The global financial crisis is forcing emerging and underdeveloped economies throughout Latin America, Africa and Southeast Asia to take a double whammy. Economic instability and corresponding job losses at home are compounded by a severe decline in remittances from the migrant workers who serve as a super-exploited segment of the working class in the industrialized capitalist economies of the United States, Western Europe and Japan.
Remittances are sums of money sent from individual migrant workers to their families and friends in their country of origin. The combined remittances of all migrant workers provide a substantial boost to underdeveloped economies. An estimated 150 million migrant workers worldwide sent more than $300 billion home to their families in 2006.
U.N. International Fund for Agricultural Development statistics show that in 2006 remittances made up as much as 3 percent of the gross domestic product in Mexico, more than 12 percent of GDP in the Philippines and 21 percent of GDP in Haiti. Remittances accounted for a staggering 30 percent of GDP in the Palestinian territories of the West Bank and Gaza.
Mexican remittances have taken a significant hit as the impact of anti-immigration hysteria in the U.S. intersects with the financial crisis to severely reduce job opportunities for Mexican migrant workers.
Remittances are Mexico’s second largest source of foreign income after oil. Remittances dropped from $26 billion in 2007 to $25 billion in 2008. State repression of undocumented workers in the U.S., along with militarization of the border and the downturn in the U.S. construction industry, all contributed to the $1 billion decline.
The Philippines’ economy is being negatively affected by a contraction in exports and a decline in remittances. The World Bank has projected a 1 percent decline in Philippine exports this year. More than 8 million Filipinos work overseas in countries such as the U.S., Saudi Arabia and Japan.
A Nov. 8 article by Rosario Bella Guzman, the executive editor of the research group Ibon Foundation, makes the point that though the number of people from the Philippines working in the United States won’t necessarily go down, they may be fired and then “rehired in cheaper and lower quality jobs as the US economy continues to reel from the crisis.”
Guzman added that it is likely that “remittances will slow down due to falling and negative incomes and social services, and mounting debts in the host countries, particularly the United States.”
African workers emigrate in significant numbers to countries of former European colonial powers such as France, Great Britain, Spain and Italy as well as to the U.S. There is also a significant amount of intercontinental emigration among African countries. Total remittances to and within Africa are close to $40 billion for an average of about 5 percent of GDP for countries in the region. According to World Bank estimates, remittances to sub-Saharan Africa are set to fall in 2009 for the first time in over a decade.
The global financial crisis and the subsequent decline in remittances and exports contribute to the political and economic crises in underdeveloped countries all around the world. These conditions call for even greater solidarity from workers in the U.S., Western Europe and Japan as part of a struggle to stop any attacks on immigrant workers.
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