Migrant cash is world economic giant

[JODO 2]

Migrant cash is world economic giant

By WILLIAM J. KOLE, Associated Press Writer

16 minutes ago

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 $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 $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 told The Associated Press they have gotten a much clearer picture since the 9/11 attacks, 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 $276 billion in 2006, 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-Qaida and other groups are financed in part through informal money transfer networks called hawalas. Governments and the International Monetary Fund have been working to regulate those.

There are other downsides: fears of brain drains and a vast permanent army of economic exiles, and the untaxed earnings flowing out of host nations.

The U.S. lost $41.1 billion in 2005, according to the World Bank, while Switzerland watched $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 $62 billion last year and are projected to top $100 billion by 2010, the Inter-American Development Bank says. Mexicans wire home the most cash — nearly $22 billion — most of it earned in the U.S.

• India is the world leader in remittances, taking in $23.7 billion in 2005 and an estimated $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 $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.

"Without the money we get from our son, who lives and works in Austria, my family and I would simply starve to death," said Jovana Acimovic, a housewife struggling to make ends meet in Belgrade, Serbia.

In impoverished Tajikistan, the National Bank says migrant laborers sent home $1.1 billion last year — more than the country's GDP. Filipinos working overseas sent home a record $13.6 billion in 2005. So much cash is flowing that mobile phone operators make it possible to transfer money over a cell phone.

Maria Gorgan, a retired psychologist, left Romania two years ago for Spain, where she cares for Alzheimer's patients. She earns $1,800 a month — seven times her monthly Romanian pension, and enough to help her son make a down payment on a new house.

"We use the money I earn to support my family," said Gorgan, 56, who sends her husband a few hundred dollars each month. "I don't eat much. It's hard. But I have to do it."

In Albania, where the average monthly wage is only $250, a third of the population of 3.2 million have left for better jobs in the U.S., Britain, Greece, Italy and elsewhere.

Many have no plans to return. But some, underscoring a trend also emerging in other countries — Latvia and Mexico for example — are coming back to buy homes and open businesses.

Nearly one in three Albanian real estate transactions involves an expatriate buying property back home. "That means people see their future back in Albania," said Evis Ruci, who tracks remittances for the central bank.

Nazmi Ajazi, 52, spent a few years working in Greece and returned to set up an Internet cafe and a small grocery store on the dusty outskirts of Tirana, the capital.

"It feels so good to be back in Albania, where you can be your own master," his wife, Sofie, 50, said from behind a counter laden with eggs, oranges and freshly baked bread.

But some see drawbacks.

Much of the world's migration is illegal, and although many immigrants work at menial jobs, some are doctors, engineers and other professionals. Their departure can mean a brain drain of highly trained personnel and create an immigration culture.

"Migration creates more migration," said Ilir Gedeshi, director of the Center for Economic and Social Studies in Albania, whose emigrants have stashed an estimated $14 billion in foreign banks. "It's a cycle. The next generation has to leave because there are no jobs being created for them here."

Elvin Meka, secretary-general of the Albanian Association of Banks, offers a blunt warning: "We export human beings, and they send us cash," he said. "Young people are addicted to the idea of leaving. That's the biggest crime in this country. The government is killing their dreams."

In the former Soviet republic of Moldova, globalization has unleashed a troubling exodus.

More than 600,000 of its 4 million citizens are believed to be working abroad, and since Jan. 1, 900,000 have applied for citizenship in neighboring Romania. Though emigrants sent back $920 million in 2006, more than the entire national budget, the trend has some officials wondering how much of a country will be left to govern.

"If we don't create conditions for higher wages and new jobs, people will just continue to emigrate," said Sergiu Sainciuc, Moldova's deputy economy minister.

Others don't see a problem.

Mugur Stet, spokesman for Romania's central bank, denies that remittances — which hit $7.3 billion last year — are artificially propping up the ex-communist country's economy.

"We see new homes, new businesses," Stet said. "When they come back, it's with a capitalist mentality. These Romanians may turn out to be better citizens than those who stay home."

For Ismet and Safija Helja, retired in impoverished Bosnia, the cash their carpenter son, Nedzad, sends from America boils down to this: not having to eat at a soup kitchen.

Like clockwork, it arrives every three months. "Sometimes $1,000, sometimes $500, depending how good he does," said Ismet Helja, 67.

"If it wasn't for Nedzad's money," he said, "we would die."

___

AP correspondents Bradley S. Klapper in Switzerland, Dusan Stojanovic in Serbia, Corneliu Rusnac in Moldova, Lucia Stana-Seveanu in Romania and Samir Krilic in Bosnia contributed to this report.

___

On the Net:

World Bank: http://www.worldbank.org

International Monetary Fund: http://www.imf.org

International Office for Migration: http://www.iom.int Global remittances site: http://www.sendmoneyhome.org

[w¡n9Nµ7 §£@¥€r 123]

We've certainly done our part.

[Heracles 417]

The U.S. lost $41.1 billion in 2005

Just think of the number of jobs that would have been created, in the US, if this money had been left and utilized in the US.. We are talking hundreds of thousands of jobs. People cannot blame NAFTA or globalisation on this one..

Then again I have always been against any immigrants who go to a nation only to milk it and give back nothing.

Edited August 18, 2007 by Boo-Yah!

[peejay 327]

The U.S. lost $41.1 billion in 2005

Then again I have always been against any immigrants who go to a nation only to milk it and give back nothing.

Whored out and gutted. Welcome to the new America. No...this isn't your grandparent's immigration.

Not when half the immigration into America is illegal.

The corporations aren't any better. They have no loyalty to this country other than its ability to fill its coffers with $$$.

Yup...whored out and gutted...that sez it all.

[Dan J 277]

The U.S. lost $41.1 billion in 2005

Just think of the number of jobs that would have been created, in the US, if this money had been left and utilized in the US.. We are talking hundreds of thousands of jobs. People cannot blame NAFTA or globalisation on this one..

Then again I have always been against any immigrants who go to a nation only to milk it and give back nothing.

Problem, there isn't enough workers for all those jobs.

But really, at least the money is mostly going to help poor and disadvantaged people around the world. We have spend 400 billion in Iraq, and what good has that done?

[mendeleev 69]

I do my part, too, and I'm a native born US citizen who, by quirk of fate, has a lot of family abroad.

[Mr. Big Dog 10,747]

We send money overseas. Neither of our families are particularly well off while we happen to do pretty well for ourselves. So, we slip our folks some cash from time to time. As for my folks, it's mostly the airfares if they want to come visit (it's cheaper and easier to fly them in than for us to head over there). For Nani, we like to help her family out particularly on special occasions so that they can enjoy holidays and whatnot. That's what family is all about, isn't it? To help each other out whichever way we can. As for the remark of people coming here just to milk the nation: What a load of ignorant BS. We help our families overseas with funds that have been fully earned and taxed. Ain't nobody's fcuking business how we spend our disposable income.

[rebeccajo 14]

But really, at least the money is mostly going to help poor and disadvantaged people around the world. We have spend 400 billion in Iraq, and what good has that done?

Amen to that.

[Heracles 417]

We send money overseas. Neither of our families are particularly well off while we happen to do pretty well for ourselves. So, we slip our folks some cash from time to time. As for my folks, it's mostly the airfares if they want to come visit (it's cheaper and easier to fly them in than for us to head over there). For Nani, we like to help her family out particularly on special occasions so that they can enjoy holidays and whatnot. That's what family is all about, isn't it? To help each other out whichever way we can. As for the remark of people coming here just to milk the nation: What a load of ignorant BS. We help our families overseas with funds that have been fully earned and taxed. Ain't nobody's fcuking business how we spend our disposable income.

America is not the world's piggy bank nor should it be. I was referring to people who solely come here to work and hardly ever spend anything or contribute, financially, back to the society. yes the same society that is providing them with a 'job'..

Basic economics 101.

$41,000,000,000 being spent overseas equates to thousand of lost jobs in the US. Simple as that..

Edited August 19, 2007 by Boo-Yah!

[mawilson 2,133]

Tax them to get a piece of the $276 billion pie!

[Heracles 417]

Tax them to get a piece of the $276 billion pie!

I think that is reasonable.. With a $3K annual tax free limit..

[mawilson 2,133]

Tax them to get a piece of the $276 billion pie!

I think that is reasonable.. With a $3K annual tax free limit..

No tax free limit - always fully taxable. If the money has already been taxed, then you

get the remittance tax back when you file your tax return. This way citizens and legal

residents won't be affected.

[rebeccajo 14]

We send money overseas. Neither of our families are particularly well off while we happen to do pretty well for ourselves. So, we slip our folks some cash from time to time. As for my folks, it's mostly the airfares if they want to come visit (it's cheaper and easier to fly them in than for us to head over there). For Nani, we like to help her family out particularly on special occasions so that they can enjoy holidays and whatnot. That's what family is all about, isn't it? To help each other out whichever way we can. As for the remark of people coming here just to milk the nation: What a load of ignorant BS. We help our families overseas with funds that have been fully earned and taxed. Ain't nobody's fcuking business how we spend our disposable income.

America is not the world's piggy bank nor should it be. I was referring to people who solely come here to work and hardly ever spend anything or contribute, financially, back to the society. yes the same society that is providing them with a 'job'..

Basic economics 101.

$41,000,000,000 being spent overseas equates to thousand of lost jobs in the US. Simple as that..

I doubt people are coming over here, working, and hardly spending any of their wages. Unless they are living in a cardboard box on the street and eating at soup kitchens.

The subject article indicates that the amount sent home by one son 'depends on how good he does' each month. Sounds like that guy is sending home what he has left over after his expense, which were paid out of a wage that has already been taxed.

[Heracles 417]

I doubt people are coming over here, working, and hardly spending any of their wages. Unless they are living in a cardboard box on the street and eating at soup kitchens.

The subject article indicates that the amount sent home by one son 'depends on how good he does' each month. Sounds like that guy is sending home what he has left over after his expense, which were paid out of a wage that has already been taxed.

Spending on basics is not what grows an economy. I am talking about entertainment, dining out, shopping etc.. I don't have a problem with someone sending money back home or helping out others but I do not agree with people whose sole purpose of moving to a nation is for economic gain. Frugalness and shipping money overseas does nothing for a nation..

[rebeccajo 14]

I doubt people are coming over here, working, and hardly spending any of their wages. Unless they are living in a cardboard box on the street and eating at soup kitchens.

The subject article indicates that the amount sent home by one son 'depends on how good he does' each month. Sounds like that guy is sending home what he has left over after his expense, which were paid out of a wage that has already been taxed.

Spending on basics is not what grows an economy. I am talking about entertainment, dining out, shopping etc.. I don't have a problem with someone sending money back home or helping out others but I do not agree with people whose sole purpose of moving to a nation is for economic gain. Frugalness and shipping money overseas does nothing for a nation..

Neither does spending on entertainment, dining out, shopping, etc. That creates false economic numbers. All one has to do is look at the beginning of the current recession to witness the phenomena. The current mortgage crisis is the result of counting on the consumer to prop up the economy by spending themselves silly.

Real economic growth comes from the investment of business into itself and on new enterprises. When that happens, their will be more jobs available than there will be native born Americans to fill them.