EOW May 2007

Transat lant ic Cable

Of related interest . . . US government money for free-of-charge instruction in the English language is supplemented at varying rates from state to state, for a patchwork of programmes that according to advocates does not come close to meeting the need. The Department of Education reported that 1.2 million adults were enrolled in free public English programmes in 2005 – about one in 10 of the 10.3 million foreign-born residents 16 and older who speak English not at all or ‘less than very well,’ according to Census figures from the same year. As immigrants increasingly settle away from large urban centres (the suburbs of New York City have seen a net gain of 225,000 since 2000, compared with 44,000 in the city itself), many face a long wait for admittance to the government- financed English classes. A survey last year by the National Association of Latino Elected and Appointed Officials found that, in 12 states, 60% of the free English programmes had waiting lists ranging from a few months to as long as two years. ❈ China may sell its US Treasury bonds, auguring a rate rise for Americans. The government of China said on 9 th March that it would look for more aggressive ways to invest sizable portions of its massive foreign-exchange reserves, the world’s largest. Analysts said the new Chinese pool of money, expected to total $200 billion to $300 billion, would instantly create one of the world’s most powerful investment funds. In the Chicago Tribune for 10 th March, William Sluis wrote: “With much of China’s $1.07 trillion in currency reserves invested in ultrasafe US Treasury debt, a significant shift out of the American bond market could have an impact on American consumers. Interest rates would rise, making it more expensive to borrow money for a home mortgage or car loan or to pay credit card debt.” Chinese officials said they planned to form a government agency – the State Foreign Exchange Investment Co – to manage some of its holdings. Mr Sluis saw in this an indication that China has tired of earning small and predictable returns and wants to look elsewhere. The announcement should not have come as a surprise. The Chinese have been threatening for several years to look for new investment opportunities for their ample reserves. Even so, for the last decade Americans have more or less taken for granted huge holdings of Treasury bonds by both China and Japan. Their portfolios of the reliable ‘T-bills’ have helped to hold down long-term interest rates in the US, especially for house buyers. For Americans, ‘this will be a challenge, no doubt about it,’ economist John Silvia of Wachovia Corp, told the Tribune . “It likely will mean higher mortgage rates and a weaker dollar. But these effects could take five or 10 years to be fully felt.” Another economist, Chicago-based William Hummer, of Wayne Hummer Investments, took the view that Americans should Fiscal Matters

Immigration

Microsoft chairman Bill Gates offers his own recommendation for US excellence: an infusion of foreign talent When Bill Gates addresses himself to the subject of US competitiveness in the global economy, it is no surprise to hear him identify innovation as key. It is also to be expected that the founder of Microsoft Corp will praise the scientists and engineers, trained in American universities, who pioneered the microprocessor technologies that made his very considerable fortune. (Worth $56 billion in 2006, Mr Gates was the world’s richest man for the 13 th consecutive year.) To keep that stream open, Mr Gates stresses the need for strong schools to ensure that young Americans enter the workforce with the maths, science, and problem-solving skills they need to succeed in the knowledge economy. This is widely conceded to be a matter of some urgency. On an international maths test given to high school students in 2003, the US ranked 24 th among the 29 industrialised nations surveyed. What is more surprising, coming from Mr Gates, is the second part of his prescription for American competitiveness in the global economy: immigration reforms that reflect the importance of highly skilled employees from overseas. He asserts, “We must make it easier for foreign- born scientists and engineers to work for US companies.” In an open letter to the Washington Post , Mr Gates observed that demand in the US for specialised technical skills has long exceeded the supply of native-born workers with advanced degrees. The United States provides 65,000 H-1B (temporary, non-immigrant) visas each year to make up the shortfall, but this is not nearly enough to fill even the technical positions available now. (“How to Keep America Competitive,” 25 th February). In Mr Gates’s view, permanent residency regulations compound the issue. Temporary employees wait five years or longer for the permanent-resident accreditation (‘green card’) that usually precedes full citizenship. Mr Gates notes the problem here: “During that [waiting period] they can’t change jobs, which limits their opportunities to contribute to their employer’s success and overall economic growth.” Last year, reform on immigration issues stalled as Congress concerned itself with border security. With lawmakers again taking up these issues, the Microsoft chairman urged changes to both the H-1B visa and the green card programmes. According to Mr Gates, who must know a thing or two about such matters, highly skilled professionals from other countries ‘are vital to US competitiveness, and we should welcome their contribution to US economic growth.’ Mr Gates also advised the US to encourage foreign students to stay after graduation. Half of the country’s doctoral candidates in computer science come from abroad. The Microsoft chairman told the Washington Post readers, “It is not in our national interest to educate them here but send them home when they’ve completed their studies.” ❈

54

EuroWire – May 2007