Blogging mostly about mundane stuff like, immigration, Workers' Compensation and other immigrant related activities.

Sunday, February 19, 2006

Mexican Immigrant Remittances Reach $20 Billion in 2005

Migrant workers in the United States sent over $20 Billion Dollars to Mexico in 2005. The amount is second to oil exports ($28B) and double the $10B Mexico brings in from foreign tourism.

Mexico City has now climbed to second place nationwide in the amount of remittances it receives from the United States. The Mexican capital received US$479 million in wire transfers from migrants living in the U.S. The figure placed them behind Michoacán with 12.5 percent of the overall figure of $20B, while Zacatecas, Guanajuato and Jalisco also registered high rates of remittance money. The fact that Mexico City increased its ranking to second place highlights a growing shift in Mexico's emigration patterns which generally revealed heavy migrantion from rural areas. The shift demonstates that more Mexicans are leaving major cities and seeking better living and wage standards accross the northern border.

"CONAPO, which also used data provided by the International Monetary Fund (IMF) and the World Bank, said Mexico now ranks second in the world among the countries that received remittances from abroad, surpassed only by India." (SourceMex).

CONAPO estimates that remittances over the past five years exceed US$74B.

2000-$6B, 2001-$8B, 2002-$10B, 2003-$13B, 2004-$17B, 2005-$20B

The steady increase in remittances has drawn the attention of many on both sides of the border. Mexican President Fox has publicly encouraged migrant workers to continue sending remittances to their families in Mexico. He cites the increased level of remittances as a source of national pride. President Fox has even gone as far as referring to Mexican migrants as "Mexico's angels in the exterior".

In the U.S. the increase in remittances have attracted both favorable and negative attention. The favorable attention comes from businesses and financial institutions that are eager to cash in on the money transfer fees remittances generate. The negative attention has come from prominent members of U.S latino organizations such as Hilda Marella Delgado, Communications Director for the Los Angeles County Federation of Labor. Ms. Delgado wrote a commentary to the Los Angeles Times newspaper and essentially called for Mexican migrant workers to spend their money in the towns they currently live and work. The argument made by Ms. Delgado is that the migrants could better use such funds in the communites the have lived in for the past 10, 15 or 20+ years. The fact is that over 2 million Mexican families now rely on these funds as a primary source of income and the number will likely continue to increase.

Critics also point out that remittances should be spent within our borders and to grow our economy. These critics have probably not seen the recent studies conducted by UC Davis and the UC San Diego which have released data that shows a large portion of these funds being spent on American made goods which further contributes to our economy.

While Mexican families increasingly rely on these remittance funds as an important source of income, because these dollars allow them to purchase basic goods such as food and clothing, whether Mexican or U.S. made, Mexico's government has quietly begun to use remittances to build its infrastructure. In a pilot program, the Mexican government has offered to match funds migrants send to their communites for community based projects, such as the building of schools, roads, plazas and medical clinics, with a 3 for 1. The program has relied on the participation of "Clubes de Oriundes" or Home Town Associations (HTA's). A description of some of the HTA goals are provided here:

  • HTA projects in communities of origin are intended to alleviate poverty and decades of neglect by local governments. HTAs depend entirely on voluntary contributions and efforts by members who support social development projects. This work has been characterized by efficacy, honesty, and transparency.

  • HTAs, along with other immigrant self-help groups, function as social networks and transmitters of culture and values to the American-born generation. One of their most important challenges is the incorporation of the second generation into HTA activities.
The immigration numbers clearly reveal that despite the stepped up efforts of the Immigration and Naturalizaion Service, now Department of Homeland Security, the enforcement, use of surveillance and night-vision cameras, an increased presesence of Border Patrol agents have failed to stem the flow of illegal immigration. (Source Mex, Latin America Data Base, Lat. Am. Institute, Vol. 11, No. 14, Ap. 12).

The remittances and their mounting contribution to the Mexican economy have caused all the leading presidential candidates in Mexico to schedule visits in heavily populated Mexican U.S. cities and communities. These candicates clearly understand the value in courting the vote of these immigrants who have recently begun to wield political influence over Mexico's politics from accross the border. The visits are also a result of the Mexican Congress consideration to allow Mexican immigrants living in the U.S. to cast absentee ballots in the upcoming presidential elections.

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