SHARE News 5/31/06

In this issue

• Senate Passes Mediocre Immigration Bill
  

• Sending Dollars Back Home by Claire D'Emic

• Calls Needed to Close the School of the Americas!

• Reflection: Trade and Migration

   

Senate Passes Mediocre Immigration Bill

On May 25, the Senate passed Senate Bill 2611 ("Hagel/Martinez"), immigration legislation that has met with a mixed response from the immigrant rights community. The bill proposes a three tier legalization process that divides undocumented immigrants based on the amount of time they have spent in the United States. While the details of the process are still unclear, it is known that around a million people will be deported immediately and several million more will have to return to their country of origin to apply for documentation to enter the U.S. The Senate bill also increases enforcement mechanisms on immigrants and their employers and calls for the construction of additional fences along the U.S.-Mexico border.

SHARE opposes this compromise, because it fails to meet the conditions we have set forth in our immigration statement. Some legislators and activists believe that an imperfect compromise is better than no bill at all. SHARE disagrees, however, as it seems unlikely that the harshness of the Senate bill will be mitigated by negotiations to reconcile it with the even more punitive House immigration legislation (H.R. 4437 or the "Sensenbrenner bill") passed in December 2005. The Senate rushed to create this "compromise bill," and they could have done better. We will not support legislation that compromises the rights of immigrants for the sake of political expediency and urge legislators to examine the root causes of migration, which include poverty and social dislocation.

Over the next month, SHARE will be encouraging you to contact members of Congress, including the immigration bill conference committee, to call for just immigration laws and a U.S. foreign policy that fosters development and peace.

To learn more, see the following links.

Article by David Bacon:

Getting No Bill at All Is Better Than Senate Bill

Other organizations' responses:

National Immigration Forum

National Council of La Raza

Center for Human Rights and Constitutional Law

Sending dollars back home

By Claire D'Emic

Ask any World Bank or US Agency for International Development official how international development will be funded and chances are foreign aid is not the only answer you'll get; increasingly, remittances form a part of the response. This past decade has seen an incredible rise in the amount of attention paid to remittances. Basically defined, a remittance is money that is sent from an immigrant individual or group in one country or region to relatives and friends in the home country or region. Most remittances are sent from migrant workers to their families or villages.

SHARE collaborates with Salvadoran organizations such as CARECEN International to encourage a long-view towards use of remittances. SHARE's mission is to fund human centered development projects focused on women's and youth empowerment, micro-credit projects, and organizing work to protect the human rights (political, civil, economic, cultural and social) of Salvadorans and bolster economic sustainability.

Funding development through remittances is an attractive option, because you do not need to pass through governments that are notorious for corruption and inefficiency in managing funds. More and more individuals and foundations are choosing to send funds for development through NGOs, like SHARE. A recent World Bank report found that an estimated US $167 billion was sent in officially recorded remittances in 2005. Including money that is sent through informal channels (which is not recorded), this figure could be as high as $300b¹.

There are both positives and negatives to using remittances for development. This article lays out some of the challenges and opportunities for using remittances for development.

Income without Opportunity

In 2004, officially recorded remittances to El Salvador totaled over US $2.5 billion, comprising over 16% of the nation's Gross Domestic Product (GDP). Still, remittances have had only a nominal effect on economic development in El Salvador. This can be attributed primarily to the conditions that prevent many Salvadorans from saving and investing. Most recipients of remittances are concerned with the provision of basic needs, so 77% of remittance money is used for consumption, and the money rarely reaches the official banking system. The average earnings of rural workers amount to $4 per day, which is not enough to cover the basic needs of a family, much less encourage savings and investment.

Meanwhile, there is a desperate need for investment in the agricultural sector, and rural areas often lack even basic social services. If rural workers were paid a true living wage, remittances could amount to a surplus to be invested. The current trends, however, will continue to mean that remittances are used to support only a basic level of subsistence.

Home Town Associations: Creating Opportunity?

Organizations known as Hometown Associations (HTAs) increasingly channel money into public works. The growth of Hometown Associations is a recent development paralleling post war stability in El Salvador. HTAs are organizations that form most commonly in Salvadoran Diaspora communities in the United States to send money home collectively. Unlike standard remittances, money sent by HTAs is sent to entire communities and is usually earmarked for specific development projects such as post-civil war reconstruction and disaster relief.

One example of HTA activity is Communidades, which was founded in 1993 as an umbrella organization for other associations in Latin America that promote social development projects and provide support for the reconstruction of El Salvador. Communidades also oversaw the creation of a federal credit union which offers affiliated HTA loans, international money transfers and other banking services.²

The New Dependency Model?

Some development experts worry that increasing migration will create dependence on remittances. The primary problem with migration is that it removes from the domestic labor force both skilled and unskilled workers. The loss of skilled workers is especially felt in industry, finance and other vital sectors that rely on highly formally educated people. It also limits the availability of social services such as healthcare and education which also depends on people with access to a formal education.

Another negative impact of migration is the disincentive it provides governments to create policy that would improve the labor market and provide social services. By providing for the basic needs of people, remittances take a great deal of pressure off of the government to ensure that workers receive fair wages. Without this pressure, the government of El Salvador is unlikely to create jobs, provide social services or foster other forms of development for its people. This is especially true in rural areas, where the opportunity for a voice in politics is already limited.

The Central American Free Trade Agreement follows this logic by growing jobs that pay $4 a day or destroying entire industries with the flood of cheaply produced products that a small farmer cannot reproduce without subsidies. CAFTA will likely lead to further immigration and dependence on remittances.

Alternatively, SHARE is using its funds to create sustainable economic opportunities for people and to invest in citizen participation in government so that people can develop a political voice.

What Can be Done About Remittances?

The question isn't really if remittances are good or bad, but rather how can they be best used to promote sustainability? Part of the solution involves the Salvadoran government investing in real sustainable solutions to poverty by creating real economic opportunities that pay a living wage. Until this is achieved, Salvadorans will continue to migrate north in search of living wages and they will continue to send remittances home. Until living wages are established in El Salvador, it will be hard for many Salvadorans to use the money for future investment sources when they need the money for daily living.

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¹The World Bank. Global Economic Prospects 2006: The Economic Implications of Remittance and Migration. Washington, DC, Library of Congress, 2006.

²"The Development of Hometown Associations in the United States and the Use of Social Remittances to Mexico". Alarcon, Rafael. In Sending Money Home: Hispanic Remittances and Community Development. de la Garza, Rodolfo; Lowell, Briant Lindsay eds. Rowman and Littlefield Publishers, New York, 2002.