The Mexican Connection

Friday, March 16, 2007

Among the crumbling adobe shacks of rural Mexico, two-story California- style housing developments are rising. In the tiny city of Tlacolula, plots of land that sold for about $10,000 in 1994 now cost $60,000. Like the towns where they are going up, the new developments are partly empty. The home owners are among the many Mexican workers?nearly one in seven overall, and half the adult population of some communities, such as La Pur?sima and San Juan Mixtepec?who are in the United States. Typically working low-wage jobs, they send home much of their pay (41 percent on average, or $300 a month) to support families left behind and build a better life for their return.

Remittances to Mexico exceed $20 billion a year. By 2003, they had become the nation?s second-largest source of external finance, ahead of tourism and foreign investment and just behind oil exports. That same year, then-President Vicente Fox noted that the roughly 20 million Mexican-origin workers in America create a larger gross product than Mexico itself.

Worldwide, remittances have surpassed direct aid in volume, and international development institutions (along with the governments of many less- developed countries) have recently seized upon them as a key to economic growth in the global South. The United States is the largest source of remittances?Saudi Arabia, with its armies of serflike guest workers, is No. 2?and Mexico the largest recipient of U.S. funds.

Source: The Atlantic (link opens in a new window)