MIF and Pew Hispanic Center Release Report on Remittances to Latin America and the Caribbean
Inter-American Development Bank

Across the United States, some six million immigrants from Latin America now send money to their families back home on a regular basis. The total remittance flow from the United States to Latin America and the Caribbean could come close to $30 billion this year, making it by far the largest single remittance channel in the world, according to a study released today by the Pew Hispanic Center and the Multilateral Investment Fund of the Inter-American Development Bank.

These funds now reach large portions of the populations in the region?18 percent of all adults in Mexico and 28 percent in El Salvador are remittance receivers?and the impact is no longer limited to the countryside or to the poor. Taken altogether these indicators suggest that the remittance traffic in the Western Hemisphere has crossed a threshold not only in magnitude but also in significance.

"These remittances are the expression of profound emotional bonds between those separated by a border," said Roberto Suro, director of the Pew Hispanic Center. "They also represent a new kind of integration among nations undertaken not by trade negotiators but by ordinary folk to assuage their economic woes."

Multilateral Investment Fund Manager Donald F. Terry noted that remittances are due to surpass foreign direct investment as a source of capital for Latin America and the Caribbean in 2003. "The total aggregate of remittances to Latin America and the Caribbean during this decade is conservatively projected to reach more than $450 billion, even taking half the current growth rate. The numbers are staggering under any scenario," Terry said.

In addition to showing a significant increase in remittances, the report also said that in Mexico, 19 percent of all adults?some 13.5 million people?said they were thinking of migrating to the United States. Mexicans receiving remittances from abroad were much more likely to want to emigrate than those who are not. The remittance channel seems likely to influence future migration to the United States.

Among the key finding of the study:

• Wire transfer companies such as Western Union or Money Gram remain by far the most common means of dispatching remittances with 70 percent of senders reporting that they use such firms. Banks are used by 11 percent and 17 percent of senders use informal means such as the mail or individuals who carry the funds by hand.

• Broad sectors of the adult populations in all the nations studied are receiving remittances: 14 percent in Ecuador, 23 percent in Central America and 18 percent in Mexico.
• Remittance flows were largely unaffected by the U.S. economic downturn of 2001-2002. In every country except El Salvador, more than half of the recipients reported that they had started getting money from relatives abroad over the past three years.

• While in other countries remittance receipts are still concentrated in the lower rungs of the socio-economic ladder, in Mexico remittances are flowing to all sectors of Mexican society and to virtually every region. Most significantly, in Mexico there were no statistically significant differences between remittance receivers and the general population in age, educational profile or income distribution.

• The one characteristic that clearly distinguishes remittance receivers from the general population in all the countries studied is that a majority are women.

The Pew Hispanic Center (PHC) and the Multilateral Investment Fund of the Inter-American Development Bank (MIF) conducted a series of studies in 2003 that collected information on remittance sending and receiving from some 12,000 individuals in the United States and Latin America. This research draws on data from two separate projects: The 2003 National Survey of Latinos conducted by the PHC and the Kaiser Family Foundation in the United States, and a series of surveys and focus groups conducted by the MIF and the PHC in Mexico, El Salvador, Guatemala, Honduras and Ecuador with fieldwork performed by Bendixen and Associates.

In coming months, the Pew Hispanic Center expects to release additional reports presenting a range of information on the diverse Hispanic population in the United States and Latinos' growing impact on the nation. On December 16, PHC and the Kaiser Family Foundation will release major findings from the 2003 National Survey of Latinos. The report will examine Hispanics' opinions on a wide range of education issues and their experiences with U.S. schools.

The Pew Hispanic Center, a non-partisan research organization, is a project of the USC Annenberg School for Communication and is supported by The Pew Charitable Trusts.

The Multilateral Investment Fund, an autonomous fund administered by the IDB, helps finance private sector development projects in Latin America and the Caribbean. Among other activities, MIF finances programs to cut the costs of remittances by fostering competition among service providers.

To see the Spanish version, click here.

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