Press Releases

On July 30, the Mexican central bank reported that remittances coming from oversees nations—mainly the U.S.—have dropped 2.9 percent this year. This was the first decline since the practice began being accurately measured. In 2007, remittances flowing into Mexico reached an all time high of $23.98 billion, but Mexican officials recently predicted a decline this year of 1.5 to 2 percent as a result of the United States’ housing crisis and soaring food prices. Also contributing to the drop is the current crackdown on illegal immigration which has made it difficult for many Mexican nationals to gain entry across the border or find jobs in the United States.

The recent drop in remittances poses a major threat to the Mexican economy, as they are second only to oil as a source of foreign income. Remittances are important because they promote economic growth by allowing more citizens at home to engage in the formal economic sector, while simultaneously encouraging the use of formal financial services and participation in small-scale investment in the national economy. The decrease in remittances may also threaten United States diplomacy to a significant extent. In the past, Washington has used taxation of remittances as leverage for furthering U.S. interests when engaging with remittance-dependent nations in negotiations. If remittances fall steadily in the coming years, the United States may very well lose this bargaining tool.

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This analysis was prepared by COHA Research Associate Sarah Hamburger

Recent COHA Citations

A Sampling of Recent and Forthcoming Media Appearances from July 16, 2008 to July 30, 2008.

• July 16, 2008: COHA Director, Dr. Larry Birns, interviewed on 88.5 FM KGNU Radio in Colorado regarding “Barack Obama’s Foreign Policy Approach to Latin America; Critique of his Advisor Gregory Craig”

• July 30, 2008: COHA Director, Dr. Larry Birns, interviewed on 89.9 FM WORT Radio in Wisconsin regarding developing stories in Latin America.

• August 8, 2008: COHA Senior Research Fellow Ricardo Gjivoje will be interviewed on HITN regarding developing stories in Latin America.

A Sampling of Citations from the Period of July 13, 2008 to July 31, 2008

• ScoopEU’s Lifted Sanctions, A Turning Point for Cuba?

• El Economista :Washington, atento al proceso electoral en México