Americas Quarterly - Spring 2009

Here Corporate Social Responsibility

ThGueilR leremmo ittanWceeHGoleAgaMinarcReliocaMrd.oSuHáarueszm-Oarnonz- Ortiz, president co of the Bank of

Mexico. The bank reported a 3. 6 percent decline in remittances in 2008.

relatives at home while the tri-state area of Vir-struggling to survive ginia, Washington DC and economically themselves. Maryland, says that the Ricardo Juarez, volunteer U.S. economic downturn coordinator of Mexicanos has hit hard. “On an aver- Sin Fronteras (MSF), a net- age day I get numerous work of community-based phone calls from immi-organizations located in grants calling the MSF

emergency number asking hasn’t, so far, dented the
for $10 to $20, so that they optimism of Mexican
can afford the bare essen- immigrants working in
tials,” says Juarez, who the U.S., Juarez observes.
was part of the 1990s wave Although fewer job-
of Mexican workers drawn seekers are arriving, “very
to the area by a construc- few people are returning
tion boom. ” They are no to Mexico,” he says, add-
longer able to find jobs in ing: “Most are choosing
construction, or employers to stay even though they
have withheld wages.” may go days or weeks
If immigrants are without a job.”
barely surviving, send- In January, Juarez
ing remittances becomes was among a handful
a challenge. Although of immigrant leaders
Juarez continues to work invited to a meeting
full time in construction, with President Barack
the tightening economy Obama’s transition team.
has forced him to be pru- Obama’s election, reports
dent. He now sends home Juarez, has given many
to his mother less than immigrants a reason to
half what he sent a few stay. “They are hopeful
years ago. that better times are on
The belt-tightening the horizon,” he says.

flows. Through decreased migration (documented and undocumented)—though probably only temporary— and less disposable income, fewer dollars will be flowing over the next few years to poor communities south of the border. What this may mean is an increase in school drop-out rates, as families are no longer able to afford keeping their children in school. Reducing education even by just one or two years will have serious long-term implications for development.

LUIS ACOSTA/AFP/Ge TTy ImAGeS

The factors that fuel mass migration, ranging from efficient transnational labor recruiting networks to low wages and lack of work at home, will continue to make it an attractive alternative for millions of people. At the same time, there are powerful demographic forces reshaping labor market needs in many, if not most, high-income countries. United Nations Population Division data suggest that transnational migration will remain important for the future labor

needs of high-income countries. But in the short term the effects on incomes of sending communities and long-term development could be profound.

We will continue to see Mexicans in the United States, Brazilians in Japan, Bolivians in Argentina, and Peruvians in Chile. But that doesn’t reduce the challenge that policymakers now face—particularly in the originating countries. The short-term shock brought by the decline in remittances will almost certainly compound the effects of the economic crisis across the Americas. Governments as well as international financial institutions will need to act quickly to plug the holes. The future health and education of millions of people back home who have depended on these sources of income, as well as the political stability of their communities, is at stake.