Money: Now Flowing in Reverse

It's an age-old story: immigrants arrive in the US hopeful they can make a better life for themselves. And most also hope they can send some money back to make life a bit easier for the family they left behind. The money they send back is called a "remittance." But recently there's evidence that we may be seeing that money flowing in reverse! Is the family back home now trying to help their unemployed loved ones?

Actually the director of a rural micro-banking system that serves indigenous communities in southern Mexico is reporting exactly that trend. Martin Zuvire, director of the Mexican Association of Social Sector Credit Unions (AMUCSS), told the Mexican press that migrants' relatives are sending between $200 and $400 a month north. Zuvire didn't reveal total amounts but said the money outflow has increased over the last four months. Rural communities, he said, face a double crisis: Mexican migrants are out of work both in Mexican cities and in the United States.

These reports of "reverse remittances" come just when the money flow from the US migrants to Mexico has fallen to its lowest level since 1996. The central Bank of Mexico reported last month that remittances fell over 12% during the first eight months of 2009 compared to January-August 2008. In August 2009 the average remittance in Mexico was $310. That is down from the August 2008 average of $343.

Many blame the remittance downturn to a collapse in the US construction industry, a field that had employed 18 of every 100 Mexicans working in this country before the economic crisis.

How significant is the remittance money to Mexico? Despite the recent dive, 2009 remittance revenues are still expected to come close to equaling the income from Mexican petroleum exports. For the first eight months of 2009, oil exports brought in about $15.4 billion to Mexico's coffers, while remittances accounted for almost $14.7 billion.

"Follow the money!" was the famed Watergate informant Deep Throat's advice to Bob WoodwardBob Woodward. But if you want to follow remittance money, normally an important source of Mexican income, it looks like you might have to turn around and go back in the opposite direction.
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Source: Frontera NorteSur (FNS) 10/5/2009: on-line, U.S.-Mexico border news, Center for Latin American and Border Studies, New Mexico State University, Las Cruces, New Mexico