EOW May 2007

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EuroWire – May 2007 54
Transat lant ic Cable
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 13th 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 24th 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,” 25th 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.”
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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.
Fiscal Matters
China may sell its US Treasury bonds, auguring a rate rise for
Americans. The government of China said on 9th 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 10th 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
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