NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

I attended the press conference Wednesday, at which the new findings on remittances. Interviews with 2500+ migrants in the US, the IADB (research by Bendixen & Associates) give us a statistically valid picture of the dimensions of US-LAC remittances, and the IADB concludes that the number is now around $45 billion dollars (up from the 2004 number, $30 billion), averaging $300 a month (up from the previously reported $200/month), and representing about 10% of the estimated $500 billion in income being earned by the 17.2 million adult LAC-region immigrants. That most of the senders and recipients are un-banked was described as an unrealized business opportunity, and as defining a policy agenda for the IADB.

What struck me in the IADB’s press release was the emphasis on the economic benefits of the migrant workers to the US economy, the fact that 90% was staying in the US and being spent here, and the “values” in evidence by the migrants’ “strong commitment to family and community,” as IADB President Luis Alberto Moreno put it during the press conference. The reason for this interesting formulation was readily apparent when Don Terry, head of IADB’s Multilateral Investment Fund (MIF), which has spearheaded the tracking of remittances since 2000, appeared later on the Lou Dobbs show on CNN. Here’s the full transcript. Their teaser framed the story: A new study says tens of billions of dollars are flooding out of this country and into Latin America as this nation’s illegal alien crisis deepens. And here’s how their correspondent introduced the IADB report: The latest look at money sent back to Latin American countries offers the biggest clue as to why the United States has an illegal alien crisis.

Ouch. A short half-life. In 2000, nobody knew what the amount of remittances was, or where they were going, or what their impacts might be. Now, in 2006, we know they are big (and the measured global number – around $225 billion – is undoubtedly an under-reporting of the real number), but knowing the number is big, some are complaining that this is money that is “flooding out” of the country.

The other interesting, and disturbing to me, part of the CNN “news” coverage was the following:

Bill Tucker (CNN reporter): Banks in the United States are aggressively encouraging the transfer of that money by reducing fees involved. Critics of this vast transfer of wealth point out that what these remittances amount to are unofficial and unhealthy forms of foreign aid.

Dan Stein, Federation for American Immigration Reform: Remittances are distorting the economies in both countries. They foster political corruption in Mexico and they prevent needed reforms. It is a bad, bad system, and we need to start clamping down on the major players that are promoting it.

So, in the view of CNN and FAIR, saving poor people money is bad, and ought to be stopped. It’s a worldview I can’t wrap my head around. I am willing to consider that the “safety valve” of overseas remittances can, theoretically, allow governments to avoid reforming their own economies, but whether it actually happens is another question. The utter immorality, however, of suggesting that we not only physically but also economically, close our borders, and in specific ways that are targeted at the poor, is just shocking beyond comprehension. Shame on you, CNN; shame on you Dan Stein and FAIR. But it’s not only immoral, it’s stupid. Make any move to seal off the economy, addicted to foreign ownership of American debt, by limiting free flow of capital and it goes into a free-fall.