Remittances From Latin Americans To Hit $100 Billion By 2010
Sunday, March 18th 2007, 10:26 pm
News On 6
GUATEMALA CITY (AP) _ Latin Americans working outside their countries are expected to send home more than $100 billion annually by 2010, despite efforts by the U.S. to slow illegal immigration, an Inter-American Development Bank official said Sunday.
Donald F. Terry, general manager of the bank's Multilateral Investment Fund, said remittances will increase by about 15 percent a year over the next four years.
``There's very little doubt about that,'' Terry said at a conference on the sidelines of the Inter-American Development Bank's annual meeting, which ends Tuesday.
In 2006, Latin American migrants sent home $62 billion, with Mexicans sending the largest share _ $23 billion.
Latin America leads the world in remittances, something Terry said was worrisome.
``If you're No. 1 in remittances that means your economy is not generating enough jobs. ... What that really means is we have too much unemployment and underemployment,'' he said.
Still, Terry called remittances a ``very effective poverty reduction program'' that keeps 8 to 10 million Latin American families above the poverty line.
The region, however, has not tapped into the potential of remittances, which total more than all the foreign aid and investment combined in Latin America, Terry said.
Much of the money remains outside the formal financial channels, making it difficult for families to capitalize on the earnings, he said.
The recent U.S. crackdown on illegal immigration is further hindering efforts to get migrants to use banks to send their earnings back to their homelands, Terry said. Using the banking system would allow migrants to open savings accounts, qualify for small business loans, mortgages and other services that could help lift their families out of poverty.
``The raids have made people so fearful they not only are not going to banks, they are not going to money transfer companies,'' said Terry, adding that officials fear migrants may return to the days of sending money back through friends and family members and drop out completely from the system.
U.S. immigration officials have recently been raiding workplaces across the country. An immigration raid two weeks ago in Massachusetts netted several Guatemalan immigrants and left dozens of their children stranded at schools.
A litany of rules and restrictions regarding financial transactions since the Sept. 11, 2001 terror attacks in the U.S. have also made it difficult to bring illegal immigrants into the formal banking sector, Terry said.
Most migrants send home monthly between $100 to $150 a month.
Terry said if governments could tap into as little as 1% of the money and funnel it toward development, it could make more of a difference.