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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 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.”

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 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