by Paul Gibson
Home >> Immigration Inc.
William Kole, an Associated Press journalist, came across a startling statistic: in just 2006 alone, the amount of cash remittances – cash that is sent by immigrants to their countries of origin – totalled nearly $276 billion according to the World Bank. This is nearly double the amount in the year 2000.
Why is this fresh news? The reason is simple. Ever since September 11th, public authorities have been tracking even small movements of capital or cash very closely for security purposes.
To give you an idea of how much money this represents, Kole compares this to the companies on the Fortune 500 list. If all of these guest workers banded together and decided to form their own company, the amount of revenue they generate would rank them #3 in the Fortune 500 list of most wealthy multinationals.
An economist at the World Bank, Dilip Ratha estimates that remittances even surpass the total amount of money directly invested in Mexico, tea exports in Sri Lanka, tourism revenue in Morocco, and revenue from the Suez Canal in Egypt.
Ironically, these money transfers are more prevalent during economic downturns, political crisis, natural disasters and wars. In such circumstances, immigrants tend to send money back home to satisfy the needs of relatives or family members that are in financial need.
If we take a look at the geographical circulation of capital, the winners and losers are clear. The US lost $41.1 billion in 2005, while Switzerland lost $13.2 billion. In the meantime, Poland and the Philippines are at the top of the list of winners, helping to keep their national economies functioning smoothly.
The world leader in remittances is India, taking in 23.7 billion dollars in 2005 and an estimated 26.9 billion just last year. In the last six years, the amount of financial transactions to India has grown by almost 90 percent. Many families rely on money sent from abroad back home to cover their basic needs.
Surprisingly enough, even with the amount of remittances reaching all-time highs, experts say that many immigrants still see their future back in their country of origin. For example, in Albania one of every three transactions that takes place involve expatriates buying back land. Other countries have also experienced a staggering exodus: take Moldavia for instance. This former Soviet Union Republic lost 400,000 of its 6 million inhabitants to work abroad. However, the amount of money that flowed back into the country was over $920 million in 2006 – that’s more than the total national budget!
Regardless of the location of immigrants, the fact remains the same: these countries’ citizens would not survive if it weren’t for the remittances from their relatives. Globalisation also has its positive effects.
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Posted on http://www.weeklyletter.com at 2007-08-28 10:00:00 +0200
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In many cases people wouldn’t have to send money back to their homeland if the native industries hadn’t been destroyed by the profit motive. Making a profit is only one possible reason for running a business. There are social and cultural reasons too.
A business without profit… a not-for-profit business? Yes, there are a number of these in many countries around the globe. But if businesses did not work for a profit, they would be unable to reward the efforts of their employees or open up new job opportunities for unemployed people.
Every country enjoys the positive and negative effects of globalisation. Unfortunately, I agree that there are a number of multinationals that try to prey on their native citizens by closing down factories and outsourcing a number of their services, but then again, paying less for production also lowers prices for consumers. It seems like there are two sides to every coin.
Thanks for your comment!
Paul
Hi Paul,
I think there is another point of view to see in this question. About bussiness, about money’s movements and especially, the most important and also dramatic point is the situation of all these people who need to travel to a foreign country, sometimes through illegal methods and risking their own lives, abandoning their family and beginning a new sacrified life, with the unique hope to do everything that they can in order to help their family survive in their own country.
I think this is the unacceptable face of globalisation, and also the real situation for a lot of people in the world.
In certain countries poverty is a real and a hurting thing.
Thank you for your comments Toni!
I think you make a very valid point about the amount of sacrifice that these immigrants make to take care of their families. However, the distribution of wealth among nations and globalisation are two different issues. Globalisation allows for reductions in production costs and also lowers the overall final price of goods and services in the market. Without it, a number of nations would be experiencing much higher inflation and much higher poverty levels. While globalisation may have some unintended and unintentional secondary effects, certainly the positive ones outweigh the negative ones. Where would we be today if just one country produced the mobile phone? I think we all know the answer to that. Cheers for now Toni!
Paul
Hi guys.
After all is not bad at all for those countries which lost citizens due to the migrations.People who try to find a good chance to survive in this competitive and hard world, leaving their families, roots, cultures, etc.
Most of the times they even have to pay a fortune to leave their country, they are told to come to the richest countries to find a job which make their families to survive in better life conditions while are cheated for the mafias.
Apart from this they have to send money back to their countries to make their family feel good. Families ususally get splitted due to the long time the man stay abroad working hard, the children get to be even spoiler due to the money get into their family from abroad and get into the bad vices.
Some financial institutions are looking to get a good profit from this range of customers who are really in need,and this business is even growing more and more.
Nowadays all this remittances are really controlled due to the laundry money which make clears all the money is sent to the original country.
Regards.
Thank you for your comments Ivan!
You make reference to a growing problem in the world: The separation of spouses due to career changes and migration. It must be extremely difficult for families to survive while one of their spouses is abroad. Children who grow up without one of their parents must be greatly affected by the absence of either of their parents. It is hard to generalise however. The fact that young children end up in mafias has to do with their parents’ lack of attention and care.
Your comments also remind me of the so-called promised land. The “land of milk and honey” was Israel for the Jews. The “promised land” for immigrants was the United States last century. It seems that more and more immigrants from Eastern Europe believe that their “promised land” is in Western Europe. We will have to wait and see how it all pans out. Thanks again for your comments!
Paul