Remittances and Latin America
Latin American and Caribbean countries get more money in remittances than any other region in the world. And this vast sum of money dwarfs other cash inflows.
“This amount exceeded, for the third consecutive year, the combined flows of all net Foreign Direct Investment (FDI) and Official Development Assistance (ODA) to the Region,” according to the survey.
Roughly a third of the money went to Mexico. The second biggest country share was Brazil’s–slightly more than 10 percent.
Andean countries (Colombia, Ecuador, Peru and Bolivia) got more than $9 billion, about 15 percent of the total, the same as Central America.
As the U.S. Congress deals with immigration, any decision is bound to affect not only people in the States, but across the Americas as well. Money from migrants is a substantial part of many economies.
For six countries–El Salvador, Guyana, Haiti, Honduras, Jamaica and Nicaragua–remittances represent more than ten percent of GDP. Another six–Belize, Bolivia, Dominican Republic, Ecuador, Guatemala and Paraguay–get remittances that account for between five and ten percent of GDP.
Fifteen countries get more money from remittances than from tourism. The list includes the two biggest economies in the region, Mexico and Brazil.
For El Salvador, Guatemala, Honduras and Nicaragua, money from workers abroad is more than 50 percent of exports. In Haiti and Jamaica the value of remittances exceeds that of all exports.
Remittances to Argentina rose almost eightfold, from $100 billion in 2001 to $780 billion last year. “It is estimated that more than 250,000 people have left Argentina since the economic crisis of 2001. Migrants’ main destinations of choice have been Spain, Italy, the United States, and Israel. Except for the U.S., those countries were preferred due to ancestral ties,” according to the survey. And last year for the first time more money came in from Argentinians abroad than flowed out from foreigners working in Argentina.
Likewise, many left after Ecuador’s banks collapsed in 1999. “In the last four years, an estimated million Ecuadorians left their country for Spain, the United States, and countries in Central America,” the survey reads. “Remittances are the second largest financial source from abroad, after oil exports, and equaled to 170% of banana exports in 2005.”
In Mexico, despite the U.S. border crackdown, money from workers abroad increased 50 percent since 2003 and more than doubled since 2001. Even with high oil prices, in 2004 remittances reached 70 percent of oil exports.
Overall, remittances to the region grew roughly 130 percent in four years, from $23 billion in 2001.
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Amazing. Toward a People's Wire Transfer Network?
Submitted on April 5th, 2006 by Benjamin MelançonThe line about Argentinians leaving for Spain, Italy, and Israel as countries of origin suggests that a significant part of the $53 billion in transfers may be between relatively more wealthy workers in the U.S. etc. sending money to families that might be relatively well off themselves in the home country. I wonder if anyone has done research on that.
In any case, I'm betting most of the $40 billion sent from the United States to Latin America and the Caribbean is poor-to-poor.
Which is why I'm very, very angry that Western Union taking 10 to 20 percent or more and we, civil society et. al., haven't come up with a better way of moving this life support around.
It could never be costless as you need a huge number of places for people to send and receive payments, but these could be maintained with far smaller fees and, more important, that infrastructure could also used for international grassroots activism and communication.
I've got my re-growing savings to put up for making this big idea happen, and our immigrant brethren have $40 billion. Just a matter of getting enough people together. Drop me a line.
Here's some background on how wire transfers are done today, from a 2003 December 22 Business Week article by David Fairlamb in Frankfurt, with Geri Smith in Mexico City and Frederik Balfour in Hong Kong, told from Western Union's perspective rather than that of the people involved:
How much in startup costs would it take to reach a critical mass of people in, say, a particular immigrant community and the people in their country of origin? Think big.
Avoiding American Wire Services
Submitted on April 15th, 2006 by Benjamin MelançonMy first thought: I wonder if I can use one of these inexpensive companies to bail out my brother yet again in West Virginia. Probably not.
My second thought is that I'm very surprised that transfer fees would be low as 1%. Maybe they're gaming the exchange rate (Western Union did and lost a lawsuit). I also know that a number of Brazilians, anyhow, do use Western Union and I'm still interested in an organization taking only the minimum cost of transfer, as a moral issue, and because such an organization could serve as the infrastructure for a radical communications network as well (not to mention a network of community banks to replace payday loan places).
Mostly, though, there is no question I was speaking rather stupidly. People who generally have a better sense of community than the average person in the U.S., and who have sent $53 billion dollars a year to their home communities, have figured out far better ways to do it than I have figured out to bail out my brother in miscellaneous U.S. states. I'd love more detail.
One would expect remittances
Submitted on August 17th, 2009 by Jim Tressor (not verified)One would expect remittances to remain relatively stable because the money isn't usually used for investments, but I guess unemployment is going to hurt just about everyone! Here is an interesting article on why remittances might fall in the next couple of years: https://www.mindreign.com/en/mindshare/Global-Economics/Remittances/sl35291137bp484cpp10pn1.html