Billions in US Remittances a Lifeline for Many in Mexico

Associated Press

April 5, 2016

Billions in US Remittances a Lifeline for Many in Mexico 

The billions of dollars in U.S. remittances that Donald Trump is threatening to block to force Mexico to pay for a border wall are a financial lifeline for the Latin American country's economy and millions of individuals who are supported by relatives up north.

For families across Mexico, the transfers help put food on the table and clothe children. They can make it possible to start a small business, put an addition on a cinderblock home or buy a secondhand truck to use on a farm.

So it's not surprising many Mexicans had negative reactions Tuesday to the Republican presidential candidate's proposal to cut off remittances from the more than 11 million Mexicans living in the United States unless Mexico makes a one-time payment of $5 billion to $10 billion.

"That money they send so their family here can live, I don't know how they could do that to them," said Ramiro Altamirano Macedo de la Concha, a 76-year-old taxi driver in Mexico City. "That man is half-crazy."

One U.S. group that favors reduced immigration called for less emphasis on the wall and more on ensuring people in the United States without authorization cannot work or enjoy benefits and services.

"If you don't think you will benefit from coming here illegally, you won't come here illegally," said Ira Mehlman, spokesman for the Federation for American Immigration Reform.

Mehlman said Americans have "made it perfectly clear" they are willing to pay for fencing where necessary if that reduces the cost of immigration.

"It is not about punishing Mexico, it is about benefiting the people of the United States. ... We don't need to threaten Mexico," he said.

Mexican government officials declined or did not respond to requests for comment.

Remittances to Mexico hit nearly $24.8 billion last year, more than the country gets from oil exports. Nearly all of that originated in the United States, with most of it going directly to individuals.

Trump's plan would hurt "because the remittances that come from the United States are a great help," said Carlos Martinez, a Mexico City resident whose brother in Seattle sends about $300 to their parents every other month.

The funds filter into Mexico's broader economy through purchases and investments, and stimulate production.

Alfredo Coutino, Latin America director for Moody's Analytics, said remittances account for 2.5 percent of Mexico's GDP, and the country's central bank has said they are responsible for keeping poverty from rising.

If Trump's proposal were to become reality, "it would go directly to consumption and, in practice, affect families who receive this income and who have begun to build new homes, ... to have flat-screen TVs, to have cellphones, and so on, in the most remote towns of the country," Coutino said.

That includes places that have seen higher levels of emigration due to poverty or violence, such as Oaxaca, Chiapas, Veracruz, Michoacan and Jalisco states.

"It would be hard for us. ... How are we going to support our family?" said Arnulfo Gonzalez, a 40-year-old in New York who sends $600 to $1,500 a month to his mother in Oaxaca. "Since we can't vote, we don't have any say."

Others were skeptical that the plan would ever be put in place.

"It's not reasonable. It's not logical. That rhetoric is just electoral strategy," said Aracelis Lucero, who was born in the United States and whose parents send money to relatives in the Mexican city of Puebla. "We shouldn't give it too much importance. All this is a bit frightening because people like this are being considered for the presidency. ... But the Latino vote counts for a lot."

Analysts say Mexican migrants would likely turn to other avenues such as sending hard cash with travelers or wiring through third countries. It could also create a market for the kind of informal, off-the-books money transfers seen in other parts of the world.

The remittances plan was also criticized by migrants' advocates and policy analysts.

Ricardo Ramirez, a political scientist at the University of Notre Dame, said that while he considers the Trump proposal unfeasible, in practice it would hurt companies like Western Union that make big money handling transfers.

"On the other hand," he added, "if remittances are impacted, then the economic stability of Mexico would be threatened. Which means there would be more of a push to have immigrants come to the U.S., so it might actually have the inverse effect."

For more information, go to:  www.beverlyhillsimmigrationlaw.com