The View from the North: No Money to Send Home


Photo: google.com

By SILVIO CANTO, JR.

For years, Mexicans living abroad have sent billions of U.S. dollars to their families back home.

These remittances are a social safety net in rural small towns across Mexico, maintaining entire families who might otherwise have no income, and are an increasingly important source of foreign revenue for the country.

According to a Fox News report, remittances to Mexico amounted to $36 billion in 2019, up from $34.5 billion the year before.

In simple terms, that’s about 3 percent of the total $1 trillion U.S. GDP.

For the sake of comparison, Mexico receives about $25 billion a year from tourism and $22 billion in annual petroleum exports.

So it must have been a lot more than a bit frustrating for the Mexican government to discover that unemployed migrants in the United States have no money to send home right now.

According to a report in the San Diego Union-Tribune, Erick Shneider, regional head for Latin America and the Caribbean with WorldRemit, there has been a dramatic drop in remittances from the United States to Mexico in the last three months, reflecting an international  trend spurred by the global covid-19 pandemic.

In fact, according the World Bank, global remittances are projected to decline by about 20 percent this year because of the economic crisis brought on by the covid-19 pandemic.

Shneider pointed out that more than 1.5 million households in Mexico receive remittances from abroad, and for many of them it represents their major source of income.

How long will the decline in remittances last?

It all depends on how long the U.S. economy is down.

How will this hurt Mexico and other countries that depend on this monthly transfer of currency?

It will hurt a lot; it already is hurting those Mexican families that depend on the remittances.

But at the same time, this could be a wakeup call for Mexico and other remittance-dependent nations around the world.

Maybe, must maybe, these governments will finally come to terms with the fact that they need to develop their own economies rather than depend on people abroad to “wire” cash home.

Categories: Economy, Health, Medicine, Mexico, Opinion, PoliticsTags: , , , , , , , , ,

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