Reverse Remittances: More Mexicans Sending Money to U.S.
Frontera NorteSur, News Report, Staff, Posted: Jul 17, 2009
For decades, money sent home by Mexicans working in the United States has been a key pillar of the Mexican economy. Now, scattered reports are surfacing of Mexicans sending money to support relatives in the United States hard hit by the economic crisis north of the border. Latinos, especially immigrants, are suffering a disproportionate share of the joblessness that is officially rising to engulf close to 10 percent of the overall U.S. population.
According to Chihuahua state tourism department official Demetrio Sotomayor Cuellar, a 21 percent decrease over last year in the number of “paisanos” (Mexican immigrants traveling home for visits) crossing the Chihuahua border from June 26 to July 14 led officials to investigate the visitor drop. In the course of the probe, Sotomayor said, officials ran across unusual reports in the hands of Mexico’s Interior Ministry.
Much to their surprise, officials learned that some Mexicans were financially sustaining their migrant relatives in the United States. “This was something that was never seen before and now it is,” Sotomayor said. “Family members who are employed in Mexico are sending money to those relatives who are unemployed in the United States.”
Nonetheless, it is difficult to know whether money flowing northward to unemployed Mexican immigrants constitutes a significant stream of revenue not only for migrant households but also for U.S. tax revenues that finance services used by native-born U.S. citizens. The federal Interior Minister has not made public the reports cited by Sotomayor, and Mexico’s National Institute of Statistics, Geography and Informatics has not started systematically compiling data on transfers on money to migrants in the U.S.
Confronted with a growing unemployment problem at home, most Mexicans would seem hard-pressed to send large amounts of money to El Norte. However, alternative sources of cash are still readily available in Mexico. Pawn shops, payday-type lenders and loan sharks of all shapes and sizes are popping up everywhere; in Guadalajara, a 24-hour pawn shop is even open for business.
One thing is certain: the sharp decrease in remittances sent from the United States is hitting many Mexican households. The reduced remittance flow implies serious implications for the ability of Mexico's federal government, which is heavily dependent on a 15 percent sales tax, to support social
programs.
The central Bank of Mexico recently reported a record drop of 19.9 percent in remittances received in Mexico during the month of May. From January to May, remittances slid 11.2 percent in comparison with the same period last year, according to the International Monetary Fund.
An analysis by the Spanish-owned bank BBVA Bancomer estimated that migrant dollars arriving to Mexico could go down by as much as $4 billion this year, reducing the country’s annual remittance income from about $25.1 billion in 2008 to slightly more than $21 billion in 2009.
Other estimates put the expected remittance total in the $22-23 billion range for 2009.
Reduced remittance revenues impact some areas of Mexico more than others.
In the first three months of 2009, 26 of Mexico’s 32 states captured fewer remittances. The states of Chiapas, Veracruz, Guanajuato and Mexico experienced the greatest plunge in migrant dollars. On the other hand, a handful of states actually saw increases in remittances. Entities experiencing a positive upturn included Aguascalientes, Baja California Sur, Coahuila, Colima, Jalisco, and Nayarit.
The third largest receptor of remittances after India and China, Mexico is far from alone in groping with the remittance crisis. The World Bank estimated this month that global migrant remittances, which totaled $328 billion in 2008, could fall to $304 billion in 2009. Certain nations are even more dependent than Mexico on money earned by nationals working abroad. Tajikistan, Lesotho, Guyana, Moldova, and Honduras are among countries where migrant remittances represent one-quarter or more of the Gross Domestic Product.
Not all the news from the remittance front is negative. South Asia is expected to receive more income this year than last from migrants working in the Persian Gulf region.
Additional sources: El Universal, July 15, 2009. Article by Jose Manuel Arteaga. El Diario de Juarez, July 14, 2009. Article by Horacio Carrasco. La Jornada, July 4 and 14, 2009. Articles by Roberto Gonzalez Amador, the Economist Intelligence Unit, and the Notimex, DPA and Reuters news agencies. La Tribuna de la Bahia/Agencia Reforma, July 2, 2009. Article by Ernesto Sarabia.
Frontera NorteSur (FNS): on-line, U.S.-Mexico border news Center for Latin American and Border Studies New Mexico State University Las Cruces, New Mexico
For a free electronic subscription email fnsnews@nmsu.edu
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User Comments
Chuckie on Jul 19, 2009 at 10:56:38 said:
El Pussee - actually remittances are done by people who have done work in this country and sent them, in business, it means that they produced $2 for every $1 they earned. So it is their money, you have no right to it.
Nativist - What are you? A welfare grubbing idiot trying to make sure others don't steal your welfare? Get a job!
Brittanicus - We know where you stand, you should have called yourself Nazissist. I guess you can try to stop welfare, do it. I think all the recipients are US Citizens. You don't just hate immigrants, you also hate US citizens. Brittanicus..hmm...European White Guy, right?
El gato on Jul 18, 2009 at 12:58:18 said:
Well its about time that we start to get our money back! Hey, a peso here and a dollar there adds up. Sadly, if this trend continues, it'll probably take about ten generations just to break even.
nativessayno on Jul 17, 2009 at 22:50:12 said:
So many billion...these represent lost tax dollars during a major recession...Oh well. Looks like that gambit to take us over; reconquer us might be beginning to fail.
Return with some legal documents and you will be legally qualified to siphon off, I mean, send your salary anywhere you like! Otherwise you are not a "migrant"...that is a designation that MSM pretends are not illegal foreign national workers using fraudulent doc to obtain work....we already know all this.
""are suffering a disproportionate share of the joblessness"" Jobs they can't actually work in since they are not granted permission to do so by our government....
Those jobs you refer to? They belong to citizens and legal immigrants...$23B oh, only $3B shy of what my state of California is in debt for.....So sad...several BILLION short in remittance so far....a crying shame!
Brittanicus on Jul 17, 2009 at 17:11:21 said:
Such issues as immigration reform and health care should not be left to a thrall of politicians, who many do not have the public interest at the heart in these matters? Already we have seen this materialize with the original under-funding of our main enforcement–THE BORDER FENCE CONSTRUCTION and the weakening of the illegal worker identifier–E-VERIFY? As it always happens the status-quo have always have the monetary inroads in influencing our legislators, leaving the general population to be startled by a new law enacted, before they have a chance to respond. It really doesn’t matter who is the majority party, the American people remain alienated from secret wheeling and dealing. H.R. bills and amendments are passed in Washington chambers, but the real payout takes place behind closed doors.
-->This happened when Sen. Harry Reid, Speaker Pelosi used their power to under-fund E-Verify or even kill it? Then in California right now–the SANCTUARY STATE–E-Verify is under a great deal of pressure, not to implement it. Assembly member Paul Fong (Cupertino) would prohibit the state, local governments, and special districts in California from requiring an employer to use the federal “E-Verify” system, even when that employer is a contractor to the government. This is typical at state or federal level, no matter the monetary consequences to the US worker. California residents should immobilize this idiot, and threaten him losing when it’s time for re-election. SAY NO to AB 1288
Right now as I comment Homeland Security Janet Napolitano is looking for ways, to undermine the ICE raids and 287(g) the local police enforcement law as seen with Sheriff Joe Ariapo in Maricopa County, Arizona and in other states I thought the whole idea of Homeland Security, along with our politicians when they took the oath of allegiance, was to protect us all. It’s more like they are out to protect the interests of the US Chamber of Commerce, Council of Foreign Relations, ACLU and all the open border, special interest groups, including millions of jobs for illegal immigrants into our country. GOOGLE—about their—REAL—INTENTIONS?
They are already showing their true unpatriotic colors, by trying to force through another disastrous immigration reform law. They keep telling us that the 1986 Simpson/mazzoli bill is broken, yet it was never enforced by any president after Ronald Reagan signed it into law. Nor would good old Ted Kennedy sponsored it, if it didn’t ring true? It’s just another trick; to legalize “God Knows” how many illegal aliens will swarm the immigration agencies. How many their really are? Which is anybodies guess, will costs trillions of dollars to support these illiterate people in the majority of cases.
Not the pariah farmers or the businesses that do the hiring, but the taxpayer will have to foot the bill and the millions more who the lay siege to the border–once the word AMNESTY is heard. Now it’s up to the American people to demand–NO MORE AMNESTIES! GOOGLE–illegal immigration and financial costs, because the public is constantly fed propaganda from the Liberals. Call your state or federal representative today! 202-224-3121 in addition to sign the petition for California, to stop billions of welfare benefits, to the overrun State at TAXPAYER REVOLUTION. See the truth at NUMBERSUSA