September 18, 2006
Some 200 million people, or 3 percent of the world population, have fled their countries, sending $250 billion in remittances in 2005, says Investor's Business Daily (IBD).
In other words, countries are substituting emigration for economic opportunity and bad governments are enjoying the incoming cash as a reward for irresponsible governance, says IBD. Remittances beef up their foreign reserves, giving the effect of export and tourism earnings, or foreign investment. It also lets them spend freely.
According to World Bank estimates, remittances have reached record highs, often exceeding foreign investment, and have siphoned off the best and brightest from their countries. Consider:
- Mexico alone is on course to take in $24 billion in remittances in 2006, a 20 percent increase from 2005, from about 5 million immigrants sending cash back.
- The Philippines is expected to take in almost $12 billion in remittances from 8 million émigrés, 11 percent higher than last year.
- In the Dominican Republic, the $2.4 billion in remittances it receives are 50 percent larger than total exports, distorting the nation's economy.
- Zimbabwe has 80 percent unemployment, 1,200 percent inflation and as many as 90 percent of its college graduates working abroad; half the population depends on remittances.
The United Nations -- the leader in touting international migration -- seem to think the West has a duty to provide jobs for every citizen in a failing country that refuses to develop itself in wealth-creating ways, says IBD. But this is essentially a wealth transfer from the West that props up failing states with little regard for economic development or human rights.
Source: Editorial, "Modern Chattel," Investor's Business Daily, September 18, 2006.
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