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  1. #1
    Senior Member Dixie's Avatar
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    Mexican village depends on its migrants in California

    Business English
    Mexican village depends on its migrants in California
    von Richard Lapper

    In Mexico, the impact on investment has been magnified by the money that migrant clubs send back collectively.

    At times Jomulquillo, a tidy village in the semi-arid countryside that surrounds the city of Zacatecas, feels like a ghost town. Money sent back by a club formed by migrants from the village has helped pave the roads, instal running water and bridge a stream that once divided the village.

    But most residents have long since decamped to the United States, two-thirds of the houses are empty and those people who still remain at home are largely dependent for their survival on the monthly sum they receive at the branch of Western Union in the neighbouring town of Jérez.

    "We basically depend on people in California," says Marcelino López Pérez, a 65-year-old who was a construction worker for 14 years in the San Fernando Valley and now looks after houses owned by migrant relatives in the village.

    The picture is repeated over and over again in states like Zacatecas, Michoacán and Jalisco - which have lost up to half their population to migration - and it is increasingly a feature of southern states like Oaxaca and Chiapas, where migration is a more recent phenomenon.

    Migration has begun to decline, partly because of tighter policing of the border by the US authorities, but an estimated 400,000 Mexicans still enter the US each year. And more and more of them it appears are sending money back home. What is more, with commissions charged by Western Union and other money transfer agents falling as a result of competition and official pressure, more of the money that is sent is reaching family members.

    As a result, the amount of remittances flowing into Mexico through formal channels is mushrooming. According to the Multilateral Investment Fund (MIF), an agency at the Inter-American Development Bank that tracks remittances, Mexico received $23bn in remittance income last year, up from only about $4bn in 1995.

    That makes Mexico the third biggest remittance market in the world after China - much of whose remittance business is a product of internal migration - and India. In recent years remittances have even exceeded income from oil, being second only as an earner to manufacturing, and have helped reinforce the economy's growing independence.

    There is strong evidence that the flows help alleviate poverty. Studies by the MIF suggest that between 80 and 90 per cent of remittances are spent subsidising consumption, allowing poorer Mexicans such as Mr López to buy meat and medicines and pay utility bills. But at least 10 per cent of remittance receipts are being channelled into capital investment, mainly into housing.

    In Mexico, the impact on investment has been magnified by the money that migrant clubs send back collectively. For example, under a scheme begun by the federal government of Mexico and the state government of Zacatecas in 1993, Zacatecan migrants clubs in the US have collected money to support local improvements.

    That scheme - known as two-for-one - was expanded in 1999, when municipal government added an extra dollar of matched funding, making it three-for-one.

    Three years later, the federal government of former President Vicente Fox extended the scheme across Mexico. By the end of 2005, migrants' groups, federal, state and municipal governments had invested $230m in a total of more than 5,000 small-scale projects with migrants' clubs in the US involved in the scheme rising from just 20 in 2002 to 815.

    The schemes have brought a number of benefits, with the involvement of migrants helping to ensure that public works are carried out efficiently and without the corruption that has plagued them in the past.

    However, there is now a general recognition both in government and among the migrants' clubs that much more needs to be done to promote productive activity. As Efrain Jiménez, vice-president of the Zacatecas Clubs of Southern California says: "Our communities are well organised but people keep coming to the border. There is no entrepreneurial culture The government needs a policy to encourage entrepreneurship.''

    The result has been the first organised effort to promote business development. Earlier this year a pilot project, also involving a donation by Western Union in eight small enterprises, was launched in Zacatecas. The plan, known as four-plus-one, entails a total investment of $1.25m, with the money transfer organisation, migrants' clubs and the three levels of government each contributing $250,000.

    Projects include a distillery to produce mezcal, a plan to grow and sell nopales (an edible cactus leaf), a workshop to assemble computer parts and an ecological park designed to attract tourism. It is also envisaged that the plan will be extended to three other states, Michoacán, Jalisco and Guanajuato.

    Some critics, however, remain sceptical. First, the scale of investment is relatively small. Similar efforts - carried out under the two-for-one schemes or less formal arrangements - have not been very successful.

    In Jomulquillo, Mr López, for example, runs a small textile workshop in a building donated by migrants. Six women work part-time on sewing machines that have been given to them by the state governor to produce bedspreads and pillow cases for the local market. In the face of cheap Chinese imports the products have been difficult to sell and the project has offered work only intermittently.

    Rafael Fernández de Castro, who teaches at the Instituto Tecnológico de Mexico and recently compiled a book on the three-for-one schemes, says it typically takes a long time simply to identify projects. "It is practically impossible," he concludes.


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    FTD.de, 16.08.2007
    © 2007 Financial Times Deutschland
    http://www.ftd.de/karriere_management/b ... 39720.html
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  2. #2
    Senior Member crazybird's Avatar
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    There's lots of towns dependant on the migrants here. Read an article recently where I think Waukegan had a chapter that sends food and school supplies and all to people from the town most of them came from. That is of course after they fill up on the free school supplies and food they take from our tax paying citizens here.
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  3. #3
    Senior Member Dixie's Avatar
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    The remittnace info is a little off.

    ...migrant remittances are down. Mexico's central bank reported incoming remittances rose only 0.6% in the first half of 2007, compared with a 23% rise in the first half of last year.
    Today's Invesetor.

    http://www.investors.com/editorial/edit ... 7321820868
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    Empty houses in Mexico with a caretaker and illegal Mexicans here building and buying houses while our economy goes belly up as they default on their home loans here while sending $$$ home and building an infrastucture but they don't pay taxes here and abuse our infrastucture. So, in a nutshell, we support them here and there.

  5. #5
    Senior Member CCUSA's Avatar
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    No sympathy! Go home and fight for change in your own countries!
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  6. #6
    Senior Member crazybird's Avatar
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    Empty houses in Mexico with a caretaker and illegal Mexicans here building and buying houses while our economy goes belly up as they default on their home loans here while sending $$$ home and building an infrastucture but they don't pay taxes here and abuse our infrastucture. So, in a nutshell, we support them here and there.
    Somehow I don't think that's how things were intended to work.
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