Feb 042016
 

Remittances sent home by Mexican migrants (almost all of them residing in the USA) rose to $24.8 billion last year, up 4.75% compared to 2014.

The average remittance sent to Mexico in 2015 was $292.00, a slight decline. Almost all remittances (97%) are now sent via electronic transfer.

Figure 1 of Pew Report

Figure 1 of Pew Report. Shaded area is period of recession.

Low oil prices have led to a sharp decline in the value of Mexico’s oil exports. Oil revenues last year totaled $23.4 billion, which means that remittances now exceed oil revenues as a source of foreign exchange. Before the implementation of NAFTA in 1994, oil revenues accounted for around 80% of all Mexico’s foreign exchange. In 2015, that figure was less than 20%, showing the degree of economic diversification that has been achieved post-NAFTA.

The value of oil exports in 2015 was also significantly lower than the value of manufactured goods exports, or the value of agricultural exports.

Want to learn more about remittances?

May 282015
 

Remittances sent home by Mexican migrants (almost all of them residing in the USA) rose to $2.26 billion in March 2015, 7.6% higher than the same month a year earlier. This was the highest monthly figure since May 2012, and the highest ever figure for March.

The average remittance sent to Mexico in March 2015 was $311.30, the highest figure since July 2012, and the number of transfers was 7.25 million.

The March figure brought the total remittances for the first quarter of this year to $5.7 billion, 4.9% higher than the same period in 2014.

Workers in California sent remittances worth $1.59 billion home during the first three months of this year, more than the workers in any other state. Texas came in second place with $763.9 million and Illinois placed third at $199.3 million.

The three main receiving states in Mexico were:

  • Michoacán – $603 million
  • Jalisco – $539 million
  • Guanajuato – $509 million

For an introduction to the topic of remittances, with links to some of the key posts on this blog, see

A comprehensive index page listing all the posts oon Geo-Mexico related to migration and remittances can be found at Migration and remittances: an index page.

Remittances fell 3.75% in 2013 but look set to rise in 2014

 Mexico's geography in the Press  Comments Off on Remittances fell 3.75% in 2013 but look set to rise in 2014
Feb 062014
 

Figures from Mexico’s central bank (Banco de México) show that the value of remittances sent home by Mexicans working in the USA fell 3.75% in 2013, compared to the previous year.

Annual remittance totals in billions of dollars:

  • 2013 – 21.596
  • 2012 – 22.438
  • 2011 – 22.802
  • 2010 – 21.303

Trends in remittance payments are closely linked to trends in the US economy, so the slight fall in the past two years is no great surprise, as the US economy struggles to regain growth following the 2008 financial crisis.

There are some positive signs. Despite the decline over the year as a whole, the month of December saw remittances entering Mexico of 1.8 billion dollars, higher than any December since 2007.

In the last quarter of 2013, remittance payments were 3.46% higher than for the same period in 2012 (mainly due to a higher number of remittance payments), suggesting that remittance payments may now be on the rise again. The average amount remitted during the last quarter of 2013 was 285.34 dollars, 3.8% less than the average for the equivalent period in 2012.

Note: These remittance figures quantify only remittances sent via “formal” channels such as banks, and do not include informal payments carried directly back to Mexico by family or friends.

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Remittances to Mexico from USA decline slightly in 2013

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Nov 232013
 

Using recent World Bank data, the Pew Research Center conducted an in-depth analysis of remittances sent from the USA to Latin American countries.

Remittances to Mexico peaked at over $30 billion in 2006, but as a result of the Great Recession, have declined by roughly 29% to an estimated $22 billion in 2013. (The analysis is based on constant 2013 US dollars).

Figure 1 of Pew Report

Figure 1 of Pew Report. Shaded area is period of recession.

On the other hand, remittances to all other Latin American countries reached almost $31 billion in 2008, declined slightly but were up to almost $32 billion in 2013 (see graph).

Note that the data are for remittances sent through formal channels such as banks and formal money transfer businesses. The average cost of sending these formal remittances is significant, an estimated 7.3% in late 2013. If all informal remittances were included, the remittances to Mexico would be an estimated 50% higher, or over $30 billion.

The study focuses particular attention on Mexico because it receives more than 40% of all remittances from the USA to Latin America. Mexico ranks 4th worldwide in total remittances, behind India ($71 billion), China ($60 billion) and the Philippines ($26 billion). These three other countries get remittances from many countries throughout the developed world while 98% of Mexico’s remittances come from the USA. The remaining 2% come mostly from Spain and Canada. No other country in Latin America receives more than 90% of their remittances from the USA. Spain is a bigger source of remittances than the USA for Argentina, Bolivia, Paraguay and Uruguay. This is a bit surprising given the horrible current economic situation in Spain. Many Spaniards are now migrating to Mexico in search of work.

The USA is by far the largest source of all worldwide remittances with $123 billion, followed by Saudi Arabia $28 billion and Canada $24 billion. However, on a per capita basis or percentage of GDP basis, Saudi Arabia, Canada and many other countries send significantly more in remittances than the USA.

The main reason why remittances to Mexico declined after 2006 is that the Great Recession very seriously hurt the construction industry, a main source of jobs for Mexican immigrants. Related to this, the overall loss of jobs in the USA meant that many immigrants returned to Mexico. In recent years it appears that more have returned to Mexico than have migrated to the USA. Thus the number of Mexican-born residents in the USA is declining very slightly for the first time since the Great Depression in the 1930s.

While remittances are extremely important to specific Mexican households, particularly rural households in western Mexico, remittances are not as important to the overall Mexican economy as they are to some other countries. Remittances account for about 2% of the overall Mexican GDP compared to 17% in El Salvador, 16% in Honduras and 10% in both Guatemala and Nicaragua.

The average amount of remittances sent by Mexican immigrants is rather low compared to immigrants from other countries. On average immigrants from Mexico over age 18 sent $2,115 in remittances per year, compared to $5,558 for immigrants from Guatemala, $5,231 for Honduras, $3,076 for Dominican Republic and $2,939 for El Salvador. We do not know if immigrants from these other countries had higher paying jobs than those from Mexico.

Source:

D’Vera Cohn, Ana Gonzalez-Barrera and Danielle Cuddington, “Remittances to Latin America Recover – but Not to Mexico”, Pew Research Center, November 15, 2013.

For more detail about remittances in Mexico, see:

 

Value of remittances entering Mexico declines in 2012

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Feb 042013
 

Mexico’s central bank has released figures showing that remittances entering Mexico in 2012 totalled $22.446 billion, 1.57% less than the $22.803 billion  recorded in 2011. [All figures in US dollars.]

The central bank registered 71.62 million remittance movements in 2012, 2.52% more than the year before. The average remittance fell by about 4% from $326 in 2011 to $313 in 2012.

The state receiving most remittances was Michoacán which accounted for $2.209 billion, almost 10% of the total.

Remittances are the second largest source of foreign exchange after oil and gas revenues and are a vital source of funding for millions of people.

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Remittances are on the rise

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Jun 092012
 

The annual total of remittances sent back to families in Mexico by migrant workers in the USA increased year-on-year to 22.731 billion dollars in 2011, and looks set to rise again this year.

Mexico’s central bank (the Bank of Mexico) recently released figures showing that remittances to Mexico increased in April 2012 by more than 8% compared to the same month a year earlier, bringing the cumulative total for the first four months of this year to 7.4 billion dollars, 6% higher than in the same period in 2011.

These increases in remittance flows come despite increasing evidence that the net flow of migrants leaving Mexico to work in the USA has come to a standstill:  Net migration flow from Mexico to the USA falls close to zero or has possibly reversed.

For more detail about remittances in Mexico, see:

 

Update: Remittances worth almost 23 billion dollars in 2011

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Mar 092012
 

Remittances sent home by Mexican migrants, almost all of them residing in the USA, rose 6.9% in 2011 (compared to 2010) to 22.730 billion dollars. Remittances are the second largest source of foreign exchange in Mexico after crude oil exports.

The average amount sent was 326.26 dollars, with 98% of remittances made via electronic transfer. The states receiving most remittances were Michoacán (2.238 billion dollars, 10% of the total), Guanajuato (2.147 billion), Jalisco (1.889 billion), the State of Mexico (1.653 billion) and Puebla (1.465 billion).

For more detail about remittances in Mexico, see:

Mapping remittance flows to Mexico, a practical exercise

 Books and resources, Teaching ideas  Comments Off on Mapping remittance flows to Mexico, a practical exercise
Jan 262012
 

Looking for a practical exercise about migration and remittance flows to challenge your students?

Remittances (the funds sent by migrant workers back to their families) are a major international financial flow into Mexico. Remittances bring more than 20 billion dollars a year into the economy, an amount equivalent to 2.5% of Mexico’s GDP. On a per person basis, Mexico receives more worker remittances than any other major country in the world. An estimated 20% of Mexican residents regularly receive some financial support from relatives working abroad. Such remittances are the mainstay of the economies of many Mexican families, especially in rural areas of Durango, Zacatecas, Guanajuato, Jalisco and Michoacán.

Two data tables [see link]  included in the World Bank Working Paper by Raúl Hernández-Coss, referred to in several previous posts, offer an ideal starting-point for practical mapping and analysis exercises for students. (The data is from 2004 but we are more interested in general patterns than precise values). The data tables are here:

A ready-made printable base map, showing the state boundaries of Mexico and USA, can be found here:

Suggested mapping exercises:

1. Which US areas have most Mexican migrants?

Use Column 2 (Mexican nationals living in this jurisdiction) of Table VI.A.1 and draw proportional circles on a base map to show which areas have most migrants. [To draw circles where the area of each circle is in direct proportion to the number of Mexican nationals, the first step is to calculate the square root of each number. These square roots are then used as the basis for working out the diameter (or radius) of the circle you draw for each location. The area of each circle is then proportional to the number of migrants. Remember to choose the most appropriate scale for the circles, so that it is easy to compare places. (If you draw very small circles, or super-large circles, they will be difficult to compare!)

2. Which US areas send the highest value of remittances back to Mexico?

Use column 4 of Table VI.A.1 to show the value of total “annual remittance flows” on a base map. You may be able to superimpose this information on the same base map you drew for Q1 which would make it very easy to see if the areas with most Mexican nationals send the most remittances back to Mexico each year. Can you see any anomalies on your map, either where an area sends far more remittances back than might be expected from the number of migrants, or where an area sends only a small value of remittances back despite having a very large number of Mexican nationals?

3. How does the “average remittance” (column 5 of Table VI.A.1 vary?

Use the available figures to see if you can identify any pattern to which areas send relatively large remittance payments, and which send much smaller average payments.

4. Where do all the remittance payments go?

Level One: Use the information from Table VI.A.2 to draw a map with arrows showing the largest single flows from each area in the USA to their corresponding state in Mexico.

Level Two: Work out the dollar value of the main remittance flows, by using the % figures given for some areas in Table VI.A.2 and their corresponding total annual remittance values from Table VI.A.1. (eg the value of the Los Angeles to Jalisco flow is 26% of $7,886.3 million). Then map the ten largest flows using flowlines (arrows where the width of each arrow is proportional to the value of remittances).

Look at the map or maps created and see if you can identify any patterns. If you can describe a pattern, then also look to see if you can find any anomalies, and try to explain your findings.

Related posts:

Mexican Home Town Associations (HTAs) and their considerable effectiveness

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Dec 292011
 

Home Town Associations (HTAs) are associations created by migrants to promote links between their hometown communities of origin (Mexico) and their communities of residence in the USA. Many HTAs raise money (via dances, raffles, beauty pageants and other events) to fund public works and social projects in Mexico.

Mexico offers important additional funding to multiply the impact of “collective remittances” sent home from HTAs. Every dollar sent home is matched by three dollars, one from each level of Mexico’s political administration: federal, state and municipal. This means that a relatively small input of dollars from an HTA can be the catalyst to fund a school or new road.

From 1993 to 2000, investments financed by the program totaled $16.2 million, for projects ranging from street paving, irrigation and drainage to new or revamped cemeteries, parks, plazas, community centers and athletic facilities. The average cost of these projects is $56,000; almost two-thirds of projects are in communities of fewer than 2000 inhabitants.  [Source: “Migrant’s Capital for Small Scale Infrastructure and Small Enterprise Development in Mexico,” World Bank, January 2002.]

Case study of the 3×1 scheme: Atacheo de Regalado (Michoacán)

Atacheo de Regalado has a population of fewer than 2000 inhabitants, and is only 15 km. northeast of the large commercial city of Zamora, in the state of Michoacán.

Atacheo de Regalado has implemented five productive community projects under the “3 dollars for 1” scheme, based on remittances sent home from migrants in the USA, mainly in Illinois. The projects, involving 336 families, have been organized by the priests of a local church, and include a turkey farm, a goat farm, hydroponics green houses to grow vegetables and flowers for export, a factory for loudspeakers and baffles, and a bull-fighting ring. These five projects represent a total investment of about $1.5 million (dollars). The community exported 220 tons of tomatoes to the USA in 2003.

Two more projects, will need investments of about $2 million to complete, are planned:

  • 1. A rastro (meat factory) to process up to 2000 turkeys a day for sale to supermarket chains.
  • 2. A pasteurization plant for goat milk, to process up to 40,000 liters daily for export to the USA.

[This post is based on the World Bank Working Paper by Raúl Hernández-Coss, entitled “The U.S.–Mexico Remittance Corridor: Lessons on Shifting from Informal to Formal Transfer Systems”.]

Related posts:

 

The typical remittance, the last mile, and the effects of remittances on recipient communities

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Dec 262011
 

What are the characteristics of a “typical” remittance? The average remittance amount has remained fairly stable in the past decade. Migrants sending remittances do so about once every month, and send between $280 and $370 each time. Remittance amounts tend to decrease over time; migrants who have lived in the USA for a long time send fewer dollars back home than those in their first year or two. Some migrants continue to send funds back home even after living for 20 years or more in the USA. [This post is based on the World Bank Working Paper by Raúl Hernández-Coss, entitled The U.S.–Mexico Remittance Corridor: Lessons on Shifting from Informal to Formal Transfer Systems.]

The recipients

Remittance payments do not only go to Mexico’s poorest families. Recent surveys show that the there is very little difference between the monthly income of recipients of remittances in Mexico and the national average monthly income. The educational level of recipients is also close to that of the overall population.

The last mile: how do recipients receive remittances?

Depending on how they are sent, remittances can be collected by recipients in Mexico in several different places. These include banks, some department stores, post offices, casas populares (akin to credit unions), microfinance institutions, neighborhood stores and currency exchange outlets.

Effects of Remittances on Recipient Communities

These effects can be examined at a variety of scales.

At the household level, remittances are believed to have an overall positive effect on the recipient economy. Some studies have reported that remittances from the USA account for 20% of the capital invested in micro-enterprises in Mexico. The spending of remittances has a multiplier effect in local communities. On the other hand, remittances may also have some negative effects on households. Some families may become overly dependent on regular remittance payments and lose the incentive to work or improve labor skills.

At the community level, remittances from the USA are often used for community projects in the migrants’ “home” towns and villages in Mexico. This implies a much greater degree of organization (than for household-level impacts) and carries socio-political implications. There are dozens of “Home Town Associations” in the USA, each linking migrants to their home community. In many cases, these give migrants an on-going, increasingly effective, voice in the decisions taken in their home communities.

On the flip side, remittances have inflated the price of land and property in some communities, as many migrants use remittances to purchase property in their native community with the intention of eventually returning to live there. In some villages, the large houses they have built remain empty most or all of the year, too expensive to rent at local rates.

Migrants have acquired some political power. This has been recognized by the Mexican government which has introduced mechanisms allowing Mexican migrants to register and vote in presidential elections.

Case study: remittances received by Tlacolula (Oaxaca).

The city of Tlacolula, in Oaxaca, has about 13,500 inhabitants and is a marketing center for surrounding municipalities. Remittance funds sent back to Tlacolula is first used to pay off any debts incurred in financing the trip to the USA. Most of the remainder is then used to build houses. In the past decade, the value of land and building materials has risen extremely rapidly. For instance, it is reported that a 400-square-meter building plot that cost $10,000 (dollars) a decade ago now costs about $60,000. Returning migrants do not always bring savings back with them, but do bring new skills, and possibly tools, such as those required to be an electrician or plumber.

Active participants in globalization

As the World Bank study states, “The families and communities affected by remittances are active participants in globalization. In addition to exchanging funds, they maintain ties between migrants and their origins, as people move north, and money moves south. The exchange does not stop with personal family remittances. Links between communities on either side of the border are also fostered through home town associations (HTAs).” We will look more closely at HTAs in a future post.

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