More Money Enters Mexico from Its Workers Abroad Than from Oil Christine Romans and Patrick Gillespie - CNNMoney
go to original September 2, 2016

Mexico heavily depends on its workers living abroad to send cash back home (CNN)

Almost $25 billion flowed last year from the pockets of Mexicans living overseas, almost all of it from the U.S. That's even higher than what Mexico earns from its oil exports.

The average remittance in June was $300.08, which when multiplied by the number of Mexican workers abroad totals billions each year. Donald Trump has his eye on those billions - earlier this year, he said the cash could pay for the wall he has proposed between the U.S.-Mexico border, even though he didn't mention that in his meeting with Mexican President Enrique Peña Nieto on Wednesday.

Essentially, Mexico's most lucrative natural resources are the people who leave home. The cash remittances are a lifeline for the country and a critical source of economic development for America's southern neighbor.

Remittances are even expected to top $28 billion this year. All that money is dependent on a border that allows people to cross. Trump threatens this money flow in 2 ways: putting a stop to remittances and building a wall. Both would turn off the money spigot.

It might well be a reason behind the invitation from Mexico's president to the GOP presidential nominee to meet with him. Trump has suggested changing a rule in the USA Patriot Act to halt money transfers. While it's not clear such a move to put capital controls on immigrant pay would be legal, even the threat to shut off those funds is cause for concern.

The funds fuel a big part of Mexican consumer spending, from building houses to paying for schools. Remittances have also been growing faster than wages and inflation. It's also a critical time for Mexico's economy, which is showing signs of weakness.

The economy recently shrank for the first time in three years. Its currency, the peso, is near an all-time low, only worth 5 cents. However, a depreciating peso means every dollar sent home goes a little further.

Read the rest at CNNMoney

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