According to the Financial Times:
Migrant workers sent back more than $62.3bn to their families in Latin America and the Caribbean last year, a rise of 14 per cent on 2005.
The figures, to be released this weekend at the annual conference of the Inter-American Development Bank, confirm that remittances have become one of the region’s most important sources of foreign exchange. For the fourth successive year they will exceed the combined flows of foreign direct investment and overseas aid into the region.
Mexico (with a total of $23bn), Brazil ($7bn) and Colombia ($4bn) receive most remittances, but the flows are especially beneficial for the poorer and more marginal countries of Central America and the Caribbean, where they account for more than 10 per cent of GDP in many cases.
Don Terry, head of the Multilateral Investment Fund, the IDB agency that monitors the flows, argues that as 8m-10m families “would be below the poverty line” without the remittances.
However, a clampdown by US migration officials on illegal immigrants could be contributing to a sharp slowdown in growth, Mr Terry claimed.
In Mexico, for example, remittances grew 25 per cent in the first quarter of 2006 but by only 5 per cent in the last three months of the year and by only 1 per cent in December. During that month immigration authorities conducted highly publicised raids on factories, such as meat-packing plants operated by Swift & Co, suspected of employing illegal immigrants.
Remittances from the US to Mexico are greater than all foreign direct investment into the country. Only oil revenues surpass them in export earnings. There are more residents of the state of Michoacan in the United States than there are in Mexico.
The two countries are about as tightly linked as two countries can be.