In Mexico, Money From Relatives Abroad Dries Up

Sophia Tareen and Julie Watson, AP, January 23, 2009

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Money sent from immigrants working in the U.S. to their home country is Mexico’s second-largest source of foreign income after oil.

But that funding source dropped 2.2 percent in the first half of 2008, according to a report from the central bank. One of Mexico’s largest banks said this month that it expects an overall 2 percent decline to $23.5 billion when the final 2008 numbers are reported Wednesday.

As the U.S. recession deepens, Vargas is among a wave of immigrants who have cut back on what they send home–resulting in what’s expected to be the first annual decline in so-called “remittances” to Mexico since the country’s central bank began keeping track of payments 13 years ago.

The thousands of dollars Vargas has sent to Iguala, Mexico, during the past 17 years have allowed her parents to finish building their three-bedroom house and her mother to see a private doctor instead of going to one of Mexico’s overcrowded and often inept public clinics.

Vargas remembers a time when she could send up to $500 a month. Lately, it’s just $50 to $80 here and there.

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In the lush mountain city of Iguala, mango, orange and other fruit trees grow in abundance, but people struggle to make ends meet. Vargas’ father, Alberto Rodriguez, 56, has not been able to find a job in more than two months.

The construction worker used to have steady work in the city, where rebar protrudes from the tops of cinder-block homes that are built in stages as money arrives from family members in the U.S.

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Long lines of families waiting to pick up remittances at Western Union have all but disappeared.

“The migrants used to send back money to their families, who would hire someone to build a second floor or paint their houses,” Rodriguez said. “But now everyone over there is losing their jobs, and down here the jobs are disappearing as a result.”

Rodriguez and his wife, Magdalena Jimenez, 56, live off money earned from selling candy, cigarettes, sliced cucumbers with chile powder and other snacks to workers on shift changes outside a local factory.

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