Saturday, June 12, 2021

No remittances without representation!

The June 8 news article "In Guatemala, Harris offers stern words on corruption" reported extensively on Vice President Harris's travel to Guatemala, where the United States, by offering financial cooperation, hopes to reduce the flow of illegal migration from Central America and stimulate better behaviors, e.g., less corruption.

Though those financial contributions are indeed important, they are peanuts when compared with the remittances sent home by the migrant workers. The reality is that what the migrant workers from many Central American nations earn abroad is often much more than the gross domestic product of their home countries. The sad reality is that their remittances help to keep in power those ineffective governments that made them immigrate and that keeps them from going home.

If the United States really wants to help, then look to politically empower as much as possible those migrants in their homelands. For instance, should they not have an important direct representation in their respective congresses? No remittances without representation!


Not the first time on the subject, nor hopefully the last:

PS. Around the world there are approximately 5 million Venezuelan emigrants of legal age. Of these only 69,211 were allowed to vote July 28. What if they had all voted? 🤔




Friday, January 11, 2019

If only we could classify the immigrants…

not based solely on their education or abilities or needs, but also based on if whether they belong to those who when in Rome do as the Romans do, or to those who in Rome do as they bloody like to do, then so many/most difficulties in the debates on immigration could be resolved.

If like Cantinflas


Wednesday, June 20, 2018

We must stop polarization profiteers from exploiting the difficulties posed by migration.

The polarization profiteers are having a heyday exploiting the “forced separated children” issue up to the tilt with blatant exaggerations (caged children) and crocodile tears. I am afraid that will backfire on those we wish to protect.

Note: The most profitable business in town seems to be polarization. “You attack me as hard as you can, I attack you as hard as I can, we convince our followers we are the best ones to save the world from the horrible threat each one of us poses… and then we split the profits 50-50”

Friday, January 12, 2018

On hearing about President Trump wanting to revoke Salvadorans’ “Temporary Protected Status”, I am and will be writing a stack of tweets

President Trump, I fully agree, there are some real shitty “shithole countries”. But please, never forget, even in these shitholes, there are plenty of great human beings, just like, even in the best countries, there are plenty of shitty human beings.

What’s worse? That a President refers to some countries as “shithole countries”; or that perhaps the majority of Americans would agree with him; or that there are some realities in countries, including in America itself, that could be defined as “really shitty”?

I am from Venezuela; it used to be a beautiful though by far not a faultless country, which country is? But now it is a shithole, and that’s my real problem. In fact, if President Trump would refer to it as a “normal country”, I would be very upset.

"Venezuela no es un país mierda, pero lamentablemente si un país vuelto mierda"

Why do many or even most of those originally from El Salvador and now living in America, not want to return there? Could it be because they agree with Trump’s definitions?

In The Guardian: “El Salvador ranks among the world’s deadliest countries for women and is the most homicidal place on Earth.” That describe better what, a normal country or a shithole country?

Extreme polarization blinds! What if Trump had said: “All countries are real paradises with great governments. We do not have the right to trick their citizens here, or, if here, to retain them from going back home”

I don’t get it. If President Trump truly believes that of “shithole countries”; and he might have his reasons, why would he want to force good hard working Salvadorans to return there? If paradises, would not many Americans want to go there too?

In pure Christian reasoning is not the more the shithole it is the more the reason to welcome those from there; that is legally of course; that is as long as they do not pose a threat to your own country; that is as long as you might not end up shittier than they.

Instead of threatening some good “temporary” citizens to have to go back to shithole countries, why does Trump not offer to build some Mar-a-Lago resorts to help make it paradise countries? 


I am a great admirer of those from El Salvador that honor their land of origin by laboring hard and honestly in America. I just wish they could and would exercise more influence back home. I just wish their good work not to be taken down by the criminals maras among them.

Washington DC, if after so many years of using them, you now ask Salvadorans, quite inhumanly, quite out of character, to get packing, you might sorely miss them, among other when its snows 

Frankly since it was awarded in 2001, has not Salvadorans “Temporary Protected Status” (TPS) long ago lost all its possible relation to temporality? 

Wednesday, March 9, 2016

My tweets to Donald Trump on his Mexico Wall

My biggest concern with any wall is the chance of ending up on the wrong side of it, in the wrong company.

The Great Wall of China, did it keep the world out of China, or did it keep China out of the world?

America there is less than 30 years between Reagan’s “Tear down this wall” and Trump’s “Build up this wall”

Are you sure the wall you propose is not just another useless Maginot Line? 

The higher, wider and longer the wall you build, the more doors in it you need in order to survive and prosper. 

The only benefit a Big Wall could bring, is improving your chances of getting those who can jump the highest or dig the deepest... if those are the ones you need.

What if Mexico says: “Yes, we build the wall, but 100% with the least expensive labor?

Is not helping making potential emigrants want to stay home the best wall?

Is the wall that America and Mexico might both want, that which separates us from those bad robots taking our jobs? :-)

What if a country attracted Americans like America attracts others? Would there be a Berlin Wall to keep Americans in?

Whatever, if Trump waves bye-bye to Nafta, I guess he knows that in order to achieve some of what he wants to achieve with the Wall, the Wall has to be at least twice as high.


PS. Now wall or no wall, if only we could divide the immigrants based on if whether they belong to those who when in Rome do as Romans do, or to those who in Rome do as they bloody like to do, so many differences in the debate on immigration would be resolved.

Wednesday, August 20, 2014

Which is the next country to understand that migrants represent the most go-get-it-daring citizens who can make a country prosper?

And hold it, the title does not mean I imply to make the crossing of any border easier… much the contrary… you might want to make it harder… so perhaps when someone crosses it, you have a greater chance of getting the real fighters for opportunities, those who could really make you stronger, and not just those looking for that easy way out you cannot afford to provide them.

Much has been argued about the horrors of “brain drain”… which I agree is a very serious issue, but here I am speaking about something much worse, I am speaking about the “daringness drain” those leaving would cause their homelands to suffer… but I do so in the hope that “the daring” will not also suffer heart-drain, and so may one day decide to recover their homeland from those who denied them their opportunities there.

Sunday, May 16, 2010

The Reminder! No remittances without representation!

One week per year, only one, I would beg all of you migrant workers not to send one single dollar in remittances to your homeland. If you want to send double the usual amount one week earlier or one week after to your family, that is OK, but that week, let your governments understand that you do exist and are important.

No remittances without representation!

Thursday, July 23, 2009

Diaspora Bonds

Why should the Diaspora help to finance those who might be the main cause for them being an involuntary Diaspora?

Diaspora, because of the different risk perspectives on their home country, requires often higher interests in order to buy the bonds than those offered by international capital markets

Why should the Diaspora who is already sacrificing and remitting so much have to invest in securities that might not be the best suited for their personal risk profile? And which might in some cases precisely involve diversifying away as much as possible from their land of origin.

Sunday, July 12, 2009

The Honduran migrant workers should have their own tea-party… No remittances without representation!

In the case of Honduras the remittances signify 25% of the GDP of Honduras. If we assume that the migrant workers remit 20% of what they earn we can then calculate that their gross earnings represents 122% of Honduras GDP. And so, if we divide the 122% by the net 75.5% GDP that was produced domestically in Honduras, then we have that the Honduran migrant workers outside Honduras produce a bit more than 1.6 times what is produced in Honduras.

In other words it is the Honduras migrant workers that with immense sacrifices carry their poor homeland on their shoulder but yet no one asks their opinions in relation to the recent events in Honduras.

Shame on all the Hondurans back home, the minimum one could expect in such circumstances is that the migrant workers would have at least 30 percent of the seats in the Honduras Congress.

Shame on all the Honduras delegations that go abroad to discuss the problems of Honduras with foreign NGOs, Government, UN, OAS and what have you, instead of speaking first and foremost with their own people.

Compared to what the Honduran migrant workers send home, the EU, Alba, World Bank and all other possible donors together are small fry!

Giving the Honduran migrants real political voice in their country that would indeed merit a change in its constitution; not what zelaya had in mind which was just of personal interest to him to his boss chávez and all other that pinned their hopes on being able to pull off an eternal reelection.

Sincerely what could zelaya have been thinking! Adding to the woes of so many of his fellow countrymen sacrificing themselves abroad an anti-US chávez inspired act?

El Universal, “Los Hondureños sombra”

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 immigrants (from El Salvador)

A paper from 2003 titled “Discovering El Salvador’s Production Potential” written by two very renowned development economists, Dany Rodrik and Ricardo Hausmann, 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), then a Gross Emigrant Product (GEP) of El Salvador would be around 24.7 billion dollars.

World Bank also reports that the GDP of El Salvador is around 18.5 billion dollars. If we assume the 3.7 billion of remittances is reflected directly in that figure, El Salvador’s real domestic GDP, adjusted downward for what their emigrants send home, is then about 14.8 billion dollars.

So the Salvadorian emigrants produce 67 percent more than what’s produced by the 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 emigration 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 these immigrants could assert their influence in their new host-land begins with them ascertaining powers 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

And of course all this applies to Honduras too

Saturday, June 9, 2007

If they don’t go back, someone else can pay!

One of the difficulties when discussing or legislating about immigration issues is that no matter how obvious it is that a border has two sides, everyone insists in resolving everything on just one. For instance since for the nation receiving a temporary migrant worker he is mostly a stranger, it must be more challenging for it to make sure that he will return once his authorized stay has expired, than for the sending country, for which that emigrant worker is just another neighbor.

In this respect I am currently working on the design of a program whereby reputable and private insurance companies in Central America (some with foreign owners) will offer to guarantee to the US government to pay a quite significant indemnity (minimum 100.000 US dollars) for each worker that covered by a specific temporary worker-program return insurance does not return home, in a timely manner.

Are we talking about an enforcement program that could have some objectionable human rights issues? Absolutely not! Since the premiums for the insurance will be paid by the migrants themselves, and the program contemplates giving them important discounts based on the collective behavior of the group, it is primarily about creating the right incentive structure, and knowing your client.

In this particular case, on both borders, an additional difficulty is that so many have got it fixed in their brains that a migrant worker is by definition a worker who wants to stay, no matter what, and this is absolutely false. The best antidote for any illegal immigration that I can think of is a true temporary program where everyone understands what it is all about, fully accept the underlying premises, and decide to do the best they can to benefit from the valuable window of opportunity that is being offered to them. In short, extremely good temporary migrant worker programs could be developed if people and lawmakers would just dare to reach out.

Monday, April 30, 2007

A temporary or a step-motherland?

The Inter-American Development Bank (IADB) estimated recently that the remittances by the working migrants to Latin-American were 62.3 billion US dollars in 2006. If that amount represents between 20% and 15% of the income of the migrant workers then we could speak of a gross migrant product (GMP) of 310 to 415 billion dollars, a really impressive amount.

For El Salvador, what their migrants earn would represent a GMP between 90% and 120% of El Salvador’s regular GDP, and given that a Salvadorian should be no less Salvadorian just because he works abroad we could in fact say that in real aggregate terms the economy of El Salvador is twice what is currently reported. (Should this not count for calculating their economic quota of voice in international organizations?). 

Given such figures it is quite natural that multilateral agencies such as the IADB and the World Bank give much attention to the issue of migration and remittances but, in this respect, on three aspects, I am not at all in agreement with what these entities do or say. 

First. The remittance that an emigrant son sends his mother is no different that the help the son who remained at home could give her. I say this because although this is often fleetingly acknowledged one always receives the impression in statements and papers that these funds constitute an opportunity for “benign” interventions. If they wish to help both sons and their mother to make a better use of their income, they are much welcomed to do so but if what they have in mind is to especially single out the remittances of those that work abroad, the effect of that could turn out to be very counter productive. 

Second. Fortunes have been spent on analyzing and looking to reduce the costs of the remittances which, though not something bad, constitute a total irrelevance when placed into the context of a GMP. Instead of so much navel gazing on these costs and that should solve themselves naturally by just more competition, much more important is it that they look to see how they could help to increase the general income of the migrant, much the same way as they try to do for those who remained at home. 

Third. Much is being discussed about the possible brain-drain that the countries of the emigrants could suffer, but little or nothing about what they should be worrying more, the possibility of a heart-drain. The truth is that if those countries that today receive all the remittances do not occupy themselves with changing the conditions that makes migration almost obligatory, and of maintaining the contact with the hearts of their emigrants, then these motherlands could very soon find themselves substituted by step-motherlands, and the remittances suddenly disappear, and not by magic. 

Indeed, all stepmothers-to-be should be interested in this issue, if they do not want any of their temporary arrangements to become permanent.

Translated from articles published in El Universal, Caracas and El Tiempo Latino, Washington.

Friday, December 15, 2006

Against the flight/drain of hearts

Regardless of how much is said about how the brain-drain (flight of brains) can negatively affect developing countries, which have a high level of emigration, in my opinion the most important thing for them is to avoid heart-drain. hearts (flight of hearts). A flight of hearts would bring as a consequence not only the possibility of losing the aid that remittances currently mean, but more importantly, that the nation would lose many of its citizens forever, precisely those who, by emigrating, may have shown the greatest capacity for initiative. .

Today, even with so much talk about globalization, economic records continue to be kept based only on local geographic boundaries. For example, if a Guatemalan leaves his country, he becomes part of the PTB of his host country and only his family remittance will be recorded in the economic figures of his Guatemala. The foregoing is an erroneous way of approaching the matter, since, in my opinion, in a globalized world a Guatemalan should never be less Guatemalan for the mere fact of working elsewhere. In this sense, all the gross income that an emigrant obtains abroad should be part of the GNP of their country of origin and this would more clearly show the country's need to support its emigrants instead of forgetting about them.

I believe that the previous reflections clearly indicate what should then be the main function of, for example, the universities in Central America, with respect to the emigrants from their countries. On the one hand, they must analyze and develop the programs that can help an emigrant to maximize their potential in a foreign country, when they have made the decision to emigrate, and on the other, analyze and develop the programs that can help an emigrant not to lose contact with their country of origin.

Based on the above appreciation and on the fact that there is nothing higher than the absolutely primary, I would recommend that universities immediately develop some simple virtual courses on the history, geography and culture of their respective countries and place them at the available to all those who are about to become the first generation of children of Central American emigrants... and before we lose their hearts forever.

Urgent Postscript: On December 7, 2006 the Pew Hispanic Center, the Woodrow Wilson Center and the Migration Policy Institute published some results of the National Latino Survey that they conducted in the United States. The results are frightening, since seeing how quickly immigrants forget to return, stop making transfers and even lose frequent contact with family and friends, the "flight of hearts" would seem to be a ferocious disease.

Personally, I am eagerly seeking the United States to authorize a program where duly registered United States citizens can become responsible as official escorts, to allow illegal immigrants into the United States who for all practical purposes are "imprisoned" in that country for as long as they do not dare to lose the option of staying, they can go and return to their country to "warm their hearts", without the authorities leaving a record of their trip.

Published in El Tiempo Latino, Washington D.C.

Monday, December 11, 2006

America, please allow for the use of chaperones at the borders

Sir, so much has been spoken and written about the “brain drain” in relation to migration, and so little about the much more serious and final “heart drain” that occurs when the homeland is forgotten. Currently millions of illegal immigrants are de facto imprisoned in the United States since they do not dare to go back to their homelands. Of course, they can always go home legally, but they cannot afford to lose their option of returning here, once they leave. This is the source of millions of human tragedies when they cannot visit a grandmother who is ill, a father on his sixtieth birthday, a sister’s wedding, and perhaps even a daughter’s First Communion. And all this happens, in fact, for absolutely no good reason at all.

While America makes up its mind about what to do with all the illegal migrants, could it not at least show some of its well renowned kindness? Could it not, for instance, authorize respectable American citizens, churches, or recognized NGOs to operate as official chaperones and to make themselves responsible for accompanying an immigrant to his homeland, for a week or so, to help him warm up his heart, and then returning him here, with no one at the borders objecting or making a record of it?

Wednesday, July 5, 2006

A de-facto USA enlargement

When we read that in the greater Washington metropolitan area alone, there already are 550.000 persons who come from El Salvador, there can be no doubt whatsoever that the Central American countries are already a de-facto part of an extended USA Commonwealth. Put another way, the USA—surreptitiously perhaps—has gone through its own European-style enlargement. 

This demographic fact shows that the current debate in the USA on immigration reform could benefit by being split into two parts: immigration reform as such; and a debate about some laws and regulations affecting cohabitation in a commonwealth. Doing so would allow urgent reforms to proceed more constructively and keep the debates from being taken hostage by extreme proposals like building new Maginot Lines or Berlin Walls.

Not long ago, some enemies of the recently negotiated CAFTA agreement started spreading rumors that, through it, the United States had accepted conditions that in effect bypassed current immigration laws. This is not true, far from it. However, perhaps the CAFTA negotiations were indeed the perfect opportunity to start open and transparent discussions about what I call the de-facto enlargement of the USA. As it is, trying to look for solutions to some huge but still quite particular problems through a general immigration law is really picking the wrong instrument of change.

By the way, if I were a truly desperate builder of a wall to surround the United States, looking at the map, I would perhaps have to settle with some water barriers such as the Bering Strait and the Panama Canal.

Extracted from my Voice and Noise 2006. 

Sunday, July 2, 2006

The Skin of the United States

The immigration procedures of a country should be like a good skin, providing barriers against dangerous elements but at the same time sufficiently porous to breathe and benefit from nutrient opportunities. As it also is one of the display windows unto the world, it should perhaps also try to look beautiful.

Attending a recent seminar in New York arranged by The Center for Migration Studies, at the Fordham University School of Law, I found that most of the participants believed that the current conditions of this country’s skin were not that good, if not plain awful. Good-intentioned treatments, nips-and-tucks, such like a Premium Processing Service that allows anyone who pays a thousand dollars to jump the line, will not produce good and sustainable results as they seem almost to reward inefficiency. This program in particular is also an embarrassing blemish for a land that preaches equal opportunities.

It would be almost impossible to resolve the weaknesses of the current system by just tweaking it, and there is no reason for even trying this route when a true state-of-the-art system could offer so many benefits for the United States and the world. For instance, as we know that information that cannot be obtained in very few hours will most probably never be obtained at all, the current efforts to reduce procedure times from six months to one month must have very little to do with an as-good-as-it-can-get modern system.

There is a lot of nervous sensitivity with respect to immigration in the United States, perhaps even to the extent of preferring a system so closed that the American citizens themselves would be precluded from being able to leave the Unites States. Recently even a program on a global TV news channel has been calling for some close-the-doors-and-build-walls solutions.

As a temporary visitor to this country I know it behooves all of us from the rest of the world to understand that the more United States citizens feel comfortable in their own skin, the more they would be confident enough to open up and mingle with us. 

Are we truly a World Bank?

Dear Colleagues (at the World Bank Executive Board)

Recently I attended a seminar in Berlin on the financing of houses in poor and middle-income countries. Most of the seminar came down to a very interesting duel between the extreme rationality of the Danish Mortgage System (with its almost magically low 0.5% margin of intermediation) and the very gung-ho attractiveness of the cooperative type Bausparkasse system of Germany.

Close to the end I, daringly, made the following comment:

”The final purpose for building a house for a poor person is not to have him starve now under a roof. So, before we build, we need to be certain that there is a reason for him to live there, since otherwise, with the house, we might just be shackling him down to misery.

In this respect and in relation to your interesting mortgage systems, I would like to know whether a Danish or a German citizen could finance through his own financial system the purchase of a second home for vacation or retirement, for instance in Central America. If your answer is yes, then we might be able to sell you some houses and not only find thereby the reason to build for our citizens, but also generate the sources of income they need to pay for it.

Many of the immigrants in your countries frequently want to buy a house back in their own homeland, which is great. This, unfortunately, puts a lot of pressure on the very scarce financing resources available in these poor countries from which they emigrated. If they could access your credit markets for this purpose, this should bring benefits for everyone. I know it’s not easy but, tell me, what do you need? Expropriation-risk insurance, for instance … We could get you that!

As you can suspect, my intervention did not produce any immediate response, but I believe that at least I got some interested head-scratching going.

(Jim, my editor observes: “Suppose a crooked Mexican gets a mortgage from a German bank to buy land and build a house in Mexico. He takes the money, buys the land, builds the house, and sends the bank a letter saying he’s not paying them a cent, and what can they do about it? Would the Mexican government have the sheriff evict the guy who cheated the German bank on his mortgage?”
I: “Jim, if there are thousands of Mexicans whose chances of buying their houses depend on how this Mexican services his loan with the Germans, you will see them all putting some pressure on fellow Mexicans and their own government to behave better.”)

Back in Washington, I found a brochure from our Bank Fund Staff Federal Credit Union titled “DREAMING of a second home for vacation or retirement?” Great! However, further down we can read, in bold italics, “anywhere in the U.S.” Well, colleagues, shame on us! Are we not just being a very a local World Bank?

Per

Saturday, July 1, 2006

Scaling up imagination about immigration

A short while ago, A. T. Kearney/Foreign Policy published their Globalization Index (Foreign Policy, March/April 2004), which assigns points to countries by measuring the number of Internet users, hosts, and secure servers—without even considering the contents transmitted online or through other media. In July of 2004, one of the many lists of favorite Web hits ranked Paris Hilton as No. 1, Howard Stern as No. 50,, and in between—besides the Bible, diets, marihuana, and beheadings in Iraq—nothing that could be even remotely related to any type of useful learning.

Who is more global, a family in a rich country with 10 televisions for 10 local sitcoms or a family in a poor country with only one TV on which they watch foreign programming? Who is more global, a family from a rich country that visits Paris or a family from a poor country with loved ones working abroad on whose remittances they depend for survival? Clearly, the index developers need to go back to the drawing board.

Just like the cause celébre blamed in the 9/11 report for the failure to prevent those horrendous events, the current debate on immigration suffers clearly also from failure of imagination.

Already there are developing countries where up to 40 percent of the work force has migrated to work in developed countries instead of staying to become a burden on society. Through their remittances, emigrants now constitute the main source of their homelands’ foreign-currency earnings. Against this backdrop, it is amazing to hear relatively little discussion about how to exploit these opportunities further—“scale them up,” as they say—especially when compared to the immense attention given to marginal issues such as the transfer cost of remittances … or the very negative spin given to the debate with the argument of “brain drain.”

There are also developed countries that for many reasons—demographics just one of them—have gotten themselves into fiscally unsustainable welfare systems. The question politicians should be asking constituents is whether they wish to have foreigners assist in the upkeep of their systems or whether they prefer to fade away in splendid isolation. If in favor of getting help, they might as well start early, and so that their future nurses will at least understand them ... when they need to go.

From the perspective of the donor country—in this case, the country supplying the workforce—a brain drain should not pose any problems, unless it were to be accompanied by a heart drain. That could cut the ties with home and stop the remittances as well.

From the perspective of the recipient country, immigration should help citizens raise their quality of living to a standard fitting their level of income. A rich country where people with high incomes can afford to pay four dollars for a latte but cannot afford to pay someone to help them with the housekeeping has not begun to optimize its economy yet.

Donor countries should also consider how to prepare their workers before their landing, teaching them foreign languages and providing them with an understanding about how the work they are supposed to do is normally done. This will help ensure that they get off to a flying start and will be saved from some of the hardships of life in a new land. Of course, this will also accelerate and increase their remittances.

Recipient countries should be contemplating how to maximize the economic return of an imported workforce by ensuring that it really complements its own workforce or, when it doesn’t, that it at least generates important fiscal savings that allow some benefits to trickle down to everyone.

Both types of countries should be thinking urgently about how to get the programs going. In this respect, one must remember that just as it is extremely difficult to guarantee the behavior of any individual it is fairly easy to establish some measurable parameters for an entire group. This, by the way, is exactly how the insurance industry works.

I do not intend to preempt the imagination of willing and inspired immigration-program designers but, for them to have a real chance of success, no stones should be left unturned.

The complete identification and real-time knowledge of the whereabouts of all immigrants in a formal program is something that could be discussed, no matter how much some libertarians scream. If a future English king can accept having a tracking device implanted for safety reasons, why should an immigrant object to it, if that is what his host requires to give him a chance? I am sure most immigrants would consider this somewhat exaggerated concern about their persona blissful when compared to how they frequently are ignored by their own countrymen.

If the program is temporary, perhaps it would gain a lot by forcing workers to deposit a percentage of their earnings in a savings account that will be released only if they comply with the program and return when time is up. Insurance companies will be able to provide any individual worker with protection against losing his savings, if destiny decrees that he (or she) fall in love, for instance, and never return.

Both donor and recipient countries should also have the direct costs of the programs reimbursed, but this should not be hard to achieve. Just consider the savings an immigrant will realize by going legal. The financial consequences for donor countries of educating its people and then losing them in the brain drain could also be taken care of, for example, by ensuring that education programs are duly repaid by the immigrants, with their new formal employer withholding part of their salaries for this purpose.

Program designers should consider how to maximize their economic efficiency. Although nurses might be what a recipient country needs, it should not allow these slots to be filled up by doctors, as currently happens when Filipino doctors find it easier to get into the United States as nurses.

The programs need to be credible, and both donor and recipient countries should make compliance with the agreed rules an absolute must. Clearly, an immigrant who misbehaves should be named and shamed and made aware that he is hijacking the opportunity of one of his countrymen.

The days when a Swedish mother[1] felt that watching her son board a schooner to America was like burying him alive, are—thank God—gone forever. Nevertheless, many current illegal immigrants do not dare go home, as they cannot afford the risk, cost, or logistics of another illegal entry. They are living in a de facto prison. The programs, although welcoming video conferencing and Messenger technology, need to stimulate frequent home visits, in order to keep the hearts warm.

The world should also not ignore the tremendous capacity building which immigrants can bring to their own homeland—for instance, by the way they direct remittances or by the way they convey to their countrymen some know-how about current best practices for good governance.

Traditional economic analysis about how to produce something for which a market needs exist starts by looking for the best mix of labor and capital. Aligned with such thinking, the world wisely decided that it would benefit from free trade and proceeded to open up markets and mobilize capital resources on the belief that the whole world is our playing field. Unfortunately the payoff, although great for some big winners, has not been distributed equitably—perhaps exactly because the world has not investigated new means to mobilize labor.

One does not have to be an economist to perceive the economic growth potential of massive legal temporary immigration plans. Travel, language laboratories, employment agencies, restaurants (where the wealthy could find more time to dine, thanks to their new housemaid) and, of course, all those remittances that—one should never forget—are immediately recycled into the world’s economy.

Investment in globally mobile brainpower and skills is a good option for many developing countries—especially when compared to the alternative of having everyone competing against one another in the rat race of agriculture and manufacturing. To make the most out of their investment, donor countries need to consider demands, as it is clear that a certified bilingual nurse stands a much better chance of repaying her education costs than all those economists and engineers you find driving taxis in New York.

It is not only the developing countries that are affected by a kind of negativism in relation to outgoing labor mobility, as a five-minute search on the Web would confirm. Just the title of one Canadian article—“Are we losing our minds?”[2]—seemed to say more about the state of mind of the debaters than of the pros and cons of the issue itself.

Many are confused about the consequences of receiving a massive number of guest workers, and they clearly need to be better informed. Even such a highly reputed academician as Samuel Huntington (Foreign Policy, March/April 2004) gets all tangled up when on the one hand he worries about the sheer volume of Latin American immigration, but on the other begs immigrants to learn to dream in English—something that could classify only as an incurable heart drain. He forgets that if he really does not want them in his land, then they better keep on dreaming in Spanish and keep alive their hopes of going back home.

Labor unions might also be a bit confused. Unions played a vital and historic role in developing, while defending the weak, many essential safeguards that guarantee basic justice in our modern societies. But after a certain wealth plateau was reached, dynamic modern societies outgrew them, and some may have ended up doing more harm than good. Early retirement must be hard on many unions, but if I were in charge, I would see immigrants as my new market and jump at the opportunity to get back into the game.

The global implications of a shrinking world on all its common goods is changing political realities, as for example when the sovereign rights to clean air are proved incompatible with the sovereign rights of airspace. In the same vein, it might not be long before we hear from immigrants, with their power to vote with their feet and with their remittances, the cry of IMMIGRANTS OF THE WHOLE WORLD—UNITE!

Maria Full of Grace, a film about drug trafficking, illustrates how horrors surge when the supply is not allowed to satisfy demand legally. The same movie has a scene in which Carla, one immigrant woman, describes her feelings when she collected her first salary in the United States and ran to the bank to wire most of it to her family at home: Her heart felt too large for her body. We should remember these feelings when discussing remittances in order to remember their true nature. Remittances are not just cold financial cash flows to be taken for granted and securitized; they are human offerings of deep significance, for giver and receiver both. As such, they deserve a lot of respect.

Shall we keep the barriers to migration entrance impossibly high? Well, if you want to look at it from a Darwinian angle, you might make a case for allowing only the fittest and strongest to pass, like salmons going upstream. Nonetheless, the realization that the primary driver of emigration is despair—which might not be the best basis for moving the world forward—would indicate that reasonable, accessible, and equitable temporary immigration programs might be the best long-term alternative. Also we should not ignore the possibility that those who stay behind might turn out to be the truly strong, being able to make it anywhere.

Growing worries about the lack of employment opportunities are just the tip of the iceberg. To paraphrase the Bible, if “give jobs unto others and jobs will be given unto thee” is true, then the world must change its glass-is-half-empty perspective on immigration, unleash its imagination, and launch massive “Brain-Circulation-With-Hearts-Firmly-Kept-At-Home” temporary immigration programs.
[1] Attributed to Johanna, the grandmother of Vilhem Moberg (1898–1973), the author of a famous four-novel series about the emigration from Sweden to the United States.
[2] Mahmood Iqbal, “Are we losing our minds?” in Policy Options, Sep. 1999, pp.34–38.
Extracted from Voice and Noise 2006

“A letter to an another new American World Bank President”
Dear Mr. Wolfowitz:

Finding growth is not easy, but we might at least suggest two principles for those taking on the quest. The first is to look where there is a better chance of finding the source of growth. A review of global production over the last decades makes it clear that the importance of agriculture and manufacturing in the GNPs is going down while services go up. So, if development plans are developed without a priori shackling them to potential losers, some countries might stand a better chance of making it.

We already observe how the remittance flows from migrant workers in the service sector to the developing countries exceed foreign-aid flows and there are many other similar opportunities waiting to be mined, such as offering medical and old-age care at lower prices to the developed countries’ otherwise financially unsustainable social-security systems.

Second, we must not worsen the emergency by panicking and setting up unreasonable timelines. As an example, perhaps the Millennium Development Goals (MDGs) help to focus attention on truly important issues, but by introducing a deadline, 2015, they could also be inducing everyone to run towards a final goal when in fact we cannot realistically even begin to dream of completion of development and poverty reduction.

The “brain drain” in the health sectors of sub-Saharan Africa illustrates the problem, as it is frequently presented as a major obstacle for reaching the MDG in 2015 while, without the distractions of a goal-line, it might instead be recognized as an opportunity to channel developing funds into schools for nurses and doctors. Educated nurses and doctors, even working abroad, might, if “heart drain” is avoided, return to their country, sooner or later, and provide it much more capacity and long-term sustainability than the continuance of foreign aid.

Monday, April 10, 2006

'American Union' passports could work

Sir, It is sad in today’s globalized world to still find so many local Americans who believe that when they ship a criminal band member over the border, to someone much less resourceful, they have gotten rid of their problem. 

In this respect, Jacob Weisberg, ("Immigration ideas bordering on perverse”, April 6), aghast with the current ideas on immigration law reform in the US, proposes not passing any reforms but to keep going as if nothing’s happening. 

Another more transparent route would be to bite the bullet and accept that an “American Union” between North and Central America already exists, de-facto, and issue a common passport for all the citizens of the enlarged American Union. 

Such a strategy would make it possible for many of the over 11 million illegal immigrants that dare not leave the US because they do not know whether they can later return, to be freed from their (also de-facto) mother of all jails, and go home, even on a temporary basis. 

It would also help to realize that had the US spent an Iraq-war sized budget assisting Central America, as the European Union did with Spain and others, the whole immigration debate could have been a moot issue, with exception perhaps of all the aging baby boomers moving south to find care and services. 

Finally, the fact is that when you see how all the Central Americans toil away in the US and help their families back home, you have to ask yourself whether this is not just part of the process whereby the US manages to renew its working and family ethics, in order to remain strong.



Thursday, July 15, 2004

McPrison

Justice is something very difficult to understand with precision, since it is situated along a continuum that becomes finite only when it reaches Divine Justice. On the other hand, injustices are much easier to identify and, in our countries, prisons themselves represent one of the greatest injustices. In terms of the use of scarce resources, as an economist I am convinced that justice would today be much better served by improving prisons than by investing in Supreme Courts.

I am not advocating, nor do I believe in, imported solutions. Moreover, if we were to respect individual rights defined as extravagantly as possible, for example, by guaranteeing in Venezuela access to justice similar to that O.J. Simpson had access to a few years ago in the United States, this would, because of the cost involved, be an affront to our human rights, collectively.

Nonetheless, I believe in good examples, and I am sure that if prison franchises could be established in our countries we would all reap the benefits, as we are shamed into reforms.

When we read that one factor making it particularly difficult for Schwarzenegger, the new Governor of California, to balance his state’s budget is the 28,500 dollars he has to spend each year on each of his 162,000 prisoners and that one of his options would be to use local private prison services, which would allow him to cut the cost to 17,000 dollars per prisoner per year, we see an opportunity.

If California wants to save even more, it could do so by letting our countries offer prison services for some of its prisoners. Companies could build and operate prisons and would have to apply ISO 9000-type quality certifications. This would probably generate a set of global good prison practices that would benefit everyone. Nowadays, rapid transport and facilities such as videoconferences should make such proposals much more feasible. All that’s lacking is the will to carry them out.

Since some people trace the origin of the violent maras (gangs) of Central America to Los Angeles, and since crime is to some degree attributed to the violence in films, perhaps California, its Governor, and even Hollywood all have a special motivation to welcome an initiative such as this one to help us help them.

Besides, Schwarzenegger’s experience in the movies alone, which ranges from subduing criminals by force to teaching kindergarten, would seem to fit the ideal resume for a real super prison keeper.

P.S. I just read in the press that Schwarzenegger refers to his experience in Kindergarten Cop as useful to handle the legislative branch in California… OK perhaps for that too.

Translated from El Universal, Venezuela, July 15, 2004

Saturday, July 3, 2004

Some notes on the securitization of remittances

Some financiers have come up with the idea of using the future growing flows of cash from workers remittances to create values that could be used as collateral to loans made to those foreign banks that are specializing in processing these transfers. Since these collateral accounts are located in the financial centers, the loans so backed carry a lower interest as they manage to avoid some of the country-risk margins.

There is nothing illegal with this securitization as clearly the transferring bank is in no obligation to deliver exactly the same physical funds received; in fact, he will normally be delivering local currency to the beneficiary. Also the bank is never released from its obligation to transfer the worker’s money to the family back home and all the bank’s general funds, including those received from the loans, should back up its commitment.

Nonetheless perhaps we should ask ourselves whether the fiduciary duty of the transfer agent is being fulfilled when this securitization occurs, especially since the foreign worker trying to send money home is in blissful ignorance of the arrangements.

Also when you walk into a bank and order a transfer of money to someone, you presume that the bank will execute the transfer as expeditiously as possible, and never would you imagine that it could be delayed by having to go through a collateral account or, God forbid, that the final beneficiary never receives your funds, because the collateral was seized and sold to satisfy the claims on the local bank.

Any problem that would occur with a securitized remittance, besides dramatically increasing the cost of that particular transfer, could lead to a worldwide scramble back to more “trustworthy” informal channels … and we do not need that.

Also, if one of these collaterals was executed, in what jurisdiction should a foreign worker and his beneficiary complain … are they also released from country risk?

Credit rating agencies and the securitization of remittances

It is to be expected that when the country or the bank through which the remittances are sent enters into problems, these will stop. Emigrants are far from stupid. As we also know that the collaterals built around these remittances cover basically only the current service of the loan, a minor part, some doubts remain as to why then the ratings by the credit-rating agencies improve so much. Are we not here facing exactly the type of systemic risk that I frequently observe could be present by using few opinions of credit-risk agencies as proxies for the real market?

The first time I heard about the securitization of remittances I thought “How creative, I have heard about securitizing accounts receivable but this is the first time I see it done with accounts payable”.

Keeping them stupid?

Based on the argument that workers do not have as much information and do not react as fast in a crisis, we can frequently hear the opinion that the securitization of worker remittances is better and more stable than that of general company remittances. This might very well be true for the time being, but it sure feels sad to get involved in programs that are based on keeping the workers in the dark.

Thursday, February 26, 2004

The prisoners, the old, and the sick

We read that in the United States there are approximately 2.2 million people devoted to capturing and keeping behind bars two million prisoners. Imagine what capturing even 1% of that market (22,000 prison inmates) would mean to any small developing country.

The elder-care industries are another buoyant market in increasing demand in developed countries, as young people are becoming proportionally fewer than the old. This is also the case of the extended-care industry, where continuous medical advances seem to generate almost infinite demand.
It is therefore strange that developing countries give so little attention to these services when negotiating their trade agreements, considering their currently competitive wages. On the contrary, these same countries are forced to open up their own service sector for banks, insurance companies, auditing agencies, and so on.

Consider, for example, the potential economic impact on a poor country of a school that annually graduate several thousand excellent bilingual nurses to work around the world or in their own country: this could surpass the benefits that a trade treaty would provide to the agricultural and manufacturing industries combined. What’s more, the nurses would likely be able to pay off their student loans more easily than economists like me.

At this point, Jim, my editor, raises all type of numerous obstacles that he urges me to consider before my readers do. I: “Dear Jim, the Washington Post recently reported about an open-heart surgery that was budgeted at an unaffordable 200,000 dollars in the United States, but then finally carried out, successfully, in India, by doctors educated in the United States, for only 10,000 dollars, an airplane ticket, and a little side trip to the Taj Mahal included. The tide of globalization is unstoppable, unless you prefer your open-heart patient to stay home and die. As Jim also mentioned the hurdles of language, I also found it timely to remind him of the call centers in Bangalore where all those modern switchboard ladies that answer your information needs on the phone day by day are speaking better and not at all phony English. I have also read somewhere something to the effect that lately, the true defenders of true British English, are all from India.

Also, given the tensions caused by millions of people looking to emigrate any way they can to the labor markets of developed countries in order to send remittances back to their families, it is surprising not to hear that the best way to prevent illegal immigration (which is often destined one way or another to caring for prisoners, the sick, or the old) would be to send this very clientele to developing countries where they could be cared for.

A real opening up of services would give poor countries access to sources of sustainable economic growth, while at the same time relieving the financial pressures on developed countries of attending to prisoners, the old, and the sick—pressures that threaten the fiscal sustainability of their own welfare economies.

Are these new ideas? Not at all! Henri Charriere (nicknamed “Papillon”) was sent to French Guiana as a prisoner, and Australia was founded by exported convicts. There are already European governments that one way or another pay for their old people to stay in places like the Canary Islands and history is full of examples of people who had to go to other places because of diseases like tuberculosis or leprosy.

From El Universal, Caracas, February 2004

Thursday, August 14, 2003

Family Remittances

In recent publications of the World Bank and other multilateral organizations, there has been emphasis on the significance of family remittances for many developing countries, such as El Salvador, where these remittances reached $1,900 million dollars in 2001. This phenomenon has many bankers scrambled, trying to find out ways to attract part of the financial gains that such an influx represents, ranging from transfer services to the issuance of bonds backed by the projections of future remittances.

Likewise, they are studying the impact on a poor country when hundreds of thousands of its workers could be sent to developed countries on a temporary visa, where they could have access to greater remunerations which could even have a greater economic potential than the long-promised agricultural openness and liberalization.

After allowing their markets to be captured by external suppliers, after allowing free flow of resources, after forcing themselves to respect foreign income sources, such as intellectual property rights and patents, and finally, after many of its educated professionals have been captured by better economic gains somewhere else, poor countries, it would seem, have all the reasons to request greater access to global markets for their unskilled workforce.

Nevertheless, during our technical discussions, we should not forget the human aspect of migration, with the enormous incurred sacrifices and the generosity with which immigrants share their income with family members who were left behind. It has been more than 150 years since big groups of Europeans had to emigrate due to famine in their countries, among other reasons. They left their homes knowing that they would not see their parents, siblings, and everything they had known and cherished in their life. Even though today’s emigrants have in general greater possibilities of returning to their home countries, their vicissitudes are not necessarily negligible, since they are frequently victims of rejection and marginalization.

In this sense, all that is left to do is to stand in awe while observing the significant amount of transfers that Salvadorian emigrants, among many others, send to their homes nowadays. These are only one example of family values, traditions, and solidarity that our countries still possess. They might be poor in monetary terms, but thank God these countries are rich in human, family values.