Mexico’s remittances sent home by migrants to their relatives, have been soaring in the past two years and are expected to surpass almost all other sources of the country’s foreign income. They are expected to exceed $50 billion for the first time once 2021’s figures are added up.
But as happy as the Mexican government is about the news – it calls the migrants “heroes” – the boom raises questions: Will Mexicans always have to emigrate? And is it sustainable, or just a blip fueled in part by the United States’ government pandemic support payments?
In many rural places such as Comachuen, Michoacan, every store, business and family depend on remittances.
“Without these remittances that migrants send back to their families here in Comachuen, the town would have no life,” said Porfirio Gabriel, who has spent nearly 13 years working on farms in the U.S. and now recruits and supervises people to go north.
Remittances as a percentage of Mexico’s gross domestic product (GDP) have almost doubled over the past decade, growing from 2% of GDP in 2010 to 3.8% in 2020, according to the government. Between 2010 and 2020, the percentage of households in Mexico receiving remittances grew from 3.6% to 5.1%.
For the first 11 months of 2021, remittances grew by almost 27%. Mexico is now the third-largest receiver of remittances in the world, behind only India and China, and Mexico now accounts for about 6.1% of world remittances, according to a government report.
On one hand, the spike was simply a matter of need, caused in part by the coronavirus pandemic. Mexico’s GDP shrank 8.5% in 2020, and while the economy recouped about 4.7% of that loss in the first three quarters of 2021, growth appears to have slowed and inflation spiked in the last quarter.
“When a Mexican family suffers illness or their household suffers damage, they receive more. … Why? Because, basically, they ask for help, and that is what I think happened here last year,” said Agustin Escobar, a professor at Mexico’s Center for Research and Higher Education in Social Anthropology.
Ironically, part of that growth may have been fueled by a temporary decrease several years ago in the number of new Mexican migrants heading to the United States and a decline in the relative percentage of migrants without proper documents. -Agencies
