Migrant workers face challenges in sending money home

The World Bank reported the anticipated 7.3% decrease of remittances in a Migration and Development briefing on 13 July 2009, estimating that money migrants send home to families in their native countries will amount to about 1.7% of the GDP for developing nations in 2009, a slight decrease from the 1.9% that it did in 2008.

“The richer the country, the smaller the remittance rate — or, conversely, the poorer the country, the larger the remittance rate,” Ratha explained to MediaGlobal. “When you see a decrease like this, it is very significant to these migrants and to their families, many of whom have come to depend on this source of income.

“At this level, we are talking about dollar volumes that are three, four, even five times the size of all official assistance and foreign aid that is flowing to these developing nations.”

In Haiti, for example, remittances account for nearly 20% of the country's GDP, Ratha says. Smaller economies such as Tajikistan, Moldova, Tonga, Lesotho, and Guyana remain the top recipients of money sent from families abroad, with more than 25% of their GDP resulting from remittances.

These countries have already reported drops in remittance rates — Moldovans working abroad, for example, sent around US$407 million home in the five months of 2009, marking a 33% decrease from the US$608 million they delivered this time last year, according to the National Bank of Moldova.

Yet Ratha notes that migrants are continuing to send money — though perhaps a smaller sum — even if they find themselves temporarily out of work.

“The job market is weak, but people are not going back home so quickly because even if they lose their jobs in the US, there is a much better quality of life here for them than there is back home.”

Though business has slowed for one Gambian migrant worker, who identified himself only by his first name, Mohammed, he said he continues to send money home to his mother and father in the country's capital, Banjoul.

Yet Mohammed, who spoke to MediaGlobal in a music store in Little Senegal, a neighborhood in upper Manhattan, says that the weakened US dollar has left him and his family in a challenging position.

“I used to send US$100, but now I might have to send US$250, because the dollar is not worth what it used to be, and more money is required,” he explained. “I can't send money that I don't have. My hours have been cut, and I do what I can.”

Another Senegalese migrant, Tafasa, says his general store, also located in Little Senegal's West 116h street main stretch, is struggling to retain customers.

“I used to send money home every month, but I can't do that anymore,” Tafasa, 32, told MediaGlobal. “My family understands, but it is difficult.”

Dexter Nag, an Indian migrant, has found himself in a similar trying situation. It's been quiet at the Indian snack shop he works in downtown, and his boss slashed his work hours several months ago.

Yet Nag, 22, says he continues to send the same amount of money home to Bangalore every fortnight, though he has been spending less on himself.

“It's not the only source of income that my family has, but it is nice for them, it makes them happy,” he told MediaGlobal. “I feel happy, as well, when I am able to send money home. It makes me feel responsible.”

Nag noted that business has recently picked up again in his restaurant, and that his finances are leveling out.

That trend should become more widespread in 2010 and 2011, according to Rath, who estimates that remittances should begin to steadily increase in the coming two years.

Nevertheless, he says that protectionism and a clamp down on immigration could hinder that progress, as large, developed nations seek to better their economies.

“A potential clamp remains a huge risk because the political reaction to the crisis has been to protect the job market at home, and many countries may come up with new restrictions on migrant workers. Then there would be the risk that this remittance rate would slow down even more, and that some forced migrants would be forced to go home,” he said.

“That could mean a lot of hardship to many people. Facilitating these flows, and enabling people to have access to the work abroad, will really be key in making sure an increase occurs.”

Article published courtesy of MediaGlobal.org