U.S. Immigration Raids Effecting Remittances, Economies of Migrants' Home Countries

According to the New York Times, the Inter-American Development Bank believes that Latin Americans working abroad are expected to send home over $100 billion annually by 2010, despite domestic efforts to slow undocumented immigration.  In 2006, Latin American migrants sent home $62 billion, with Mexicans sending the largest share for the year, at $23 billion.   

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. What worries Terry is that Latin America leads the world in remittances by a wide margin: "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.  

Although most of the remittance money remains outside of formal financial channels, the series of U.S. crackdowns on undocumented immigrants is further hindering efforts to get immigrants to use banks to send earnings back home, Terry says.  Using the banking system would allow migrants to open savings accounts, qualify for small business loans, 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.

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