Globalization and Migration: The Impact of Family Remittances in Latin America

This paper highlights the role of remittances in the migrant-sending countries of Latin America. It:

• Examines the roles of various actors that are involved in the transfer of remittances;
• Discusses the innovative means through which remittances are leveraged by participating institutions.

This report also identifies the players in the transfer of worker remittances:

• The sender;
• Money transfer intermediaries;
• The sender's household, governments;
• Hometown associations;
• The immigrant community.

The important points that the paper emphasizes are:

• The market for transferring remittances attracted new business and grew steadily during the 1990s;
• Migrant-sending governments and private actors entered the fray, selling bonds backed by remittances, channeling migrant returns into productive enterprise;
• U.S. immigrant Hometown Associations (HTAs) grew in number, in part though migrant-sending government outreach, and they pooled funds together for development projects.

Altogether, the paper concludes that:

• The trends have the potential to generate more economic development;
• Competitive markets lower transaction costs, and make more money available to migrant-sending communities;
• Innovative leveraging and the pooling of remittance money permits capital-intensive projects.

The paper observes that caution is called for because the bulk of remittances are still shared by families and used primarily for consumption. Accomplishing development goals may be difficult given the conflicts between the new institutional actors.