Border economies: McAllen's leadership

By IAN CAMPBELL, UPI Chief Economics Correspondent  |  June 6, 2002 at 2:31 PM
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MCALLEN, Texas, June 6 (UPI) -- This is a story about leadership. How does an agricultural town in the sweltering Rio Grande valley of Texas, close by the border with a much poorer country, become a boomtown? Perhaps it finds gold or oil. McAllen, Texas found instead that there was gold in its proximity to Mexico.

McAllen's boom is not the boom other parts of the United States experienced in the 1990s. It is less a boom of affluence -- of stock options and triple-garaged homes -- than of grass roots opportunity: of a first home and a first car.

Walk down McAllen's less than plush main shopping street and you find El Palacio del Oro -- the gold palace, a low-priced jeweler's -- and in the business districts of the town what stand out are the innumerable used car lots, of Treviño or Javier, and the warehouses offering Ropa Usada -- used clothing -- for wholesale or retail. Used clothing wouldn't have been much use to the dot-com millionaires of the late 1990s. This is down-to-earth business. The old clothes and most of the used cars will find their way to Mexico. And wealthier Mexicans, able to obtain visas that allow them into the border zone, though no further, buy in McAllen's malls, where stores such as J.C. Penney enjoy some of their highest sales per square foot in the whole of the United States.

With its used cars and used clothing, McAllen is in many regards an unlikely boomtown. Its unemployment rate, at 11.3 percent for the McAllen, Edinburg, Mission statistical area, is the highest in Texas and not far short of double the state's average of 6.1 percent in April. Yet even the high jobless rate is in part a reflection of success. People, most of them Mexicans with family connections in the area, are drawn to McAllen because the unemployed do not long remain unemployed here. The jobs, like the people, keep coming.

The statistics tell part of the story. In January 1992 there were 104,600 jobs in the McAllen, Edinburg, Mission statistical area. By April of this year that number had grown to 167,200 jobs, a rise of 59.8 percent. In the United States as a whole the comparable increase over a good decade for the U.S. economy is of just 21.5 percent. McAllen and its neighboring towns have been creating jobs at almost three times the national rate.

The success in doing so reflects a collective effort, the work of many entrepreneurs and community leaders, but the names of certain individuals recur. One of them is Othal Brand, the mayor of McAllen for two decades until losing office in 1997.

Brand is now 82 years old, but cut a tall and imposing figure, even in stocking feet, when your correspondent met him in his home. "I loved to fight," he says, of his days as an amateur boxer. His political style, too, your correspondent imagines, was also combative. He soon comes across as a man of firm convictions, not a subtle man, but a determined one.

"I believe in free enterprise," he says in a southern drawl, and relates how he quickly learned about profit and loss selling fruit on the street as a boy in his home state of Georgia during the depression of the 1930s. "Put the right price on it, and you could sell it," he says. Years later, it was Brand's belief in free enterprise that led him to push development of McAllen's foreign trade zone, an area south of the town and close to the border, where firms from around the world have established plants, many of them linked to maquiladoras -- assembly plants able to import their inputs duty-free -- on the other side of the border.

"I didn't like Brand when I first knew him," says Mike Allen, the head of the McAllen Economic Development Corporation. His name, oddly similar to that of the town, as though some fate is being worked out, is another mentioned often by businessmen in McAllen. At the time of those first encounters with Brand, many years ago, Allen was a priest in McAllen, who found himself "spending much of my time trying to find jobs for poor Mexican families." Allen later left the priesthood and began to work in economic development at state level in Austin, Texas. It was from there that Brand plucked him.

Allen went to work creating jobs not just in McAllen -- and it is here that the leaders had a large element of vision -- but in Reynosa, the untidy town across the border where maquiladoras had begun to be set up in the 1960s. "For every four jobs we create in Mexico, we get one in McAllen," says Allen. Allen says that the MEDC has been aggressive, traveling the world to bring companies to McAllen and to Reynosa and elsewhere in Mexico. Twenty-two Japanese companies have come in the past few years, Allen says.

One of Allen's main recruits, Keith Patridge, is another much-mentioned name, praised by businessmen for his intellect. Patridge told United Press International of the trip planned to Ireland to study how it is that Ireland's education system has in a few decades turned its workforce from a weakness into a strength. The MEDC works with teachers in the town. This focus on education and training is another element in the enlightened thinking that has helped to carry McAllen forward. "The solution to poverty, first, is education. You must have education today to earn a living," says Brand. "We were the first town in the area to put air conditioning in our school and to build a community college," he says.

Education standards are often a victim of high levels of immigration. A teacher from nearby Weslaco tells your correspondent that children there are some way behind those he has taught further north, on the U.S. East Coast. In McAllen, however, schooling standards are good. The town's leaders and teachers have worked to ensure that is the case.

McAllen's success is an inspiring one. Crime is not high in the town. People are happy to live here. The elderly come here to retire. New Mexican immigrants have been welcomed and incorporated. Political division has been avoided.

McAllen deserves praise. It has turned what might have been the problem of proximity to Mexico into an asset. Part of the reason for that are the principles of enterprise, trade and education that Brand formed as a boy during the Depression. He has helped to create a town in which business and people can thrive.

But the success is something shared. Allen speaks highly of the cooperation he has received from the mayor since 1997, Leo Montalvo. Reports in the excellent local newspaper, The Monitor, show how the Hispanic community is taking a lead in the town: Amelia Molina's work establishing relations with Mexico and helping the Mexican community in McAllen has made her the Chamber of Commerce's woman of the year. A local business paper photographs the annual social event organized by Sally Cuellar.

This is a community that wants to overcome problems, work together and advance. The spirit of McAllen's immigrants, all seeking a better life, is part of that. In this regard McAllen's success is quintessentially American.

(This is the first of a series of articles commenting on economies on international borders. Comments to

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