Monday, July 7, 2008

A fairly reasonable petition to the European Executive Directors of the World Bank.

Dear Friends

As a former Executive Director at the World Bank, 2002-2004; as a Venezuelan citizen of European descent; as a proud holder of a passport of a European country; and foremost as someone who harbours a deep respect for the international migrant workers and profound concerns about the future of the world at large, I respectfully ask you to consider the following:

No matter how the Chairs at Board of Executive Directors are realigned between countries all firmly anchored to their local interests, the fact is that the world itself, our planet earth, will never be sufficiently represented at the World Bank.

Given the ever more intensive global interdependence, in so many vital affairs, there is an urgent need to introduce some representation of global interests and perspectives; such as those represented by the migrant working communities, and which if all added up currently represent an economy the size somewhere between that of India and China.

Unfortunately there is no way something of this nature could be handled expeditiously through a process that requires political negotiations over the whole world; and so in this respect I ask of you the European Executive Directors at the World Bank to take turns leasing out, for one dollar, one year at the time, the voting rights of your shares in the World Bank, you can keep the dividends, in order to accommodate the continuous presence at the Board of the World Bank of a Chair that represents the views and the interests of the migrant working communities.

Europe is currently represented at the World Bank by of 8 and some years even 9 Executive Directors, out of 24, and no should be able to seriously argue that Europe would risk under-representation were it to be reduced to only having 7, or some years 8.

This petition and which of course does not imply a permanent commitment or a final reallocation of shares would, if accepted, allow Europe to speedily enact a pilot on global governance that could prove to be extremely valuable for the whole world.

Europe is of course in its right to use whatever influences they feel are appropriate in the selection of The Migrants´ Director and we would understand if this initially favours the migrant working communities in Europe, or a European migrant working community working elsewhere. That said, in time, I hope that other migrants, like those of El Salvador or Honduras and which on their own generate economic production that by far exceeds their respective homelands GDP, and are therefore of special significance, will also be provided with an opportunity to contribute with their own special global glue.

Wednesday, April 9, 2008

Remittance fees: The tip of the tip of the tip of the iceberg

The remittances are to migration like the part of the cash dividends from corporations that you send to your grandmother and children are to the economy… just the tip of the tip of the iceberg!

Of course the cost of sending those remittances can only be the tip of the tip of the tip of the iceberg.

There has been an incredible fixation by many institutions with the fees charged by the banks for the service of making the remittances. Yes, of course it is good that these fees become more competitive but it is almost laughable to think about all the resources used up in analyzing this very minor issue in an immigrant’s reality.

Just the money spent on communicating by telephone with home, or buying yourself over the borders, or the costs derived from not having a driver license and living in cramp living quarters, surpasses by far the sum of all the fees paid to the banks. So please stop talking so much about the fees, and help the immigrants to make more money instead… with which they would happily pay even higher fees to the banks, if so asked. Talk about shortsightedness!

That is what I said over and over while I was an ED at the World Bank; and that is what I wrote in my book Voice and Noise; and that is what I kept on saying thereafter in all the many conferences on remittances that I have assisted to… to the extent that I now almost feel embarrassed for them.

Yet, years later, I still have to be asking: How many more millions in research, conferences and publications are the development institutions to waste on this really silly and minor aspect of the migration issue?

Please help the migrants make more money instead!

Friday, February 15, 2008

The unknown and real power of the emigrant (from El Salvador)

A paper from 2003 titled “Discovering El Salvador’s Production Potential” written by two very renowned development economists concludes that notwithstanding “an extraordinary amount of reform since the early 1990s… The impressive growth of the Salvadoran economy in the first half of the 1990s has petered out.” The paper contains an analysis of some reasons why the above; and presents an interesting discussion over “self discovery” in order to achieve the development of new opportunities.

That said the most interesting part of the paper is to observe how the two experts, even though they very clearly see the trees in this case represented by the remittances from the emigrant workers, they can not see the real forest that all those emigrant workers constitute. ¿How could there have been an economic growth within El Salvador if the Salvadorians went somewhere else to grow?

The World Bank estimates that in 2007 the remittances from the emigrants of El Salvador to their homeland were about 3.7 billion dollars. If these remittances represent 15 per cent of the gross earnings of their emigrants (mostly salaries) the Gross Emigrant Product (GEP) of El Salvador should be about 24.7 billion dollars.

The GDP of El Salvador that The World Bank reports is around 18.5 billion dollars and if we assume that the 3.7 billion of remittances reflects themselves directly in that figure then its real net GDP, without consideration for their emigrants, is about 14.8 billion dollars.

The Salvadorian emigrants then produce 67 percent more than what is produced by those Salvadorians that remained in El Salvador.

And China has managed to grow because of their horizontal migration of an immense number of workers from their poor rural areas into the richer industrial and exporting areas, where they earn more. El Salvador has done the same, only that in their case their migration has been vertical, from south to north and crossing borders, but with that they have achieved much larger salary increases.

If we add the GDP of El Salvador net of the effect of the remittances with the GEP of the Salvadorians we could conclude that El Salvador has been growing faster than China. And why should we not? Are the Salvadorians less Salvadorians just because they work outside their homeland?

If we are more sincere in the process of “self-discovery” we could also conclude in that given so many of the Salvadorians with initiative have decided to look for development outside their borders, that it might not be even recommendable to try to develop new opportunities in El Salvador. From a global perspective the government of El Salvador might be relegated to fulfill just the functions of a caretaker of the farm, while the workers are away working.

The best way how the emigrants could assert their influence in their new host-land begins with them ascertaining their power in their homeland. In this respect the emigrant workers of El Salvador should have the right to appoint half of the members in their Legislative Assembly.

Having been an Executive Director at the World Bank, 2002-2004, where among other I had the privilege to represent El Salvador, I have always said that when looking for a better governance of the World Bank, more adjusted to current realities, before reshuffling the votes among geographical areas, all of a my-own-back-yard nature, that a chair at the Executive Board should be assigned to a representative of the large community of emigrant/immigrant foreign workers.

Published in El Tiempo Latino, Washington