by Rosalba Ruíz
WASHINGTON, D.C. — Latin American migrants sent 10 billion fewer dollars home last year than they did the year before, a drop-off felt greatest in Mexico, economic experts say.
Measuring how that hemisphere weathered the global economic downturn in 2009, they shared their findings and expertise here during an April 12 roundtable discussion at Inter-American Dialogue headquarters. Remittance flows to Latin American nations, which are mostly from the United States, dropped from $69 billion in 2008 to $58.8 billion in 2009, a 15 percent decline, they reported.
“As employment levels declined, so did the capacity to send money home,” said Natasha Bajuk, remittance specialist at the Inter-American Development Bank. Unemployment rates among foreign-born Latinos in the United States rose more sharply than among other foreign-born populations, from 6.9 percent in 2008 to 11.4 percent in 2009, according to the U.S. Bureau of Labor Statistics.
The crisis in the U.S. affected some countries more than others.
For example, 95 percent of Mexico’s $21 billion remittance inflow in 2009 came from the United States, explained Bajuk, while Ecuador and Bolivia received about 40 percent of their remittance income from Europe.
To adjust for the lack of income, migrants living in the United States made “tremendous sacrifices,” such as seeking extra work, tapping their savings or finding less costly housing, said Bajuk.
Those who lost their jobs weren’t the only ones affected, according to a study by Manuel Orozco, remittance specialist at Inter-American Dialogue’s research center.
The study said, “insecurity about unemployment has proven to be the greatest hardship for migrants in the current environment. Nearly a quarter stated that the fear of losing one’s job represented the worst part of the…crisis.”
Families and other recipients back home have constrained their spending as much as they could, Orozco said.
Although Latin America was severely hit by the global downturn, the region’s economic prospect for 2010 is positive, according to the Organisation (cq) for Economic Co-operation and Development (OECD), headquartered in Paris.
“There are some positive signs, but definitely 2010 is going to be a tough year. You’ll probably see no growth or very moderate growth, no more than two percent growth in remittances,” said Orozco.
Both Orozco’s study and studies from the OECD indicate that in order to boost the flow of remittances and development of the region, there are some basic actions policymakers in countries of origin and destination must take:
•Gain a better understanding of migration flows and the economic impact migrants have so programs can be initiated that will provide the right incentives and protections and take advantage of the economic contributions they make.
•Equip migrants and their families with the capacity to make informed financial decisions and manage their resources.
•Help boost competition between money transfer companies to lower remittance costs, which range up to eight percent on a remittance of $200. Hispanic Link
