Centennial Campaign Building Community Connections

By on May 18, 2014

By: Robert Gray

As the head of a new El Paso-based think tank, Patrick Schaefer hopes to answer some of the region’s most intractable social and economic questions.

Why is it that El Paso’s median income was on par with the nation in the 1950s but is now at least 30-percent lower, and what might turn that around?

Why do some college grads have to leave El Paso to find good jobs, and what could bring them back?

How significant is the region’s “hidden” purchasing power?

Schaefer is the executive director of the Hunt Institute for Global Competitiveness at the University of Texas at El Paso, which is backed by businessman and philanthropist Woody Hunt.

Last month, the institute’s creation was announced by Hunt, CEO of Hunt Companies, and UTEP President Diana Natalicio. The Hunt Family Foundation donated $4 million to UTEP’s Centennial Campaign to establish the institute.

What makes the institute unique is its focus on what it calls “trans-boundary economic and social development.” It will study how a metroplex encompassing three states and two nations, divided by a jumble of county, city, state and federal boundaries, can work better together.

The idea is that each division exacts an economic cost – bridge wait times on the U.S.-Mexico border, for example – so that helping the various jurisdictions better understand each other and work together can have a real world impact, Schaefer said.

So the institute will collect data and write research reports in five areas: business and economic development, energy and natural resource management, infrastructure and urban planning, public health, and education. The data is being published on the institute’s website,HuntInstitute.utep.edu.

Besides his job as director of the institute, Schaefer is also an adjunct law professor and teaches at universities in Juárez as well as at UTEP.

Before taking the job at the institute, he was an assistant district attorney in Las Cruces, New Mexico, and, before that, worked for the World Bank in Washington, D.C.

Schaefer received his law degree from the University of New Mexico School of Law. He took an unconventional path to graduation, studying abroad in Mexico and Brazil.

He received his master of laws degree from the Universidad Católica Portuguesa in Portugal, where he was a Fulbright Scholar.

Schaefer said he’s always been interested in comparative systems – specifically, how different countries deal with similar issues.

He has also worked as a Peace Corps volunteer in Honduras and for the Organization of American States and the Inter-American Development Bank. He speaks Spanish and Portuguese, as well as English.

Schaefer sat down with El Paso Inc. and a talked about why the institute is needed, what it will do and how it might answer some of those sticky questions.

Q: Why do we need an institute like this? Do other communities have them?

This is one of the fascinating things about the institute and the vision we are trying to accomplish here. Nowhere else in the world really is there an economy so large and a community so large that is at the same time split among so many jurisdictions as this one.

Q: El Paso is on the border of three states and two nations. Then you have to add in the various counties and cities and all the other jurisdictions in between that make up one single metroplex. Makes things complicated.

That’s why we need an institute like this. If you look the world over, there aren’t that many trans-boundary economies to begin with. Even fewer share so many jurisdictions and even fewer are this large.

Q: You really don’t find many of these kinds of metroplexes around the world?

No. The largest trans-boundary cities are here on the U.S.-Mexico border.

Q: What interests you most about the institute’s work?

We have 2.5 million people in the region more or less, and all of us make up one economic unit. This is the whole crux of the institute: There is one economic unit, this whole mass of people living their daily lives, shopping, investing, studying, and many of us do all this without too much thought to the borders.

But you take a step back and you say, “Well, what kinds of things could be alleviated so that we have an even stronger economic base such that we can create even more opportunities for our children?”

Q: What is the institute going to do?

The institute is working to develop a very detailed understanding of our region. It is going to do that primarily through two tracks. The first track is through data collection and knowledge sharing. We are compiling the data now on our website. The second is the development and distribution of economic research.

The data collection is important because there are a lot of problems with the data in our region, in particular with respect to economic impact and economic growth. Because of the complications collecting data in a trans-boundary region, there are data sets or indicators we would like to have that we don’t.

We have identified five key focus areas: business and economic development, energy and natural resource management, infrastructure and urban planning, public health, and education. We’ve collected an ever-growing list of official data sets in those areas at the municipal, county, state and federal levels.

Q: How does collecting more data help?

Take water, for example. Juárez is heavily dependent on ground water. That sounds sort of abstract, but you start to ask: What in Juárez depends on ground water? Well, the manufacturing industry, and Juárez is the industrial powerhouse of our region.

So imagine if the economic motors of our region are suddenly imperiled because of water issues. The aquifers that Juárez depend on, particularly the Hueco-Mesilla Bolson, extend across a number of different jurisdictions and boundaries. What are the draw down rates? What is the quality of the water? Where is the water? How is it shifting?

Honestly, not many people are aware of that and water is a huge economic issue for the future of our region, for attracting businesses, for attracting development and for attracting foreign investment.

Collecting the data that is available also helps us find out what data we need but don’t have.

Q: What is an example of data that are needed?

There has been a lot of curiosity in El Paso, for example, about retailers and recruiting new shops and restaurants to the city. But the retailers at the national level are often concerned there isn’t the purchasing power here.

We know there is, but a lot of these retailers don’t have the data. Tracking purchasing power here escapes us because of the reliance on cash by consumers here, for example, and the complications of a trans-boundary economy.

So this is part of our first research project to try to uncover what is really going on with purchasing power and financial flows here.

Q: Proving the purchasing power of the region has been a longstanding problem for developers trying to recruit certain retailers to the city. The difficulty of tracking the impact of the shoppers from Juárez in El Paso and, like you said, following the cash transactions has made it a seemingly intractable problem. How do you answer that question?

You have to do survey work. You have to get out there and talk to retailers and talk to banks and talk to people in the community. That’s where the Hunt Institute can use its resources to really help to improve job creation in the trans-boundary region.

Q: Does the region really need to work together any better than it does now? Some economic development organizations, for example, might say, ‘We’re doing very well, thank you.’

The multitude of jurisdictions here is the exception to the unity of our river valley. We have thousands of years of history of being one river valley and a shared future.

However, we need to work together because we are a region of very scarce resources, and we are a very delicate region as well. We need to work together to make sure costs are minimized and benefits maximized.

Different jurisdictions, for better or for worse, can cause an increase in costs – economic, environmental and social. The whole idea is to try to understand what the impact is of different regulatory schemes.

For example, what is the cost of having, in our little area, three different ways of managing and regulating water use? What is the economic cost in our region of having different ways of regulating energy generation and transmission?

It runs the gamut. The bridges in Texas have an impact on wait times to cross the border, which impacts everybody in the region. The new intermodal rail facility in Santa Teresa is going to have an economic impact on everybody.

Q: How many employees does the institute have right now?

We have one other employee, Ana Rodriguez, who is a program and research assistant. She is also a specialist in international relations and political science.

We are planning on hiring a full-time researcher in the coming months who can provide a sort of peer review quality control to our work.

Q: What is the ultimate vision for the institute?

The vision for it is to generate a robust agenda in the five focus areas, collecting data and publishing research in those areas, so that people have a much better understanding of what is really going on here and, hopefully, can make decisions that will benefit our businesses, our communities and our families.

We are trying to create a very detailed understanding of all of us in the region, and are trying to create the conditions for economic growth in the region through research and analysis.

Q: What you are describing sounds like a think tank.

Yeah. We are a think tank. Exactly.

Q: Speaking of tough questions, Woody Hunt often cites a statistic that, in the 1950s, El Paso had a median family income that was above the state of Texas and on par with the nation. Now it is something like 30-percent lower and too often local college graduates leave the region to find jobs.

Mr. Hunt’s concerns are really at the heart of this institute. With respect to per capita income in the El Paso region, one of the things it obviously most depends on is attracting companies with high-paying jobs. Well, one way high-paying jobs might come to a region is because it has a very skilled workforce.

I have just finished teaching a NAFTA course here at UTEP and just finished another international commercial law course in Juárez. I know firsthand that we have extremely bright students and graduates in our region.

But you get into this whole trans-boundary issue again. We have flagship universities in Juárez and a medical school; the same is true in New Mexico and in Texas. The issue becomes coordinating among these educational institutions and among employers across all these boundaries.

If we can work together to make sure that companies know about the wealth of talent here, it will then create a sort of virtuous cycle where more companies come, educational institutions do even better and, as a result, families do better as incomes rise.

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Email El Paso Inc. reporter Robert Gray at rsgray@elpasoinc.com or call (915) 534-4422 ext. 105.

Published 5/18/14 at http://www.elpasoinc.com/news/q_and_a/article_15de6ae2-deaf-11e3-b493-001a4bcf6878.html