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By Jorge Camil

June 5, 2005

Original Artical (Spanish)

The ever-increasing "export" of manual laborers is recorded by the [Fox] government as "change" and as though it were a "success" of its social and labor policies. But the reality is diametrically different, no matter how substantial the fruit of this "business": in the past four years and a half years, Mexico has received remittances of around $52 billion, and the most conservative estimates indicate that by the end of 2006, that amount will rise to at least $80 billion, almost the cost of FOBAPROA [Spanish acronym for Bank Fund to Protect Savings] and its "banking rescue."

[Editor’s Note: the “FOBAPROA scandal” struck Mexico in 1998 and was either connected to the liberalization of the Mexican economy, or to massive corruption, depending upon where on the political spectrum one sits.]

Year after year, the volume of remittances grows, along with the number of Mexicans emigrating to the United States. Since the Fox government entered office, the amount has increased by 165%. Meanwhile, while the first category i.e. remittances, have increased so dramatically [165%], the second category ie. asylum seekers, have averaged 1100 for every day since the "change" [the Fox government was elected] first arrived at "Los Pinos" [the Presidential retreat].

With much fanfare, the soon-to-be ex-president of the Inter-American Development Bank (IADB), Enrique Iglesias, sent word from Washington that Mexico now receives 14% of the worldwide flow of remittances, while in the same roundtable discussion, the Minister of Social Development, Josefina Vázquez Mota, emphasized the virtues of the “3x1 program,” which says that for every dollar contributed by emigrants to finance a project in their communities in Mexico, the federal, state and local governments would inject three additional dollars.

If in fact the three levels of government have the capacity to finance 3x1, then why wait for people to emigrate (leave their families, leave their communities, risk their lives, put up with precarious labor conditions, have their human rights violated, face rubber or plastic bullets, et cetera, et cetera) and send dollars, if there is sufficient money here to promote community development and generate jobs?

One thing is certain: compared with oil exports or direct foreign investment, migrant remittances comprise the largest net injection of resources into the national economy. In real terms, most of currency derived from oil exports remains in the Treasury and is recycled into foreign debt payments; if there is anything left over, it is used to pay for the bureaucracy. And in fact, the largest percentage of foreign capital is destined for the purchase of companies that are already operating; that is to say, it does not generate new wealth, but further enriches the old. In addition, 70 percent of the final profits end up in the countries of origin, as U.N. statistics indicate.

In the meanwhile, the Inter-American Development Bank itself indicates that the international migration of workers has increased from 75 million people in 1965 to a little more than 120 million in 2000, an increase of 60 percent during the period, and the flow has grown even more sharply since 2000.

One of the largest receivers of foreign immigrants, mainly from Mexican, has been the United States. Census data from that country reveal that the annual number of Mexican immigrants now approaches 400,000, a volume 13 times greater than the reported annual average during the 1960s. The contingent of Mexican immigrants within the U.S. labor force practically doubled between 1990 and 2000, from 2.6 million to 4.9 million.

These immigrants represent almost 3.5 percent of all manual labor in the United States and 25 percent of all workers born outside the borders of the U.S. In certain sectors of the economy, like agriculture, the proportion of Mexican workers approaches 25 percent of the labor force. Also Canada, another member of the North American Free Trade Pact, registers an increasing proportion of workers of Mexican origin.

An important characteristic of the increase of international migration and the foreign participation in the labor force is the consequent increase in remittances from workers. On a worldwide scale, the flow of remittances surpassed $180 billion in 2004, although, according to recent studies, we should note that official statistics of the balance of payments exceeds $200 billion.

In 2004, Latin America and the Caribbean received the largest volume of remittances: more than $40 billion. That same year, the official flow of remittances to the region exceeded the combined amount of direct foreign investment and the official development assistance received by the region, marking a major change in the evolution of the external financing of their economies.

Also in 2004, Mexican immigrants contributed the largest share of worldwide remittances (more than $16.6 billion), 41.5 percent of the combined Latin American and the Caribbean total. Bank of Mexico statistics indicate that since 1960, the flows to that country have grown by nearly 13 percent annually. In 2003 this amount surpassed 13.3 billion, an increase of 35 percent compared to 2002.

The IADB indicates that although some calculations differ, the number of Mexican homes receiving income from remittances in 2002 can be reasonably estimated at around 1.4 million, that is to say, 11 percent more than in 2000. To put it in other terms, one of every nine homes in rural areas, and one of every ten homes in medium and large urban areas received remittances. In agreement with official statistics, in 2004, 46.3 million remittance transactions of an average value of $358 were made. In municipalities of more than 2,500 inhabitants, average remittances to families receiving them averaged $2,800 in 2002, which represents almost 43 percent of present home rental costs.

In Mexico, the families that receive remittances vary widely as far as rent and structure. On average, the poorest homes receive smaller levels of remittances, but this represents a greater part of their total income.