In the context of the 76th regular session of the United Nations General Assembly, the Secretary of Foreign Affairs, Marcelo Ebrard, presented yesterday before his counterparts from Belize, Costa Rica, Guatemala, Honduras, El Salvador, the United States and Panama the Mexican government's proposal for international cooperation to address the challenges in the area of migration at the regional level, with emphasis on cash transfer programs.
Ebrard emphasized the importance of implementing a coordinated response, accompanied by multilateral organizations, in order to organize migratory movements and safeguard the rights of people in transit. In this regard, the Foreign Minister stated that the defense of migrants' rights must be approached from a regional cooperation perspective, informed the Ministry of Foreign Affairs (SRE).
He underscored the humanitarian support offered to the Haitian people through the Mexican Agency for International Development Cooperation. In this regard, he called on the participants in the meeting to coordinate and strengthen humanitarian assistance measures for Haiti.
The head of the North America Unit, Roberto Velasco, presented a document with empirical evidence on the effectiveness of the resource transfer programs promoted by the Mexican government in the region to address the root causes of migration. The Mexican proposal found agreement at the table, particularly with Samanta Power, Administrator of the United States Agency for International Development (USAID).
The US Secretary of State, Anthony Blinken, pointed out that the United States gives priority to the fight against corruption and impunity, and called for strengthening democratic institutions and the rule of law, which will open more doors to foreign investment and generate more economic opportunities for the peoples of the region, according to information released by the US embassy.
The meeting was attended by Eamon Courtenay, Minister of Foreign Affairs of Belize; Rodolfo Solano Quirós, Minister of Foreign Affairs of Costa Rica; Pedro Brolo, of Guatemala; Lisandro Rosales Banegas, of Honduras; Erika Mouynes, of Panama, and a representative of the government of El Salvador.
Remittances reach the highest historical level in a six-month period
Family remittances closed the first half of the year at 23.618 billion dollars, the highest figure since there is a record for a similar period, the Bank of Mexico (BdeM) revealed on Monday. According to information from the central bank, the sum of foreign currency shipments was 22 percent higher than the 19 billion 289 million dollars registered in the first six months of 2020.
With regard to June 2021 alone, the remittances amounted to 4 billion 439 million dollars, an increase of 25 percent compared to the 3 billion 536 million reported in the same month last year. However, the flow in the sixth month of this year was 1.65 percent lower than that recorded last May, which was 4.514 billion dollars.
The amount of remittances in May 2021 is the highest for a single month since records have been kept, which is explained by the celebration of Mother's Day when migrants traditionally send more money.
Family remittances are resources that Mexican migrants living in other countries, mainly in the United States, send to Mexico. It is estimated that 1.7 million families receive this type of income. In 2020, this flow of foreign currency amounted to a little more than 40,600 million dollars and various specialists estimate that this year it will be between 48,000 and 50,000 million dollars, which will mean an increase of more than 20 percent.
Mexico is expected to receive 49 billion dollars in remittances in 2021, which is a record figure. Households receiving remittances in Mexico increased from 3.6% to 5.1% last year, according to data from the yearbook of migration and remittances Mexico 2021 prepared by BBVA and the National Population Council (Conapo).
Today there are 38.8 million Mexicans in the United States; 11.5 million of them were born in Mexico, there are 13.8 million second-generation Mexicans and 13.5 million third-generation Mexicans. In recent years the Mexican migrant population has been around 12 million inhabitants and there are reasons to believe that this number may increase in the following years.
Worldwide, Mexico is the third country that receives the most remittances, only surpassed by China and India. While the United States and Canada ($200,500 million dollars), the Arabian Peninsula ($129,700 million dollars) and Europe ($121,200 million dollars) are the main regions of origin of remittances. Michoacán, Guerrero, Oaxaca, Zacatecas and Nayarit were the entities that received the most remittances last year.
In Mexico, 99.4% of remittances are received through electronic means, which brings with it the challenge of making remittance recipients and senders more bankable. The use of digital media has generated a decrease in commissions paid for sending money. More than 20 years ago, the cost of sending a remittance was between 10% and 12% of the amount. Progressively it has decreased and now Latin America is one of the regions in the world where it is cheaper to send remittances.
Currently, Mexico charges between 5 and 6% commission for sending remittances; only in El Salvador and Ecuador, dollarized economies, is it cheaper to send remittances. The Bank of Mexico and the banks in the country have implemented a mechanism to pay between 2 and 5 dollars per remittance, but it implies that both parties (sender and receiver) are in possession of a bank account.
Mexico has a highly informal economy and this poses a challenge for banking usage, but remittance-receiving families, in particular, have lower levels of banking usage than the rest of the country.
Mexican migrants in the US also have low levels of banking access. Mexican banks in conjunction with the Ministry of Finance are working together to allow Mexican workers in the U.S. to open an account in a Mexican bank with only a consular registration. As regards remittance recipients, through basic accounts, it is possible to open an account free of commissions, in an effort to achieve totally free mobile accounts, as well as to discourage people from having to go to branches. As far as banking services are concerned, the federal government seeks to help in this area through the Banco de Bienestar (Welfare Bank).
After remittances surpassed oil and tourism revenues, Mexico has to work to recover revenues in the latter two areas. In the long term, it is important to increase income from tourism and employment generation, so that migration will be for pleasure and not out of necessity. Another challenge has to do with the issue of security, not only for Mexicans going to the United States but also for Central Americans passing through Mexico in search of the American dream.