November 22, 2002

Billions In Motion

Central banks across the region are tracking remittance income more carefully which has somewhat boosted the numbers they report. Nonetheless, there seems little doubt that the remittance flow has continued to increase over the past two years even as the U.S. economy dropped from its boom time peaks. In 2000 remittances to Mexico, El Salvador, Guatemala, Honduras and Nicaragua–nations that receive almost all their money transfers from the United States–totaled some $10.2 billion. This year that figure could reach $14.2 billion or more, a flow of $39 million a day. By 2005 the sum, which does not capture all remittances to Latin America, will go beyond $18 billion, according to projections by the Pew Hispanic Center. These figures are evidence of a kind of economic activity that is resistant to the U.S. business cycle. They also reflect the needs pressed by economic hard times in Latin America and efforts by governments in those receiving countries to smooth the flows. Moreover, they are indicators of an international financial activity that has grown markedly not only in size but also in the levels of competition and efficiency in the last few years. And, those sums are also the monetary expression of a profound human bond between people who come to the United States to work for long hours at low wages and the families they left behind.