1 Migration and development: integration to the global economy and policy opportunities for donors Manuel Orozco Inter-American Dialogue, Washington, DC

2 Dinamycs of migrant transnacionalism “heightened competition among and within regions, mediated by such micropatterns as ethnic and family networks, accelerates cross- flows of migrants” James Mittleman

3 GDP: (X-M) + I + G + C -DOMESTIC SAVINGS - INVESTMENT -FOREIGN SAVINGS - INVESTMENT -FDI: Transnational capital, migrant capital investment -TECHNOLOGY TRANSFER -UNILATERAL TRANSFERS -ODA-  BILATERAL & MULTILATERAL -PRIVATE DONATIONS  FOUNDATIONS, PPOs, HTAs -WORKER REMITTANCES -Maquila, Tourism, Non-traditional exports -Transportation, Telecommunication, Nostalgic Trade The national income equation in Latin America: a rent seeking and courtesan state?

4 Diasporas and Transnationalism Spends up to US$1,000 Cuba79 Colombia46 Ecuador7 El Salvador34 Guatemala50 Guyana33 Honduras55 Mexico22 Nicaragua66 Dominican Rep. 32 Purchase home country goods Cuba81 Colombia29 Ecuador95 El Salvador56 Guatemala50 Guyana82 Honduras74 Mexico76 Nicaragua83 Dominican Rep. 65 Calls over 30 minutes a week Cuba40 Colombia10 Ecuador13 El Salvador59 Guatemala64 Guyana8 Honduras29 Mexico56 Nicaragua26 Dominican Rep. 44 Remittances See next chart Visits home country Cuba22 Colombia13 Ecuador38 El Salvador26 Guatemala9 Guyana39 Honduras12 Mexico23 Nicaragua19 Dominican Rep. 68 Donations Cuba5 Colombia Ecuador10 El Salvador3 Guatemala3 Guyana27 Honduras7 Mexico4 Nicaragua4 Dominican Republic3

5 Source: NMTA

6

7 Quarterly flows to selected Latin American countries

8 Phone calls from the U.S. CountryCallsMinutesUS Revenue Payment to country Revenue retained Cuba11,183,87390,380,39762,610,34752,157,81310,452,534 Haiti15,044,28594,403,30048,604,30738,477,93910,126,368 Jamaica46,043,174289,293,100166,799,717113,075,75153,723,966 El Salvador35,539,167298,097,546180,177,52570,982,303109,195,222 Guatemala31,497,001233,090,127146,081,06168,387,42077,693,641 Honduras26,036,557192,741,833143,055,59279,273,46863,782,124 Mexico765,800,3755,509,242,4992,858,624,2871,088,742,2031,769,882,084 Nicaragua13,915,05189,085,91559,579,37827,419,63032,159,748 Ecuador51,776,946303,335,545$130,928,057$75,383,274$55,544,783 Fuente: "2000 International Telecommunications Data," December 2001, Federal Communications Commission

9 Flights from the United States Fuente: "International Aviation Development Series," U.S. Department of Transportation PaisFlightsSeats Daily fligh ts Revenue Dominican Republic144122658648 $147,280,900.00 Haiti3175585811 $ 36,307,700.00 Jamaica96616528932 $107,437,850.00 Cuba10475003 $ 4,875,000.00 El Salvador5517560518 $ 49,143,250.00 Guatemala4656094016 $ 39,611,000.00 Nicaragua235331378 $ 21,539,050.00 Honduras4105636714 $ 36,638,550.00

10 The New Economies of Latin America: Betting on the Diaspora

11 Agriculture and Remittances

12 The reality of transnational families Is poverty out of the picture with transnational migration?

13 Remittance Sender A person who represents two thirds of immigrants; Sends regularly, at least seven times a year; Has an income below $30,000 (65%); Has a basic education below high school (70%); Sends about $3,000 annually; Has a longstanding commitment with their relatives (at least 5 years); Uses intermediaries to send money (70%); Does not have a bank account (56%)

14 Personal Income and Years living in U.S.

15 Immigrants and bank accounts

16 Annual Per capita Remittances and GDP

17 Viviendas que reciben remesas en zonas rurales y urbanas; y el ahorro del hogar

18 Dominican Republic remittance receiving households: Income and years receiving remittances

19 Percent cost of sending remittance

20 Remittances as Institutions of Development

21 Opportunities for development i. Reduce Costs ii. Savings, Credit and Banking iii. Link with hometown associations iv. Promote nostalgic markets and tourism v. Create institutional ties with the diaspora vi. Link remittances and technology

22 Strategy 1: Reduction in transfer costs Promotion strategic alliances between remittance agencies and banks, such as VISA with Quiqeyana, Banco Cuscatlan, Banco Uno y Gigante Express in Central America and the Dominican Republic Strategic agreements between banks in the country of residence and the country of origin  Bank of America, Citibank (C2iT), etc.  Software Platforms for banks: Mastrex International  ATMs and MAC: Mitchell’s Bank  Alliances among US and Latin American credit unions, such as IRNet

23 Strategy II: Savings, Credit and Remittances a. Monitoring transfers, especially the exchange rate b. Motivate savings and credit institutions to attract remittance senders and recipients c. Bring low cost banking centers where there is a high concentration of families who receive remittances d. Offer incentives to households that receive remittances; e. Allow micro-finance and credit unions to become agents of remittances and savings institutions

24 “The demand for financial services by remittance receiving households rests on the intersection between the role of microfinance institutions, such as credit unions, and rural sector development.”

25 Mexico: Remittances to rural households 15% recibe US$250 al mes, siete veces al año.

26 Strategy IIb: Remittances and Technology Wireless internet accessibility, Wi-Fi (Wireless Fidelity) offers the opportunity to integrate the rural sector using computer equipment at a low cost Computers with Wi-Fi send and receive information using radio waves This system could be used to send remittances This technology could be administered by local micro-finance institutions This system also could offer advantages to local businesses as to generate investment (such as a discount of half or a third of the actual price of a phone call) and simultaneously an opportunity for new markets

27 Strategy III: Alliances with Home Town Associations Seek communication and dialogue with HTAs; Social development  Donor technical assistance for project identification;  Support of a transnational community radio;  Donor support on governance and democratic participation;  Donor partnerships in social (health and education) and infrastructural projects Economic development  Government incentives to attract private sector involvement;  Government support in investment feasibility analysis; Financial infrastructure  Support education on financial services;  Support to link technology to education, communication and remittances in the rural areas.

28 Strategy IV: Expansion of Financial Investment

29 Strategy IVa: Promotion of the nostalgic market a. Risk and investment analysis b. Build partnerships between the private sector and the immigrant community; c. Financing small investment projects within rural sectors d. Involve home town associations and NGOs with strategies to invest

30 Strategy IVb: Tourism and Migration  Establish travel packages to traditional places  Establish new and innovative products for tourists  Create new investment strategies to promote tourism

31 Strategy V: Connecting the external community with assistance a.Adopt linking with the diaspora as part of the country’s foreign policy. Use the consulates as points of contact. b.Forge mutual confidence: a.Support their activities carried out as an organized group b.Establish ties through meetings and conferences; c.Help in the creation of a diaspora agenda; d.Carry out services demanded by the community; e.Implement summer camps programs c.Create an office of attention to nationals linving abroad a.Unit of community contact b.Unit linking the state and the community c.Unit of study and analysis

32 Promoting development through remittances and migration

33 Articulando el vínculo entre el desarrollo y la migración Visión regional e integral

34 Actividades financieras de los inmigrantes en país de origen

35 Ayuda a familia a cumplir con obligaciones económicas además del envío de remesas (préstamos inmobiliarios)

36 Rango de Actividades y Vínculos que se pueden establecer entre el Gobierno y su Diáspora Actividad Vínculos FacilitadorSocioEjecutador Familiaresmétodos económicos de contacto impulsar programas de becas de estudio Comunitarioscontacto con gobiernos locales proyectos de contrapartida Realizar tipo 2X1 Con Sociedad CivilComunicación con organismos sociales proyectos de apoyo social Con el Estadoculturales, económicos, grupo de interés Nicaragüense legalización,doble nacionalidad, voto en el exterior,

37 Macro-economic issues of remittances Effects on import capacity and foreign currency controls Multiplying effects Projections

38 Dominican Republic: exchange rate, remittances and interest (lending) rate

39 Jamaica: exchange rate, remittances and interest (lending) rate

40 Guatemala: exchange rate, remittances and interest (lending) rate

41 Ecuador: exchange rate, remittances and interest (lending) rate

42 Mexico: exchange rate, remittances and interest (lending) rate

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