A new report reveals that Latin American and Caribbean migrants are transferring more money to their families back home than ever before.
Referred to as “remittances” by analysts, the annual money transfers exceeded $69 billion in 2016, according to central bank data compiled by the Inter-American Dialogue, a Washington, D.C. think tank.
The money has been a lifeline for the economies of many countries in the region since at least the 1990s when remittance tracking began. The 2016 tally is the highest amount on record, and an increase of nearly 8 percent over 2015.
Approximately 40 percent of the funds go to Mexico, and practically all of the money is sent by migrants in the United States. The recent surge is remarkable since migration from Mexico has slowed greatly. The number of migrants in the U.S. increased by only 1 percent between 2010 and 2016 to a total of 11.8 million. The median amount that any given Mexican migrant sends has also remained steady.
Manuel Orozco, a political scientist who authored the report, explains that a much larger share of Mexicans already in the United States are now wiring money home. In 2010 fewer than half of Mexican migrants transferred money back compared to two-thirds currently.
The volume of remittances is significant in relation to proposals that President Trump has floated to confiscate or otherwise target this cash flow to pressure Mexico into paying for border wall expansion. During the campaign, Trump discussed various iterations of the idea. Some of his plans would potentially impact remittances to all countries.
Such a move would certainly affect Mexico where remittances account for just over 2 percent of GDP, but the ramifications might be greatest for the region’s poorest, most violence-prone countries. Remittances account for nearly 20 percent of GDP for Honduras and El Salvador, and in Haiti they account for one-fourth of the country’s total GDP.
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