibero-America, in the context of the concern caused by Trump’s disruptive behavior in the transatlantic relationship. I began by commenting on the trends emerging from the recent economic data and current political developments. I first shared with the audience the fact that, even in a context of adversity, there is a triangle of opportunities in the geo-economic triangle formed by the United States, Spain and Latin America.
Indeed, there are great opportunities despite the relative economic slowdown in Latin America; the concerns about Trump’s tariff war policy, as well as the fiscal deficit that his tax reform will generate in the short term; or the uncertainty about political change in Mexico with the election of López Obrador, or the authoritarian drift that persists in Cuba, Venezuela and Nicaragua -despite it all. These are disturbing developments, but they should not blur the potential of a huge market in which the world’s leading economy (the United States) interacts with the ninth (Brazil), the twelfth (Spain) and the fifteenth (Mexico) biggest ones. These four engines of growth undoubtedly allow for a positive outlook and a solid guarantee of success, especially if we work systematically on this potential in the field of the common values and identity offered by Hispanic culture and the Latin American diasporas.
Then, I largely focused on a very important trend; the growing economic and political power of Hispanics in the United States. With regard to Hispanics and the United States, I dared to suggest that, more than being in a relationship with Ibero-America, the northern giant is a country whose diversity makes it part of Iberoamerica. And no other conclusion can be reached when the following data is considered: a significant part of the continental United States has a Hispanic historical origin (Florida, Texas, Arizona, Colorado, New Mexico, California, Oregon, and Nevada) plus, if we add the insular territories, you have Puerto Rico. These territories are home to nearly 60 million Hispanics or Latinos. Saying this reminds us of the waves of immigration that the United States has received, but many of these Hispanics did not cross the border, rather the border crossed them.
Hispanics in the United States are the fastest growing organic demographic group. And not because there is an overwhelming increase in the number of immigrants in general, or undocumented immigrants –which totals 12 million people. In fact the number of undocumented migrants of Mexican origin is a net negative flow, according to research by the prestigious PEW Research Institute, since over the last two decades more people have returned to Mexico than have left for the United States. Culturally, the Hispanic family is very numerous and in the United States it has found a way to develop itself and succeed, which not only means that it makes a great contribution to society, but also that it is an optimistic and very dynamic group.
Two facts surprised the audience: 29% of new businesses and almost a third of small U.S. businesses are Hispanic-owned, and are financed almost exclusively by their owners’ savings, or those of family or friends. The potential for banking penetration and financial inclusion that this represents is clearly overlooked, considering that Hispanics consume 1.7 trillion USD in the United States, and their businesses contribute 1.4 trillion USD to U.S. economy. The second figure is political: there are 39 electoral Latino minority-majority electoral districts in the United States, that is to say, Hispanics are in the majority; and on a national scale, some 12 million Hispanics vote, but a total 27 million people are eligible to vote: 17% of the electoral population is Hispanic. Even in states or electoral districts where Latinos are a minority, they can be the deciding force, particularly in the so-called “swing states”. In fact, 4% of elected officials are Hispanic, and organizations of great weight and national influence, such as the Latino Victory Project, of which I am Board member and former Chair, are exclusively dedicated to closing the gap between that 4% representation and 17% of eligible voters. As a result, the trend of economic and political empowerment of Hispanics is irreversible. According to PEW and Brookings studies, Hispanics will reach 24% of the country’s total population in 2045, the year in which the non-hispanic white population will be less than 50% of the total. By 2050, the Hispanic population is projected to be 30% of the total U.S. population.
Hence, I made a very simple proposal to my audience on that day: Spain’s and Latino U.S. leaders need to come close and forge an strategic alliance. Particularly because Trump, instead of taking and developing the opportunity that lies in front, is promoting an American-centric vision that turns its back on the immense potential I have pointed to above. Trump’s attitude, which has concrete political and economic consequences, with the exploitation of certain expressions of racism and xenophobia, has domestically taken measures against Latino immigrants, created tensions with Mexico affecting the NAFTA system without an alternative, abandoned the policy of cooperation with Central America, reverted the opening of relations with Cuba, and has acted head-on criticizing Europe – including Spain – jeopardizing not only trade and investments flows, but also the fundamental NATO alliance.
This state of affairs opens up an opportunity for Spain and U.S Latinos, whose formidable advantage is its common language and cultural roots, a powerful heritage with incalculable possibilities for mutual gain. The opportunity is wide open for exchanges of all kinds in the short, medium and long term. Spain’s and U.S Hispanic leaders can and must play a fundamental role alongside in building a triangle of opportunities with Latin America, which, amidst global trends and the emerging power of the Pacific and Asian economies, has without a doubt the potential to be an unparalleled driving force in the transatlantic relationship. Leading the Iberoamerican triangle of opportunities is a challenge that must be met not despite Trump’s ranting, but precisely because of it.
Leopoldo Martínez tweets at @lecumberry