Globalization and migration: integrating in
the global economy
Manuel Orozco
Inter-American Dialogue,
Washington, DC
Dinamycs of migrant
transnacionalism
“heightened competition among
and within regions, mediated by
such micropatterns as ethnic and
family networks, accelerates crossflows of migrants” James Mittleman
The International Context of Diasporas
Infl
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The national income equation in Latin America: a rent
seeking and courtesan state?
GDP: (X-M) + I + G + C
-Maquila, Tourism, Non-traditional exports
-Transportation, Telecommunication, Nostalgic Trade
-DOMESTIC SAVINGS - INVESTMENT
-FOREIGN SAVINGS - INVESTMENT
-FDI: Transnational capital, migrant capital investment
-TECHNOLOGY TRANSFER
-UNILATERAL TRANSFERS
-ODA-à BILATERAL & MULTILATERAL
-PRIVATE DONATIONS
èFOUNDATIONS, PPOs, HTAs
-WORKER REMITTANCES
Diasporas and Transnationalism
Spends up to US$1,000
Cuba
79
Colombia
46
Ecuador
7
El Salvador 34
Guatemala
50
Guyana
33
Honduras
55
Mexico
22
Nicaragua
66
Dominican Rep. 32
Calls over 30 minutes a week
Cuba
40
Colombia
10
Ecuador
13
El Salvador 59
Guatemala
64
Guyana
8
Honduras
29
Telecomm
Mexico
56
Nicaragua
26
Dominican Rep. 44
Tourism
Visits home country
Cuba
22
Colombia
13
Ecuador
38
El Salvador
26
Guatemala
9
Guyana
39
Honduras
12
Mexico
23
Nicaragua
19
Dominican Rep. 68
Trade
5Ts
Transp
Transfer
Purchase home country
goods
Cuba
81
Colombia
29
Ecuador
95
El Salvador 56
Guatemala
50
Guyana
82
Honduras
74
Mexico
76
Nicaragua
83
Dominican Rep. 65
Remittances
See next chart
Donations
Cuba
Colombia
Ecuador
El Salvador
Guatemala
Guyana
Honduras
Mexico
Nicaragua
Dominican
Republic
5
10
3
3
27
7
4
4
3
Monthly Average Sent by Immigrants from the US (US$)
146
Nicaragua
162
Haiti
191
Peru
Argentina
198
Dom. Rep.
199
222
Panama
228
Venezuela
256
Colombia
Honduras
257
Jamaica
263
269
Guatemala
276
Bolivia
287
El Salvador
295
Ecuador
303
Chile
304
Paraguay
350
Costa Rica
376
Brazil
378
Mexico
0
50
Source: NMTA
100
150
200
250
300
350
400
Central America in the Global Economy, 2000 (in
millions of US$)
Guatemala
Sector
Remittances
El
Salvador
Honduras
Nicaragua
Costa Rica
560.1
1750.7
409.1
600.0
43.2
2276.2
2476.7
698.5
522.8
4643.2
Maquiladora
373.8
456.3
623.5
102.2
1221.8
Official Development
Assistance
264.0
180.0
449.0
562.0
12.0
International Tourism
518.0
254.0
240.0
116.0
1102.0
18988.0
13211.0
5932.0
2396.0
15851.0
Merchandise Exports
(not including
maquiladora)
GDP
Percentage:
21%
39%
41%
79%
R+X+A+T/GDP
Sources: World Bank 2002, “World Development Indicators CD-ROM”; CEPAL 2002.
44%
Worldwide flows of worker remittances by
region, 2002
Europe & Central
Asia, 13%
East Asia & Pacific,
14%
South Asia, 20%
0%
10%
20%
30%
Middle East & N.
Africa, 18%
Southern Africa,
5%
40%
50%
60%
Latin America &
Caribbean, 31%
70%
80%
90%
100%
Mexico, US Billions
$12.00
$2.50
Annual Remittance Transfers to Latin America
Colombia
$10.00
Dominican Rep.
$2.00
Ecuador
El Salvador
$8.00
Guatemala
Honduras
$1.50
Jamaica
U.S. Billions
Nicaragua
$6.00
Cuba
Haiti
$1.00
Mexico (right axis)
$4.00
$0.50
$2.00
$0.00
$0.00
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Quarterly flows to selected Latin American countries
680
4000
Jamaica
Guatemala
Quarterly flows to selected Latin American countries
El Salvador
580
Dominican Republic
3500
Ecuador
Colombia
Mexico (right axis)
3000
480
2500
380
2000
1500
280
1000
180
500
80
0
1999- 1999- 1999- 1999- 2000- 2000- 2000- 2000- 2001- 2001- 2001- 2001- 2002- 2002- 2002- 2002- 2003- 20031Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
Phone calls from the U.S.
Country
Calls
Minutes
US Revenue
Payment to
country
Revenue
retained
Cuba
11,183,873
90,380,397
62,610,347
52,157,813
10,452,534
Haiti
15,044,285
94,403,300
48,604,307
38,477,939
10,126,368
Jamaica
46,043,174
289,293,100
166,799,717
113,075,751
53,723,966
El Salvador
35,539,167
298,097,546
180,177,525
70,982,303
109,195,222
Guatemala
31,497,001
233,090,127
146,081,061
68,387,420
77,693,641
Honduras
26,036,557
192,741,833
143,055,592
79,273,468
63,782,124
765,800,375
5,509,242,499
Nicaragua
13,915,051
89,085,915
59,579,378
27,419,630
32,159,748
Ecuador
51,776,946
303,335,545
$130,928,057
$75,383,274
$55,544,783
Mexico
2,858,624,287 1,088,742,203 1,769,882,084
Fuente: "2000 International Telecommunications Data," December 2001, Federal Communications Commission
Flights from the United
States
Daily
Pais
Dominican Republic
Flights
Seats
fligh
ts
Revenue
1441
226586
48
$147,280,900.00
Haiti
317
55858
11
$ 36,307,700.00
Jamaica
966
165289
32
$107,437,850.00
Cuba
104
7500
3
El Salvador
551
75605
18
$ 49,143,250.00
Guatemala
465
60940
16
$ 39,611,000.00
Nicaragua
235
33137
8
$ 21,539,050.00
Honduras
410
56367
14
$ 36,638,550.00
$
4,875,000.00
Fuente: "International Aviation Development Series," U.S. Department o f Transportation
The New Economies of Latin America: Betting on
the Diaspora
Guatemala: Trade and Remittances
$1,600,000,000.00
100%
$1,400,000,000.00
80%
$1,200,000,000.00
$1,000,000,000.00
60%
$800,000,000.00
40%
$600,000,000.00
$400,000,000.00
20%
$200,000,000.00
Remittances (Y1)
Coffee Exports (Y1)
Trad. Exports (Y2)
$0.00
0%
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
The reality of transnational
families
Is poverty out of the picture
with transnational migration?
n
n
n
n
n
n
n
n
Some characteristics
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%)
Length of time living in the U.S. and amount sent
45.00%
40.00%
35.00%
30.00%
25.00%
Between $1 and $100
20.00%
Between $100 and $300
Poly. (Between $1 and $100)
Poly. (Between $100 and $300)
15.00%
Less than one year
Between 1 and 5 years Between 5 and 10 years
More than 10 years
Personal Income and Years living
in U.S.
Hasta 10,000
35
Entre 10,001 y 15,000
Entre 15,001 y 20,000
30
Entre 20,001 y 25,000
25
Entre 30,001 y 35,000
Entre 25,001 y 30,000
Más de 35,000
20
15
10
5
0
Less than six
years
Seven to
twelve
Over twelve
years
Immigrants and bank accounts
80
70
Colombia
Cuba
Ecuador
El Salvador
Guatemala
Guyana
Honduras
Mexico
Nicaragua
Dominican Republic
Total
60
50
40
30
20
10
0
Bank Account (%)
No Bank Account (%)
Viviendas que reciben remesas en zonas rurales y
urbanas; y el ahorro del hogar
70.00%
16
60.00%
14
50.00%
12
10
40.00%
Urbana
Rural
30.00%
20.00%
Ahorros
8
6
4
10.00%
2
0.00%
México
El
Nicaragua
Salvador
R.D.
0
Mexico
El Salvador Nicaragua
R.D.
Dominican Republic remittance receiving
households: Income and years receiving
remittances
Less than 67
40
67 to 133
134 to 200
35
201 to 266
Over 266
30
25
20
15
10
5
0
Less than six
years
Seven to twelve Over twelve years
Percent cost of sending
remittance
4.07%
Ecuador
4.39%
El Salvador
4.99%
5.56%
Mexico
Honduras
5.76%
Guatemala
6.21%
Colombia
7.07%
Peru
8.06%
Jamaica
8.74%
Dom. Rep.
9.02%
Bolivia
9.57%
Haiti
9.73%
Nicaragua
13.54%
Venezuela
16.67%
Cuba
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
Integration into global economy with
development
i.
ii.
iii.
iv.
v.
Establish a state policy on diasporas
Reduction of transaction costs
Savings, credits and banking
Engage diasporas in trade and
tourism
Partner with HTAs
“The demand for financial services by remittance receiving households
rests on the intersection between the role of microfinance institutions, such
as credit unions, and rural sector development.”
Volume of Remittances Distributed by
62 Central American CUs in US$ Millions
$50.0
$41.2
$40.0
$24.0
$30.0
$20.0
$10.0
$0.0
$9.6
$1.2
$13.5
$17.1
$4.1
Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03
Budget allocation, HTA donations and population (mean
values)
Population
range
HTA
donation
(in dollars)
Ratio HTA and
Public works
budget
Population
in
Share of
3x1
projects
Commu
nity
Under 999
8,648
7.1
407
48.6
1,000 to 2999
11,999
0.5
1,686
21.0
3,000 to 4999
8,397
0.1
4,014
6.8
5,000 to 9,999
9,602
0.1
7,328
9.9
25,661
0
69,653
14
Over 10,000
Remittances Received in Mexico and Central America,
Projected 2002-2030
1980
1985
1990
1995
2000
2005
2010
$35,000,000,000
$30,000,000,000
$25,000,000,000
$20,000,000,000
$15,000,000,000
$10,000,000,000
$5,000,000,000
$0
Historic Remittances
Constant 1997-2001
5-Year Growth of 1995-2001
5-Year Growth of 1999-2001
2015
2020
2025
2030
Agriculture and Remittances
Dominican Republic: Agriculture and Remittances
25%
20%
15%
Rem/GNP
Agr/GNP
10%
5%
0%
1980
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1994
1995
1997
1998
1999
El Salvador: Agriculture and Remittances
40%
35%
30%
25%
20%
15%
10%
5%
ELSAGR
0%
1980
1985
1986
1987
1988
1989
1990
1991
1992
ELSREM
1993
1996
1997
1998
1999
Macro-economic issues of
remittances
Effects on import capacity and
foreign currency controls
Multiplying effects
Projections
Dominican Republic: exchange rate, remittances and
interest (lending) rate
210
30
29
190
28
27
170
26
150
25
24
130
23
22
110
FX
Remit Indx
21
Int. Lending Rate
90
Jan-00
Mar-00
May-00
Jul-00
Sep-00
Nov-00
Exchange
1-Jan
1-Mar
1-May
1-Jul
1-Sep
1-Nov
2-Jan
2-Mar
2-May
Jul. 2002
Sept.
2002
Nov.
2002
20
2-J
an
2-M
ar
2-M
a
Ju y
l. 2
00
Se 2
pt.
20
0
N 2
ov
. 20
02
1-J
ul
1-S
ep
1-N
ov
150
Rgrwth
Lending IR (right axis)
1-M
ar
1-M
ay
FX
1-J
an
170
Jul
-00
Se
p-0
0
N
ov
-00
Jan
-99
M
ar99
M
ay
-99
Ju
l-9
9
Se
p-9
9
N
ov
-99
Jan
-00
M
ar00
M
ay
-00
Jamaica: exchange rate, remittances and interest (lending) rate
250
29
230
27
210
190
25
23
21
130
19
110
17
90
15
Guatemala: exchange rate, remittances and interest
(lending) rate
600
22
500
21
20
400
19
300
18
200
17
16
Remittance Index
Interest Lending Rate (right axis)
15
Jan
-99
M
ar99
M
ay
-99
Ju
l-9
9
Se
p99
N
ov
-99
Jan
-00
M
ar00
M
ay
-00
Ju
l-0
0
Se
p00
N
ov
-00
0
FX
1-J
an
1-M
ar
1-M
ay
1-J
ul
1-S
ep
1-N
ov
2-J
an
2-M
ar
2-M
Ju ay
l. 2
Se 002
pt
.2
N 002
ov
.2
00
2
100
180
100
1-J
an
1-M
ar
1-M
ay
1-J
ul
1-S
ep
1-N
ov
2-J
an
2-M
ar
2-M
Au ay
g.
20
0
O 2
ct.
20
De 02
c.
20
02
Jan
-99
M
ar99
M
ay
-99
Ju
l-9
9
Se
p99
N
ov
-99
Jan
-00
M
ar00
M
ay
-00
Ju
l-0
0
Se
p00
N
ov
-00
Ecuador: exchange rate, remittances and interest
(lending) rate
16.5
170
16
160
15.5
150
15
140
14.5
130
14
120
13.5
110
FX
13
Remit Indx
ILR
90
12.5
12
1-J
ul
1-S
ep
1-N
ov
2-J
an
2-M
ar
2-M
ay
Jul
.2
002
Se
pt.
20
02
N
ov
.2
00
2
100
1-J
an
1-M
ar
1-M
ay
120
Jan
-00
M
ar00
M
ay
-00
Ju
l-0
0
Se
p-0
0
N
ov
-00
Jan
-99
M
ar99
M
ay
-99
Ju
l-9
9
Se
p-9
9
N
ov
-99
240
Mexico: exchange rate, remittances and interest
(lending) rate
220
200
140
FX
Remitt Index
ILR
45
40
35
30
180
25
160
20
15
10
5