Reverse Remittances

Money sent to help immigrants struggling in rich countries (such as the U.S.) by friends and family in less-developed countries (such as Mexico).

Reporting from Miahuatlán, Mexico, The Times’s Marc Lacey revealed:

Unemployment has hit migrant communities in the United States so hard that a startling new phenomenon has been detected: instead of receiving remittances from relatives in the richest country on earth, some down-and-out Mexican families are scraping together what they can to support their unemployed loved ones in the United States. …

Statistics measuring the extent of what experts are calling reverse remittances are hard to come by. But interviews in Mexico with government officials, money-transfer operators, immigration experts and relatives of out-of-work migrants show that a transaction that was rarely noticed before appears to be on the rise.

According to Lacey, one bank in Chiapas said that it was transferring more money to the United States than it was receiving – roughly 50,000 pesos a month, compared with 30,000 pesos received. However, Lacey noted:

The flow of money out of Mexico is believed to be a tiny fraction of the remittances still arriving. “The evidence in this regard so far is anecdotal,” said Juan Luis Ordaz, senior economist at the Spanish bank BBVA Bancomer, who has begun investigating the reverse money flow.

In June 2009, the BBC quoted a World Bank economist, Dilip Ratha, who stressed that reverse remittance figures were still low: “The numbers we’ve seen are more in the range of $1bn, so compare that with remittance flows of $50-60bn that go to Latin America on a yearly basis, from the US.”