Latino immigrants to the United States will send about US$30 billion this year in small amounts to relatives in Latin America and the Caribbean. That is 23% more than the US$23 billion sent in 2001.
This information comes from a survey completed by the Inter-American Development Bank.
The impact of sending money home to family is huge. To put it in perspective, the amount sent back home in 2003 to El Salvador by immigrants constituted over 15% of the entire GDP of that country. The Inter-American Bank says that immigrants’ remittances vastly surpass the foreign aid provided by developed nations.
A piece by Ernie Garcia in The Journal.com credits an Inter-American Bank official as saying “the volume of money flowing to Latin America and the Caribbean could transform countries the way Spain and Portugal were lifted from poverty in the 1960s, when millions of citizens from those countries moved to northern Europe to work and send money home.”
And what do these immigrants eventually do? According to one immigrant interviewed for the article, he plans to return to the Dominican Republic with his grubstake and start… a small business.
UPDATE August 21: Dragos, over at the excellent Romanian business blog @rgumente, points out here and here that 700,000 Romanians working abroad will send EUR3.2 billion back home in 2004. These amounts constitute approximately 6% of the Romanian GDP of EUR51 billion (US$62 billion using today’s exchange rate). I’m sure other countries out there are experiencing similar economic benefit from workers abroad. It’s an increasingly global world, isn’t it?