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Mon, Aug 20, 2007 - Page 11 News List

FEATURE: Migrants fueling economies back home


Mercedes-Benz cars are seen in the streets of the Albanian capital Tirana on April 20. Albanian immigrants will send more than US$1.3 billion to their families back home this year, the equivalent of 13 percent of the nation's GDP.


Josif Poro pats his new sofa, points with pride to his carpets and runs a wrinkled hand over a gleaming white refrigerator.

He and his wife barely scrape by on their US$220 monthly pension. They'd have to do without many of the items in their cramped apartment if their son, a factory worker in Greece, didn't faithfully send home part of his earnings.

"We call him our golden boy," said Poro, 83, a retired textile mill worker.

Around the world, millions of immigrants are sending billions of dollars back home.

One sweaty wad of bills or US$200 Western Union moneygram at a time, they form what could be called Immigration, Inc -- one of the biggest businesses on the planet.

Experts tracking the phenomenon said they have gotten a much clearer picture since the Sept. 11 attacks in the US, when authorities trying to cut the flow of cash to jihadists began taking a harder look at how immigrants move their money around.


Mass migration, they say, has spawned an underground economy of staggering proportions.

Globally, remittances -- the cash that immigrants send home -- totaled nearly US$276 billion last year, the World Bank says. Remittances have more than doubled since 2000, and with globalization increasing the numbers of people on the move, there's no end in sight.

If these guest workers incorporated as a company, their migrant multinational would rank No. 3 on the Fortune 500 list, trailing only Wal-Mart and Exxon Mobil in annual revenue.

Remittances "are larger than direct foreign investment in Mexico, tea exports in Sri Lanka, tourism revenue in Morocco, and revenue from the Suez Canal in Egypt," World Bank economist Dilip Ratha said in a recent report.

And unlike the conventional economy, more cash tends to change hands in an economic downturn, political crisis, natural disaster, famine or war.

Counterterrorism officials say al-Qaeda and other groups are financed in part through informal money transfer networks called hawala. Governments and the IMF have been working to regulate those.

There are other downsides: There are fears of brain drains, a vast permanent army of economic exiles and the untaxed earnings flowing out of host nations. The US lost $41.1 billion in 2005, the World Bank said, while Switzerland watched US$13.2 billion trickle out of the country that year.

But Giuseppina Iampietro, a Swiss Economics Ministry spokeswoman, says little can be done: "Immigrants have no obligation to invest their money in Switzerland."

Meanwhile, from Poland to the Philippines, remittances are throwing lifelines to families combating poverty and helping to keep some national economies afloat.

Across Latin America, remittances hit US$62 billion last year and are projected to top US$100 billion by 2010, the Inter-American Development Bank says. Mexicans wire home the most cash -- nearly US$22 billion -- most of it earned in the US.


India is the world leader in remittances, taking in US$23.7 billion in 2005 and an estimated US$26.9 billion last year, the World Bank says. Western Union, traditionally one of the most frequently tapped money transfer companies, says its share of Indian transactions has grown at least 90 percent over each of the past six quarters.

Immigrants from Albania, one of Europe's poorest countries, will send more than US$1.3 billion back to their homeland this year. That's 13 percent of Albania's GDP and enough to finance half the trade deficit.

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