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”.]

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