Immigrant Workers Send Home Billions Eclipsing All Government Aid

Immigrant Workers Send Home Billions of Dollars a Year, Eclipsing all Government Aid

Remittances from workers abroad eclipse all foreign aid. In Oaxaca, one man's labor in California may help transform an entire pueblo.

SANTA MARIA AYOQUEZCO, Mexico (By Richard Boudreaux, LATimes) April 13, 2006 — The prickly plants started in Catalina Sanchez's garden and now stretch across her neighbors' fields as far as the eye can see. They pop up on acre after acre as word gets around: This village of dirt floors and outdoor toilets expects to get rich exporting cactus.

The seed money comes from men who couldn't make a living here and left for California, the idea from one of the women they left behind.

As their corn crops failed in thinning soil, a generation of men migrated to pick lettuce in the Salinas and San Joaquin valleys. The cash they wired home bought food, but little hope for a better life.

Then Sanchez got busy in her backyard. She started plowing her husband's wire transfers into a waist-high patch of nopal. The paddle-like cactus leaf has a succulent taste and, she suspected, a market far beyond impoverished Oaxaca state. Soon other peasant women joined her, investing cash from their men in California.

Two thousand miles away, Erasmo Alonzo imagined that the wages of his back-breaking labor were buying a TV, a washing machine and indoor plumbing. On his first visit home, "he did not find any of those things," Sanchez recalled. "Look outside," she told him, proudly pointing to her rows of nopal. "That is our future."

With additional financing from migrants in California and the Mexican government, Sanchez's co-op is building a food-processing plant that will employ dozens of this Zapotec Indian community's 5,750 inhabitants. Starting this summer, the co-op's 134 growers plan to supply 10,000 1-pound jars of organically grown, pickled cactus each week to an expanding specialty-food market in the United States.

The venture is a village-level display of the power of remittances, the billions of dollars that migrants earn in rich countries and send home to sustain their kin. It is part of a search by struggling communities, international aid agencies and governments for ways to harness this flow to alleviate the poverty that drives people to migrate in the first place.

Migrants have been sending money home, in one form or another, for centuries. But only recently have economists recognized its significance. Today, remittances are the largest, fastest-growing and most reliable source of income for developing countries. Poor nations received $167 billion from overseas workers last year, according to the World Bank, more than all foreign aid.

This giant transfer of wealth crisscrosses the Earth in millions of trickles, a few hundred dollars at a time, sent by workers who have assumed much of the burden of Third World development. Their remittances _ private aid from the poor to the poorer _ offer a rare chance to accumulate savings; invest in schooling, housing or a small business; and rise into the middle class.

According to the World Bank, the number of international migrants swelled from 120 million to 175 million during the 1990s, and the sums they send home each year have more than tripled in this decade.

"Close to a billion people, one in every six on Earth, may receive some support from this lifeline," said Dilip Ratha, a senior World Bank economist. "The scale is huge, maybe bigger than we think, and potentially transforming."

One end of the lifeline is the field near Salinas where Erasmo Alonzo started work before dawn one morning.

For eight years, he had been stooping over those fields for up to 10 hours a day, reaping a chronic back pain that felt "like an ugly wound." But on that July morning, he moved as nimbly as his youthful co-workers as they extracted row after row of lettuce from the soil with 12-inch knives.

Alonzo had been off the day before, a Sunday, and devoted part of the day to the ritual that defined his purpose in America: wiring money home to Mexico.

"It is a struggle to get a decent amount together, but I send $500 every two or three months," he said. On this Sunday, he had wired home $200 and paid 10% in commission to a licensed agent of AFEX, a worldwide transfer company.

Fed by millions of such transactions, Mexico's annual remittance inflow has doubled since 2002 and reached $20 billion last year, second only to petroleum as a generator of wealth for the country.

Other developing nations also depend heavily on their migrants' money. Brazilian laborers in Japan send home more than $2 billion a year, out-earning their country's coffee exports. Remittances bring in more than tea exports do in Sri Lanka and tourism in Morocco.

Remittance income is growing fastest in Eastern Europe, a trend that quickened last year as Britain and Ireland eased curbs on the entry of migrant laborers.

Britain has absorbed more than 130,000 workers from Poland alone. They arrive hourly at London's Victoria Coach Station and on budget airlines to work as builders, plumbers, electricians, factory hands, housekeepers, gardeners, ship assistants, dishwashers and bus drivers.

Unlike foreign investment, most of which goes to a few big emerging markets, remittance flows are more evenly distributed and far more stable.

"They tend to increase at difficult times _ during an economic downturn or after a natural disaster in the migrants' home countries _ when other private capital flows tend to decrease," said Ratha, the World Bank economist.

But in many places, the money also breeds wasteful consumption, inflated real estate prices and a widening income gap between those who receive it and those who do not.

Economists say remittances have brought uneven and sometimes fleeting benefits because many governments fail to apply well-known fundamentals of development: delivering more public services, schools and hospitals to poor regions; and making banking services and credit more widely available.

"So far, the success stories about remittances are individual, not collective," said Manuel Orozco, a Georgetown University economist who tracks migrant money to Latin America. "They can keep a lot of people from falling deeper into poverty, but unless a government does the right things, they won't lift many into the middle class."

Families in Ayoquezco have grown and eaten the nopal cactus since pre-Columbian times. It sprouts quickly and abundantly, producing up to four harvests a year. Its fiber-rich leaves, which taste like okra when pickled, enhance the flavor of traditional dishes. Some swear it can cure diabetes.

Every Tuesday and Friday, women haul sacks of freshly harvested nopal leaves by bus from Ayoquezco to market in the city of Oaxaca, 40 miles north. Arriving well before dawn, they flick away the spiny skin with box cutters and seal slices in plastic bags for restaurant cooks and other buyers. The 16-hour ritual earns each grower about $200 a week.

That was the best they ever hoped for, until Catalina Sanchez came home with an idea.

Sanchez, 47, is a petite dynamo whose brisk forays through her field leave her cotton blouses speckled with cactus juice. Co-workers describe her as a natural leader with infectious energy and a wisdom that belies her first-grade education.

She has scraped for a living all her life, earning just enough from selling nopal to supplement her husband's remittances. When he was injured, she joined him in California in 1998 and worked the next three lettuce seasons.

One by one, the couple's two sons and two daughters joined the seasonal clandestine treks to California, picking lettuce for $7.29 an hour and contributing to the family's $800-a-month apartment in Salinas.

The potential of her garden back home dawned on Sanchez one day in Salinas when she noticed a jar of pickled California nopal on a supermarket delicacy shelf. It had never occurred to her that nopal leaves could be preserved; in her village they are eaten fresh.

She bought a jar and tasted. Too bitter, she thought. Sanchez realized that her village could tap into a growing market for something migrants crave _ food from home _ and create enough jobs to lure some of them back. The U.S. is home to 27 million people of Mexican origin, 1.5 million of whom are from Oaxaca.

"When your whole family is away, you feel alone and sad," she said one day at the market in Oaxaca, peeling cactus on her stool without looking up. "They leave to seek a better life, but a lot of things can go wrong up there. My wish is to have them all home, each with a little job, a dignified job. Every mother here feels the same."

Returning from California, Sanchez organized the Women Nopal Bottlers of Ayoquezco with help from two lifelong choir mates at the Roman Catholic Church of the Nativity. The co-op grew quickly and caught the attention of Roberto Ramirez, director of the Foundation for Productivity in the Countryside, a Mexico City-based nonprofit agency.

Ramirez put the cactus growers in touch with two Ayoquezco natives active in California immigrant networks _ Candida Hernandez, a North Hollywood cook, and Felix Cruz, a factory quality-control supervisor from San Marcos in San Diego County.

Ayoquezco's home-bottled nopal sold briskly at a Oaxacan festival in San Marcos, prompting Hernandez and Cruz to form Chapulin Distributors Inc. to import and market the product.

That led to a deal, brokered by Ramirez, giving the growers 61% of the equity in a joint venture, Chapulin 34% and the foundation 5%.

For all its promise, the enterprise struggled. Ignorant about banks, the growers turned to the government for help. The village mayor reluctantly agreed to extend municipal water pipes to the site of the nopal processing plant, then charged the growers $7,500. It has taken the women more than two years to secure government financing, but the $1.5-million plant is finally nearing completion in an abandoned cornfield.

The sight of rising concrete walls has set off a wave of expectation, altering the life of a village with no other industry. Cactus growers switched to organic farming to open a wider U.S. market niche. Dozens of farmers not in the co-op began planting nopal, hoping to join and share its profits.

Women have remained firmly in charge of the factory, which is due to start production in June with 32 employees. Ramirez said the business projected $2.4 million in sales and $535,000 in profit in its first year of full operation and was expected to generate an additional 210 jobs in the community.

To the pioneers of the nopal project, its success will be measured by the answer to one question: Will it reverse the flow of migration?

The women of Ayoquezco are optimistic. If the enterprise prospers, says Asela Barrios, her husband will quit picking strawberries after 17 seasons in Salinas. Sara Natividad Lustre Martinez says her brother, who manages a garlic warehouse in the Cental Valley town of Huron, also wants to come home. Erasmo Alonzo, 60, whose wife inspired the venture, came home to stay in late 2004 and recently became chief inspector of cactus grown for the plant. His wife is chief of sales. But their family is still divided; their four children remain in Salinas.

"We live in two worlds now," said son Armando, 23, during a trip home. "A job at the new plant will be fine for those who have never worked up north. But I can earn $100 a day up there. Here I would earn maybe one-tenth of that."

A pained expression crossed their mother's face.

"Maybe my children are already too old to benefit from what we are building," Catalina Sanchez said. "But their children and other children can finally grow up with this dream, the promise of a decent job right here at home. They should never have to think about leaving."