Surprise, surprise: Migrant remittances to Mexico and Central America are soaring
With Joe Biden's border surge on, only the "experts" were surprised to learn that remittances increased to the countries that supply the illegal aliens to the U.S.
According to yesterday's Mexico Daily Post:
Remittances to Mexico from abroad jumped 11.2% year on year in February while dropping from the prior month, according to data published by the country’s central bank on Monday, April 3rd.
Remittances hit $4.3 billion in February, down from the $4.4 billion sent in January.
The number of transactions, made mainly from the United States, increased in February by 10.9% year on year, while the average amount per transfer grew 0.3% to $375.
In the first two months of 2023, remittances reached $8.9 billion, up 11.8% from the $7.8 billion posted in the year-earlier period.
Remittances to Mexico from abroad hit a record high of $58.5 billion in 2022.
This, to be honest, was kind of surprising, even to me, given that Mexico was not seen as a country that was supplying much of the ongoing border surge's illegal alien count.
The Mexican government was enabling it, of course but the nationals involved tended to come from Central and South America, rather than Mexico itself. The country had been badly hit by COVID, meaning many people were thrown out of work there and needed to rely on relatives abroad to send a lifeline, which may explain some of it. It's also true that not everyone who sends remittances to another country is an illegal alien — many legally present foreign nationals also send remittances to their families back home. But it's also a fact that the more recently an immigrant has arrived here, the more likely he is to send remittances to relatives back home. Let's just say that this new figure may raise questions about whether Mexico is being undercounted in Border Patrol data or signals that the migrant gains that were there, legal and illegal, had an outsized impact.
And if Mexico's sendings of immigrants and illegal aliens had this impact, the bigger question is what the impact looks like for other countries, particularly those that dispatch the greatest numbers of illegal aliens to the U.S. border. Many don't release proper data, but there are signs that the gains were gargantuan.
Just four months ago, Bloomberg News reported this:
SAN SALVADOR — Remittances to Central America's so-called 'northern triangle' (El Salvador, Guatemala, and Honduras) are on track to set a new record, breaking the one set in 2021.
From January to September, remittances to the three countries totalled $25.49 billion, an increase of 16.5%, or $3.61 billion more than the figures between the same period of last year. The figures for the same period of 2021 were a 34.2% increase over the same period of 2020.
Remittances this year are so far the second-largest in the past decade, and may surpass the total for 2021, based on data from central banks, and the executive secretariat of the Central American Monetary Council (SECMCA).
One can surmise that the gains in Colombia, Venezuela, and Ecuador are at least as high as Mexico's.
Remittances, according to the World Bank and other eggheads who study the matter, have their good and bad points.
For those who receive them, they are obvious lifelines. For those who don't have money in their home countries and who would starve or grovel otherwise, getting a remittance is a blessing. If one of us had a relative in such conditions, sending the money would be the right thing to do. But there are some negatives, too. According to the IZA World of Labor think-tank, the illegal migration that brings the remittances can lead to labor shortages in the home country and bring in inflation and a consumption culture instead of an investment and savings culture brought on by work, as cash floods a country and there's not enough local economy to support it. Ultimately, it can make a receiving country's actual economy non-competitive in the global market, and we know there have been signs of that already in Central America.
Remittances also beef up the banking balance sheets of third-world countries, which reduces pressure on governments to improve their own home conditions by instituting policies that create jobs for locals. If the locals go to America for jobs, why would they need to balance their budgets or make life less hellish for local businesses so they can create jobs in the home country?
Remittances leave these governments with a lot of money to play around with and fewer potential protestors and dissidents to worry about. It's no secret that badly run countries love remittances.
One potential source of the remittance cash, particularly as it applies to Mexico, though, can be seen in this report from The Economist, which stated that Mexico now receives more remittances than China:
The surge owes much to stimulus in the United States, which put dollars back in pockets, as well as to the generosity of migrants, who have dug deep to help relatives in need. Yet bumper flows during the pandemic capped what had already been a decade of fast-rising remittance growth. Over ten years the sums sent home annually to countries in Latin America and the Caribbean have more than doubled, according to the World Bank. That is a swifter rate of increase than in any other region.
Stimulus cash? The shoveled-out cash here that "paid for" all the inflation we have now? The cash that had six ways to Sunday for fraud? Many states paid no attention to people's legal status when they doled out all the stimulus checks, and others did, meaning legal immigrants got the checks for not working — and passed them on abroad. For America's economy, which was supposed to benefit from this cash, well, it went to other countries instead.
What a sad coda to the wretched stimulus experience. Crummy third-world countries that can't even create living conditions that their citizens want to live in got the benefit of the money. We got the inflation. Now we are getting more potential remitters with the border-surgers.
Something's wrong with this picture, and from more than one viewpoint.