Remittances are not Aid for Development
By Manuel E. Yepe*
What the industrialized countries actually intend when they refer to the remittances that immigrants send to their relatives as "development assistance" is to disguise a cruel form of exploitation of the South by the North.
Emigration is said to be a factor of social tension decompression, remittances a source of financial income for the émigré's home country.
Truth be told, these fresh money transfers have come to be a significant chunk of their native land's GDP and a major boost for their balance of payments.
However, in the longer term, the exodus of young hands and their family's reliance on the money they get from them become an obstacle to development in the emigrant's country.
Better put: the economic crisis fuels mass exodus, and the remittances sent by those who leave ease the burden of its immediate impact, but crises tend to worsen in the medium or long run because their root cause, far from changing, has gotten worse, precisely as a result of the nonstop exodus.
In 2001, when the U.S. president threatened to order a mass expulsion of illegal immigrants, many Latin American governments had to beg him for mercy, because such measure would have brought with it insurmountable crises of governance and the collapse of their economies, unable as they were to take in so much people and do without their remittances.
When all indications were that Schafik Jorge Handal, the leftist Farabundo Martí National Liberation Front's presidential candidate, would have scored a landslide victory in El Salvador, the President warned he would prohibit U.S.-based Salvadorians from sending any money back home, should Handal win.
Depending on remittances turned that country into a hostage of the empire, which thus succeeded in imposing the candidate of the right-wing ARENA (Alianza Republicana Nacionalista).
Data issued by BID (Banco Interamericano de Desarrollo) and CEPAL (U.N.).
Economic Commission for Latin America), the money that these Latin American immigrants send to their countries has grown fiftyfold -- from one billion to more than 50 billion a year -- in the last 25 years.
In six of those countries, remittances exceed 10% of their GDP: Haiti (17%), Nicaragua (14%), El Salvador (13%), Jamaica (12%), the Dominican Republic (10%) and Ecuador (10%).
According to official sources, 169 billion dollars in remittances made it to Third World countries in 2005.
There are 25 million Latin American immigrants in the United States and the European Union, and half of them send money to their home countries.
In 2006, the abovementioned remittances added up to 60 billion, and 45 billion were sent from the United States alone by around 12.5 million Latin Americans, BID assured.
The Mexican immigrants in the U.S. send to their country four times the value of its agricultural exports, an amount that surpasses its income from tourism and is close to its total oil exports.
Also from the U.S. comes 43% of El Salvador's hard currency, and this figure reaches 35% and 21% in Nicaragua and Ecuador, respectively, not including the money sent by émigrés from those countries elsewhere.
Concealed by these numbers, the tragedy lies in the fact that the supposed economic growth is directly proportional to the increasing emigration.
Remittances received in Latin America are estimated to grow at an annual rate of 7 to 10%.
Judging from this rate of growth, and the amount of money sent, the opulent North would seem to be finally starting to compensate the South for so many years of plundering.
Not by a long shot. For centuries, global capitalism has cruelly stripped the underdeveloped world of its wealth, sacking its natural resources, subjecting those countries to unfair trade practices and mercilessly exploiting their labor.
That the remittances sent by their émigrés end up as a form of sustenance of the Third World's increasingly impoverished nations is a denunciation of a crime rather than a cause for satisfaction.
Given the current terms of exchange, if no real assistance is provided to development, if the foreign debt now choking the continent's developing countries is not cancelled, if neocolonialist "integration" mechanisms such as the FTAA continue to be forced upon them, if the rich countries keep imposing agricultural and commercial protectionist practices inconsistent with their own neoliberal claims, no benefit is to be derived by the poor nations from their émigrés' remittances.
As long as the developing countries fail to find ways to encourage their exports or measures are not implemented to keep the big transnational corporations from exploiting labor, preying upon and speculating with national assets in order to stop undercapitalization in and brain drain from those poor nations; if investments are not fostered that expand labor markets and curb popular emigration, remittances will be but a palliative to sooth an ever unbearable act of injustice.
*Manuel E. Yepe Menéndez is an attorney, economist and political scientist who works as a Professor for Havana's Higher Institute of International Relations.
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