Immigrants’ Cash Floods Homelands

Remittances that migrants send back home to help their families, have long formed a crucial component of developing countries' income. In El Salvador, for example, remittances total 14% of the country's gross domestic product. Money-transferring technologies have only made this process easier and kept the payments regular. Now a study of Latin American immigrants to the US – legal and illegal alike – has found that these remittance levels are far greater than originally thought. Nearly 30 billion dollars annually passes south of the US in small cash transfers; this total is far greater than the official aid given by the US to the same countries. Though the remittances have arguably formed the basis for much of Latin American development, it is a troubling reminder that the burden of aid is falling onto the poorest strata of American society, who may need the money for their immediate needs, rather than sending it for distribution to the larger population. Moreover, some suggest that high remittance levels have kept immigrants from fully investing in their new society and thus have kept them from achieving the economic prosperity accomplished by Cuban immigrants – who are not allowed to send money home. The difficulty of measuring small cash flows across the borders has partially obscured the overall volume of this international financial transfer, but the importance of these exchanges should not be underestimated. – YaleGlobal