Migration and development: integration to the global economy and policy opportunities for donors

1. Migration and development: integration to the global economy and policy opportunities for donors Manuel Orozco Inter-American Dialogue, Washington, DC

2. Dinamycs of migrant transnacionalism “heightened competition among and within regions, mediated by such micropatterns as ethnic and family networks, accelerates cross-flows of migrants” James Mittleman

3. 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- BILATERAL & MULTILATERAL -PRIVATE DONATIONS FOUNDATIONS, PPOs, HTAs -WORKER REMITTANCES

4. Diasporas and Transnationalism

5. Source: NMTA

7. Quarterly flows to selected Latin American countries

8. Phone calls from the U.S. Fuente: "2000 International Telecommunications Data," December 2001, Federal Communications Commission

9. Flights from the United States Fuente: "International Aviation Development Series," U.S. Department of Transportation

10. The New Economies of Latin America: Betting on the Diaspora

11. Agriculture and Remittances

12. The reality of transnational families Is poverty out of the picture with transnational migration?

13. Remittance Sender • 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%)

14. Personal Income and Years living in U.S.

15. Immigrants and bank accounts

16. Annual Per capita Remittances and GDP

17. Viviendas que reciben remesas en zonas rurales y urbanas; y el ahorro del hogar

18. Dominican Republic remittance receiving households: Income and years receiving remittances

19. Percent cost of sending remittance

20. Remittances as Institutions of Development

21. Opportunities for development • Reduce Costs • Savings, Credit and Banking • Link with hometown associations • Promote nostalgic markets and tourism • Create institutional ties with the diaspora • Link remittances and technology

22. Strategy 1: Reduction in transfer costs • Promotion strategic alliances between remittance agencies and banks, such as VISA with Quiqeyana, Banco Cuscatlan, Banco Uno y Gigante Express in Central America and the Dominican Republic • Strategic agreements between banks in the country of residence and the country of origin • Bank of America, Citibank (C2iT), etc. • Software Platforms for banks: Mastrex International • ATMs and MAC: Mitchell’s Bank • Alliances among US and Latin American credit unions, such as IRNet

23. Strategy II: Savings, Credit and Remittances • Monitoring transfers, especially the exchange rate • Motivate savings and credit institutions to attract remittance senders and recipients • Bring low cost banking centers where there is a high concentration of families who receive remittances • Offer incentives to households that receive remittances; • Allow micro-finance and credit unions to become agents of remittances and savings institutions

24. “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.”

25. Mexico: Remittances to rural households 15% recibe US$250 al mes, siete veces al año.

26. Strategy IIb: Remittances and Technology • Wireless internet accessibility, Wi-Fi (Wireless Fidelity) offers the opportunity to integrate the rural sector using computer equipment at a low cost • Computers with Wi-Fi send and receive information using radio waves • This system could be used to send remittances • This technology could be administered by local micro-finance institutions • This system also could offer advantages to local businesses as to generate investment (such as a discount of half or a third of the actual price of a phone call) and simultaneously an opportunity for new markets

27. Strategy III: Alliances with Home Town Associations • Seek communication and dialogue with HTAs; • Social development • Donor technical assistance for project identification; • Support of a transnational community radio; • Donor support on governance and democratic participation; • Donor partnerships in social (health and education) and infrastructural projects • Economic development • Government incentives to attract private sector involvement; • Government support in investment feasibility analysis; • Financial infrastructure • Support education on financial services; • Support to link technology to education, communication and remittances in the rural areas.

28. Strategy IV: Expansion of Financial Investment

29. Strategy IVa: Promotion of the nostalgic market • Risk and investment analysis • Build partnerships between the private sector and the immigrant community; • Financing small investment projects within rural sectors • Involve home town associations and NGOs with strategies to invest

30. Strategy IVb: Tourism and Migration • Establish travel packages to traditional places • Establish new and innovative products for tourists • Create new investment strategies to promote tourism

31. Strategy V: Connecting the external community with assistance • Adopt linking with the diaspora as part of the country’s foreign policy. Use the consulates as points of contact. • Forge mutual confidence: • Support their activities carried out as an organized group • Establish ties through meetings and conferences; • Help in the creation of a diaspora agenda; • Carry out services demanded by the community; • Implement summer camps programs • Create an office of attention to nationals linving abroad • Unit of community contact • Unit linking the state and the community • Unit of study and analysis

32. Promoting development through remittances and migration

33. Articulando el vínculo entre el desarrollo y la migración Visión regional e integral

34. Actividades financieras de los inmigrantes en país de origen

35. Ayuda a familia a cumplir con obligaciones económicas además del envío de remesas (préstamos inmobiliarios)

36. Rango de Actividades y Vínculos que se pueden establecer entre el Gobierno y su Diáspora

37. Macro-economic issues of remittances Effects on import capacity and foreign currency controls Multiplying effects Projections

38. Dominican Republic: exchange rate, remittances and interest (lending) rate

39. Jamaica: exchange rate, remittances and interest (lending) rate

40. Guatemala: exchange rate, remittances and interest (lending) rate

41. Ecuador: exchange rate, remittances and interest (lending) rate

42. Mexico: exchange rate, remittances and interest (lending) rate