Better than Foreign Aid


By Marcela Sanchez

Washington Post
January 2, 2004

In less than two weeks, the leaders of the 34 democracies in the Americas will meet in Mexico at a special summit to address one central question: How, as economies grow and wealth is created, can societies benefit as a whole? So far they have not. In fact, nearly one of every two people in Latin America and the Caribbean live in poverty today and one in five in extreme poverty. According to the World Bank, the richest one-tenth of the population receives 48 percent of all income and the poorest one-tenth gets only 1.6 percent.

The leaders will arrive in Monterrey with ambitious strategies for solving the great problem of wealth inequality. But the truth of the matter is that in one fascinating, unique and seemingly unstoppable way, wealth is being distributed right under their noses. And all leaders should be hard pressed to address the moral and fundamental dilemma that this fully functioning system now poses.

I am not talking about any far-reaching land reform program or micro-enterprise lending initiative. I am talking about remittances -- the billions of dollars sent every year by migrants in the United States and elsewhere to their families in Latin America. By last count, remittances totaled more than $32 billion annually -- an amount so great that it surpasses foreign aid, trade and investment for several countries in the region and now has a place on the short list of the leaders' top considerations for regional economic growth.

As an equalizing force, remittances work by placing money in the hands of those traditionally left out of economic gains. They are helping transform communities in remote and neglected areas with cash for the kind of development that governments and politicians have rarely delivered. Remittances also challenge the high-minded suppositions of regional leaders. They offer the most powerful argument against those, such as Venezuela's President Hugo Chavez, who will arrive at the summit declaring that governments must work to redistribute wealth through a new hemispheric social contract.

Indeed, for leaders such as President Bush, who promote equity through the creation of new opportunities, such talk of redistribution is a relic of a failed socialist ideology. If anything, remittances demonstrate that government involvement is practically unnecessary. After years of empty promises from corrupt or ineffective governments, regional leaders find themselves playing at most a supportive role by trying to lower the cost of sending the cash and, in some cases, matching funds for immigrant-motivated local development projects such as schools or roads.

But remittances also shine a light on the two uncomfortable truths that so many avoid: that the much-desired billions in development aid that remittances represent come partly from the labor of those who work and live elsewhere illegally, and that "creating opportunity" has come to mean opportunity for those willing to live in the shadows in the most prosperous nation on the planet.

For years -- despite the risks, the distances and the gamble -- thousands of desperate Latin American workers have been going north. Most recent studies on remittances have found, for instance, that families frequently make a collective decision about which relative will go to lead the family out of poverty. U.S. policymakers have mostly looked the other way, and through their silence or inaction are allowing those workers to live in the United States illegally. And so today an estimated 8 million people live in an under-the-radar situation here that seems hypocritical if not immoral, especially in the face of the argument that creating better chances for prosperity is the way out of poverty.

So, the question that remains is whether this system of migratory work and economic growth through illegally earned remittances is the kind of opportunity envisioned for the people of the Americas. Even before the summit begins, Bush is expected to unveil the most far-reaching proposal for immigration reform in nearly two decades. The plan would include a new program of temporary work visas, as well as a way to grant legal status to some of the immigrants already in the United States. These ideas will be welcome, but many analysts argue that the president's proposal is more of an election-year ploy than a moral or philosophical manifesto.

Those who may be thinking that this could be the occasion for diplomacy to thank politics for saving it from embarrassment should think again. There is no telling how awkward it will be for presidents and prime ministers to sign a declaration later this month that pays deference to capital partly earned illegally while keeping silent about the legal status of those providing such wealth.

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