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Mexico's Remittance Crisis

*This post has also been cross-posted in the FPA's Latin America Blog.

Behind oil export and above tourism, remittances from Mexicans abroad to their home country makes up a large part of the cash that builds homes and futures in many Mexican communities. With the recent economic crisis in the US, America's neighbours are starting to feel the fallout of the Mortgage Crisis that is slowly presenting problems in countries outside of the G8. With many Mexicans living in the US in hard hit areas, those funds that used to pay for medicine, food, homes and everything else for families of migrants from Mexico are now suddenly being cut off with great effect.

With a decline in remittances of 7% since last year, many in Mexico who were just keeping afloat may slip into poverty this year. Many small villages who sent their young men and women over the border and who often are mired in economic troubles are the hardest hit communities in Mexico when economic troubles loom. With remittances to Mexico increasing five and a half times since 1997 to $24 billion, these funds are not only a necessity, but is Mexico's second largest source of foreign revenue. What also seems to focus the tension on Mexico is that areas in the US where Mexicans have migrated to are also those worst hit by the crisis. While migrants from El Salvador and Guatemala are also affected, those communities often have settled in the Washington-Maryland areas which have been less affected by the crisis according to The Washington Post.

The likely effect of the crisis outside the US may result in more illegal migration across the border. Despite the troubles in the US, communities in Mexico near poverty will not weather the lack of funds as easily as much of the United States. Economies tied in with the US will slowly feel the effects of economic troubles in their largest export market. The lack of sympathy for future trade agreements and harder policies on immigration will also likely take hold with the poor economy and continued anti-NAFTA and FTA sentiments in the US Congress. The next American President will have a lot of repair work when beginning his or her job in 2009.

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Comments (4)

  1. jvilla Monday - 24 / 11 / 2008 Reply
    if the crisis outside the usa will cause more illegal immigration. when will the usa stop giving benefits to illegal aliens. if we do not stop automatic citizenship they will continue to come it is a lure and the food stamps and medicaid among other benefits will also lure them here, so why doesn't our government stop this? why are we educating millions of children without a social security they enter our schools with no questions asked.
  2. joaco Thursday - 07 / 05 / 2009 Reply
    Because education is a human right. Because if there were not for migrants, US economics would have hit ground long ago. Because Free Trade has something to do with the crisis we are all facing and if frontiers were open for goods, for money; why would not they open for people?
  3. dave Monday - 11 / 05 / 2009 Reply
    I think remittance money sent outside our country is something more people need to consider when you look at illegal immigration as a socio-economic issue. Who benefits from illegal immigration? Large agri-business, corporations. Where is the money going? Well, large sums are sent out of this country by wire transfer. Instead of contributing to the US economy, this money goes into the Mexican economy.


  1. […] in America has significantly reduced the average income levels of migrant workers in the U.S., which has impacted the remittance income tremendously. So the Mexican government is starting this pilot program even as immigration is making them less […]

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Richard Basas
Richard Basas

Richard Basas, a Canadian Masters Level Law student educated in Spain, England, and Canada (U of London MA 2003 LL.M., 2007), has worked researching for CSIS and as a Reporter for the Latin America Advisor. He went on to study his MA in Latin American Political Economy in London with the University of London and LSE. Subsequently, Rich followed his career into Law focusing mostly on International Commerce and EU-Americas issues. He has worked for many commercial and legal organisations as well as within the Refugee Protection Community in Toronto, Canada, representing detained non-status indivduals residing in Canada. Rich will go on to study his PhD in International Law.

Areas of Focus:
Law; Economics and Commerce; Americas; Europe; Refugees; Immigration


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