Hispanics Send Billions Back Home

More than 40 percent of adult Hispanic immigrants in the United States regularly send money to relatives in their native countries, a flow of funds totaling nearly $30 billion this year, a new study finds.

That money goes for all sorts of expenses — food and shelter, education, savings and investments. The amount far exceeds the total U.S. foreign aid flowing to all nations — $17.2 billion this fiscal year.

"Migration is now not only an escape valve, it is a fuel pump" to foreign economies, said a report released Monday by the Pew Hispanic Center and the Inter-American Development Bank.

The economic downturn that began with the short-lived recession of 2001 did not halt the flow of money, the report said; foreign-born Hispanics in the United States sent $25 billion in 2002 to relatives back home.

The 2003 report said 42 percent of adult Hispanic immigrants — around 6 million people — regularly send money to their homelands.

The study found 28 percent of adults in El Salvador, 24 percent in Guatemala and 18 percent in Mexico receive money from relatives in the United States. Most of those receiving money are women.

"It's going to sustain a big swath of the working class and lower middle class," said Roberto Suro, director of the Pew Hispanic Center. "During economic hard times, it's what keeps them from slipping into poverty. Unlike foreign investment, remittances aren't driven by business decisions. They're driven by very close emotional bonds."

Treasury Department statistics indicate these payments represent a major chunk of total income in many countries — 13.5 percent of gross domestic product in Jamaica, 13.8 percent in El Salvador, and 16.2 percent in Nicaragua.

Europeans immigrants at the beginning of the 20th century also sent money home to family members, Suro noted, but it was a much more cumbersome process.

"Today, it's just much easier and much quicker and much cheaper to wire money from Los Angeles to Guadalajara (Mexico) or from New York to the Dominican Republic than it was to send it to Italy or Poland 100 years ago," Suro said.

The study found people receiving money from U.S. relatives are more likely to think about emigrating themselves. In Mexico, for example, 26 percent of respondents who receive payments said they were thinking about moving to the United States, compared with 17 percent of those who do not receive any financial help from relatives.

The report was based on surveys of residents in El Salvador, Ecuador, Guatemala, Honduras, and Mexico, and a separate survey of Hispanics living in the United States.

A Treasury Department official told Congress in October that people around the world send $72 billion to their home countries in 2001.

Hispanics aren't the only ones who ship cash home. Muslim immigrants use networks known as hawalas — which rely on wire transfers, couriers and overnight mail — to send cash to their families overseas.

Since the Sept. 11 attacks, authorities have worked to dismantle the system, fearing it allows terrorists to raise and launder money.

Osama bin Laden has boasted that hawalas created cracks in the Western financial system that "were as familiar to him and his al-Qaeda colleagues as the lines of their own hands," a recent congressional report warned.

Offices of companies providing hawala services have been shuttered in cities around the United States.

Defense lawyers call the crackdown overkill and say prosecutors have unfairly linked their clients to extremist causes and subjected them to interrogations and severe jail conditions without actually charging them with terrorism. Some of the defendants were naturalized U.S. citizens with clean records.