Losing Remittances Is Real Source of Mexico's Angst with Trump's Immigration Policy

By Joseph J. Kolb on February 15, 2017

Last week more than 20,000 demonstrators took to the streets of Mexico City to protest the roll-out of President Donald Trump's immigration enforcement effort. A likely Mexican presidential candidate took to the streets of Los Angeles, home to the largest illegal-immigrant population in the country, advocating for his countrymen's rights to stay in the United States. Even the Mexican government chimed in, vowing to spend millions of dollars to bolster its consulates to intentionally clog the American immigration court system.

This latter act of international intrusion in another country's functioning is Mexico's way of obfuscating that its reaction to Trump's promised immigration enforcement policy, which has already netted more than 600 criminal aliens, is not about altruism or solidarity with their countrymen who made the trek north; it's about the lucrative remittance stream that could dwindle and have a significant impact on the Mexican economy.

In 2016, remittances to Mexico topped an all-time high, with $26.97 billion being sent back home from Mexicans, many living in the United States illegally and enjoying American largesse and free or low-cost social, educational, and healthcare services. In November alone, this figure reached $2.4 billion, as the writing on the wall became more vivid that Trump was going to be the new president.

According to a Fox News report, remittances are now the number two source of Mexico's flattening gross domestic product (GDP), behind automotive exports, and GDP growth of is hovering below 1 percent. According to the World Bank, in 2015, remittances accounted for 2.3 percent of Mexico's GDP. An estimated 20 percent of Mexican residents regularly receive remittances from family and friends, mostly living and working in the United States. With 52.3 percent of Mexicans living below the poverty level, losing remittances can be devastating.

Mexico's officials are apoplectic over the prospect of losing even a small percentage of this cash cow through Trump's immigration policies. The remittance infusion has surpassed Mexico's oil revenues, which were at $23.4 billion in 2015 and account for 20 percent of the government's revenue. Tourism continues to flounder ($4.5 billion in 2016) because of the surging violence, especially in resort communities such as Cancun and Acapulco.

"We must assure the free flow of remittances," Mexican President Enrique Pena Nieto said in January. Remittances are "an invaluable contribution to national development and indispensable for millions of Mexican families."

Given Trump's temperament, the last thing Mexico should be doing under these circumstances of enforcing U.S. law, which millions of its countrymen have intentionally broken, is to be an antagonist. For generations Mexico has tacitly supported illegal immigration to the United States for its own financial gain. Mexico is unable to protect and support its own people because of institutional corruption, and the poverty and murder rates bear this out. Mexico's ostensible support for its immigrants in the United States is exploitative. If they truly cared about their people, Mexico would take the millions it is going to spend fighting Trump and use it for job development, education, and security, all of which immigrants left for in the first place.