Thread: Migrants still sending vast sums back to Latin America

Migrants still sending vast sums back to Latin America
McClatchy Newspapers
Mar. 11, 2008 02:08 PM

WASHINGTON - Latin American and Caribbean migrants sent relatives back home a record $66 billion last year, but the remittances grew by the lowest rate ever, with Mexico and Brazil showing significant slowdowns, a study released Tuesday shows.

Remittances, which now are considered a crucial part of many Latin American and Caribbean economies, rose 7 percent in 2007, the first year that the growth rate has been in single digits.

The region's top recipients, Mexico and Brazil, are weighing down the averages, said Don Terry, the president of the Multilateral Investment Fund, the unit of the Inter-American Development Bank that's been looking at remittance trends since 2001.

Terry said a combination of factors was behind the overall slowdown in growth, from a weak U.S. economy and dollar to a stronger euro and healthy growth rates among many Latin American nations.

"Those remittances that they send back home don't go as far as they used to," he said.

Brazil is the only country that saw its remittances decline, receiving $7.1 billion last year, down from $7.4 billion in 2006. Terry said this occurred because of Brazil's robust economy and the strengthening of its currency from 3.7 reals per dollar six years ago to just 1.4 reals today.

Once the engine of remittance growth, Mexico got $24 billion last year compared with $23 billion in 2006, a modest 4 percent increase.

These numbers contrast with double-digit gains by many countries, Terry said.

"Is this a bend in the road or a new direction?" he asked. Some of the new trends will come into sharper focus this year.

Terry projects that remittance growth from the United States will be flat in 2008. In contrast, there will be strong growth from Spain, which has received a large number of Bolivian and Ecuadorean migrants and, increasingly, Central Americans.

Terry estimates that Spain will send around $8 billion in remittances to Latin America and the Caribbean this year, compared with $6.5 billion last year. This means that on a per capita basis, Spain will surpass the United States, which is expected to send $48 billion this year, about the same as last year.

Recent numbers already show that Mexican migrants in the United States are sending less money back home than they were before. They sent $1.6 billion home in January, compared with $1.8 billion for the same month last year, a 6 percent drop.

This is only partly because of the U.S. economic slowdown, Terry said, since remittance growth from Central American migrants is still rising briskly.

Mexicans and Central Americans work for similar industries, such as construction and food service, though often in different U.S. regions. In the past, analysts have suggested that Mexicans are more exposed to the U.S. immigration backlash because they've moved into areas where there's historically been little Hispanic presence.

Another possible explanation is that Central American migrants tend to come alone, while Mexicans bring more family members and therefore need to send less money back home.

The slowdown is of concern because remittances play a vital role for many of the region's economies, surpassing the combined amounts obtained from foreign direct investments and development assistance provided by countries and institutions such as the World Bank.

http://www.azcentral.com/news/articles/ ... 11-ON.html

What bothers me is not the remittancs it is that their beneficiaries are not using the money well. The majority 90% is used in direct consumption of staple food, housing upgrade, upkeep on upgraded housing and clothing.


Most of what they are buying could be produced within their household or village but instead it is spent at places like Wal-Mart or in Mexico Wal-Mex.


Once they start taking the same money and using it for farm improvement, warehousing for bulk buying or grain storage and factory shells things will change. Then it will start to make an impact resulting in better quality of life and less desire to break our law and come here illegally.

Valid points Richard.

We should also ponder how this $66 billion could solve many of the states' budget problems -- especially California ($16 billion in the hole and counting).

These remittances bother me very much. It is a direct transfer of a significant portion of our economy to foreign nations. It is money that will never be re-utilized within our own country. More than 50% of the remittances is money earned by illegal aliens through holding illegal jobs via unscruplous employers. If our "leaders" and government were to actually enforce immigration laws, the majority of this money would stay where it belongs, in our own country. Furthermore, American citizens and LEGAL residents would see essentially full employment.

Here's a question for all: Why the hell do we give foreign aid to Latin America on top of all the billions of collars going into their economy via remittances? Solution: STOP ANY FOREIGN AID until our immigration process is re-evaluated, laws enforced and remittances flowing from the U.S. via illegal employment is stopped.