“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.”

Migrants’ cash fueling underground economy
Times Argus
August 19, 2007

TIRANA, Albania ? 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.


1 Response to “Migrants' Cash Fueling World Wide Underground Economy”

  1. 1 the marlboro man

    Thats why everyone here is broke! Construction jobs/you must be bilingral in FL. or willing to work under the table for a lot less.Or your shit out of luck!!!!Hell ithink theres a spot in the welfare line/gotta gooooooo

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