Monday, September 22, 2003

 

Migrant earnings sent home critical to Mexico

 

By Barnard R. Thompson

 

While much of the debate regarding undocumented migrants — referred to more often then not as illegal immigrants in the U.S.A. — rages redundantly on with arguments that have been heard for decades, there are a number of new factors that have been cast into the mix.  As well, parts of the debate have now taken on harsher tones, with one side or the other showing deep concerns (and frequently anger) over border security, just who or what may be coming and going across the border, vigilante activities versus human and immigrant rights, etc.

 

There are also questions over acceptance of Mexican government identification cards that are issued to U.S.A. residents who might not qualify for services or needs in this country without the “matrícula consular.”  More recently, and particularly in California, an outcry has been growing with respect to non-citizens, who also lack legal residency status, qualifying for driver's licenses without valid background checks.

 

On the Mexican side, the government is actively collaborating in all of this with motives that seem over and above simple altruistic concerns for nationals who live and work in the U.S.A.  Today there are domestic demands that go beyond the historic (and continuing) exigency for an escape valve across the northern border due to a frequent stuttering economy, high birth rates and an inability to create enough jobs to meet the annual needs of those coming of work force age.  It should also be noted that these issues and other national needs, in part at least, are behind the government’s call for a new immigration accord with the U.S.A.

 

But all of this is just as much about money.  And what Mexico needs — for a myriad of past, present and certainly future socioeconomic, political and stability reasons, is the money sent home to family members by expatriates living and working abroad, especially from those who reside in the U.S.A.

 

According to figures released in mid-September by the Banco de México (BM), the nation’s central bank, remittances sent home by workers totaled US$6.135 billion for the first six months of 2003, an increase of 29.1 percent over the same period of 2002.  Last year the remittances, that include funds sent by wire or bank transfers, checks, money orders and cash, reached an all-time high of US$9.81 billion.  (Some analysts estimate that returning or visiting Mexicans carried an additional US$3 to US$4 billion home.)

 

At the bank-recorded levels, “family member remittances” are now greater than Mexico’s receipts from direct foreign investments and tourism.  In other words, according to the central bank the only foreign income source greater than the expatriate remittances is revenue from crude oil exports.

 

The Mexican financial group and brokerage firm Ixe Casa de Bolsa released a special report on September 12, 2003, titled “Family Member Remittances to Mexico.”  The eight-page analysis (that includes 15 charts and graphs) contains certain interesting facts and it comes to some rather shocking conclusions.

 

The report notes strong growth in family member remittance income in recent years, with the US$6.134 (sic) billion received during the first six months of this year surpassing receipts of the same during the second half of 2002 by 21 percent.  The basic reasons given for said growth were an increased number of money transfer firms, making it cheaper and safer to transmit money electronically to Mexico; a “constant increase” in the number of Mexicans working abroad; and the replacement of high salary workers with others who earn less in some activities in the U.S.A.

 

Information accompanying one Ixe chart notes that the remittances are having two especially significant impacts at home.  First, the funds serve to reduce the negative balance of Mexico’s balance of payments current account; and second, they directly strengthen families and family member consumers who need the money to supplement their incomes.

 

The report also states: “The recent evolution of family member remittances to Mexico forecasts that they will continue to grow in the midterm at an average annual rate of 9.8 percent between 2004 and 2010….”  Ixe also anticipates a continuing demand for Mexican workers in the U.S.A.  “As such, it does not appear that the number of Mexican migrants going to the U.S.A. will decrease significantly in the coming years, so the flow of dollars into Mexico by way of family member remittances will be more and more important.”

 

To further demonstrate just how important the remittances are, the analysts conclude: "Thus, by the end of 2010 family member remittances could equal receipts from crude oil exports."