Remittances: What the Beautiful People See and What Actually Happens

By David North on October 15, 2015

When you go to a conference run by the World Bank or the International Monetary Fund or similar entities, you run into lots of beautiful people on the institution's staff.

They are the elite from all over the world; slim, well-tailored, well-educated, well-spoken in several languages, self-confident, and much better looking than your average subway car or bus full of people. I cannot put myself in their shoes, but I can envy them, particularly on the grounds of their linguistic skills and the fact that they do not pay American income taxes on their quite adequate salaries. (There are even special nonimmigrant visa classes for those that live in America, for their families, and for their servants, G-1 through G-5.)

Think Christine Lagarde, now head of the International Monetary Fund, one-time student at a classy American prep school, and later France's Finance Minister; or Tim Geithner, the Ivy League grad who spent most of his childhood overseas and who worked at the IMF before becoming secretary of the Treasury.

If the subject is the flow of moneys sent home by workers from the Third World, now employed in the First World, you will find the beautiful people very interested in some aspects of the subject, and certain that these remittances are good for the nations from which the migrants come.

Their publications on this subject are as sleek as they are. Take, for instance the recent document from the Inter-American Development Bank entitled "Remittances to Latin America and the Caribbean Set a New High in 2014". The graphics, the use of color, and the layout are most attractive.

The substance is all about the flows of remittances and how various factors have influenced those flows. Total remittances to Latin America and the Caribbean are shown to be $65.4 billion in 2014, up $3.3 billion from 2013. The totals going to the Caribbean and South America were about the same as the prior year, but up noticeably for Mexico and Central America. Although these remittances are largely in U.S. dollars, it is a Mexican bank note and a Euro that grace the report's cover.

The document, and this is typical, does not even mention the negative impact on the source of those remittances: Had some of those billions stayed in the United States, for instance, it would have been very helpful to the American economy. Nor does it mention how those remittances are used in the receiving countries.

How remittances are actually used is a pretty obscure topic, but I do recall having a conversation on the subject with another migration groupie in Geneva, Switzerland, some 30 years ago. He said something to the effect that one of the byproducts of remittances to the Indian Subcontinent was that bride prices had increased, and as for the Balkans, guestworkers who were leery of banks had started construction of many houses, but had not finished them as they had run out of money. I forgot that conversation until 10 years later when my wife any I were on a bus trip through southern Albania and I saw dozens upon dozens of such half-structures.

Maybe we should get some of the beautiful people engaged in a program that would teach and encourage the wiser uses of the remittances.

Topics: Remittances