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October 2004, Volume 11, Number 4

Latin America: Remittances, Crime, Economy

Remittances. The Inter-American Development Bank projected that some $30 billion may be remitted to Latin America in 2004, up sharply from $23 billion in 2001. Some six million Latin Americans in the US regularly send money home, with the average remittance $200. Half of the remittances go to Mexico, and total remittances exceed foreign aid to Latin America, account for more than 10 percent of several countries' economies and are equivalent to half of the foreign direct investment in the region. Most studies suggest that about 80 percent of remittances are spent on day-to-day living expenses; less than five percent are spent to launch businesses.

The Central American Free Trade Agreement (CAFTA) has become controversial among some associations of immigrants from Central America in the US. The Central American Resource Center opposes CAFTA, as does Senator John Kerry, saying that its labor protections are insufficient. CAFTA includes a three-tiered approach to protecting worker rights, calling on countries to enforce their own labor laws as well as having them work with the ILO and the US Department of Labor to improve labor laws and their enforcement. Central American governments are pressing for approval of CAFTA before January 1, 2005 in order to protect textile jobs that could move to China as global textile quotas end.

Crime. There are 70,000 to 100,000 gang members across Central America and Mexico, some of whom were deported from the US, and others who seek to emigrate to escape violence at home. As gang members move north, they prey on economic migrants headed to the US. Governments supported by the US to preserve democracy are taking anti-democratic steps to curb gang-related crimes, such as arresting young men with tattoos as gang members.

The two largest gangs, the Mara Salvatrucha and the Mara 18, began in Los Angeles among the children of Central American refugees in the 1980s. After immigration reforms in 1996, convicted gang members were deported, and Central American police proved to be no match for them. Gang members circulate between the US and Central America, with Los Angeles police reporting that half of all homicides are gang related. Calling gang members "domestic terrorists," Los Angeles police have gotten injunctions that prohibit gang members from meeting in public.

The governments of Honduras, El Salvador, Guatemala, Panama and Mexico in 2003 signed an agreement to explore ways to collaborate in the fight against gangs. However, critics say that the steps taken by governments so far- locking up suspected gang members in overcrowded jails that periodically experience fires that kill hundreds- has aggravated rather than solved the problem.

President Bush in mid-July condemned human trafficking at the first US Department of Justice conference on trafficking in forced labor, saying that the US spent $295 million to support anti-trafficking programs in more than 120 countries. Bush cited Department of State estimates that 600,000 to 800,000 adults and children are trafficked globally each year, including 17,500 who reach the US. By some estimates, 80 percent of those trafficked are women and children, and 70 percent of them were forced into sexual servitude. Bush said that 110 people have been charged with trafficking in the past three years in the US.

Economy. The Dominican Republic, a Latin economic star as recently as 2001, verged on default in summer 2004 as the economy shrank and the government failed to make required interest payments on foreign debt, which almost doubled to $7.2 billion in the past four years. Leonel Fernandez, who was president from 1996 to 2000, replaced Hipolito Mejia in August 2004, who ran up the debt in part by bailing out politically connected owners of failing banks.

Some 7,000 Dominicans have been intercepted attempting to cross the 80-mile wide Mona Passage to Puerto Rico in the first 10 months of FY04, and a 10-foot wide and 40-foot long boat with over 80 migrants lost over half its passengers in mid-August 2004.

Caribbean islands were battered by hurricanes in September 2004, threatening at least short-term damage to fragile tourist-based economies. Jamaica, with 2.7 million residents and a $6 billion economy based on bauxite and tourism, suffered relatively little damage on its northern coast, where tourism is concentrated. However, Grenada, which the US invaded in 1983 to restore order after a power struggle resulted in the killing of the country's prime minister, lost its nutmeg groves. Since it could take five to seven years to restore the groves, there are suggestions that the island diversify and plant flowers or other commodities that generate revenues faster.

Salvadorans abroad remit $2 billion a year, and there are complaints that too many Salvadorans in El Salvador wait for remittances and do not work. Hometown associations that collect funds for public works projects such as soccer fields are increasingly branching into economic development, and some are lending money to the 2,000 rural cooperatives established in the past two decades to launch job-creating businesses. In one case, grants and loans raised over $100,000 to grow loroco, a white flower that is a popular ingredient in pupusas, the traditional Salvadoran tortilla dish stuffed with cheese, beans and other fillings.

There are over 400,000 Nicaraguans in Costa Rica, and actor Cesar Melendez portrays their experiences as migrants in the play El Nica; many harvest coffee and fill other farm jobs.

Krissah Williams, "Money From Salvadoran Immigrants Aids Farming Cooperative Back Home," Washington Post, October 8, 2004. Evelyn Iritani, "In U.S., Latino Discord Over Trade Accord," Los Angeles Times, August 23, 2004.