Remittances Add Up in Underdeveloped Countries

Every morning before the sun is up, Moises is on his feet, looking for work at the corner of University Boulevard and Piney Branch Road in this Washington, D.C. suburb. If he can make enough money today for rent, Moises, 23, will save tomorrow's pay and send it home to his family -- two parents, a brother and a sister in El Salvador (search).

"Sometimes you have good luck, sometimes bad luck," he said, waiting in the employment line with at least 50 other immigrants at a local community center, Casa de Maryland. Good luck means $400 a week, with as much as a third sent home.

That money can add up.

The World Bank said this month that money sent home by immigrant workers has become, along with direct foreign investment, one of the two most important sources of income for developing countries -- even more important than private loans given by commercial banks to national governments.

India (search) and Mexico (search) topped the World Bank (search) list, receiving $10 billion and $9.9 billion in 2001 from expatriates around the world, while El Salvador was 11th on the list, getting an estimated $1.9 billion.

Over the years, workers from these countries have become a vital resource to developing countries, says Dilip Ratha, a senior economist at the World Bank.

"It's not like a private loan where money has to be paid back after a time," Ratha said. "The money directly helps people in buying food, education, house improvements . . . and there is no expectation for paying back."

The steady flow of cash is also key for developing countries because of its stability, said Damian Milverton, a World Bank spokesman.

"If you think of what happened in the Asian economic crisis, that was largely a result of investors who became panicked and rushed out their money," Milverton said. "When someone in the U.S. sends their paychecks home, they don't care if the dollar is going up or down. They just wantthat money to get home."

That has been the case for the last 17 years for Mauricio Umana, 50. When he first came to the United States, the carpenter left two sons, now ages 25 and 29, behind in El Salvador. One is lame; the other has diabetes. And so Umana sends them around $5,000 each year to help with medical bills and supplies.

"They can't work, so I send money," he said in Spanish.

At Casa de Maryland, director Gustavo Torres sees 80 to 100 new immigrants every week. Most are men, many are illegal and all of them want jobs, Torres said.

At the organization's employment center near Langley Park, immigrants line up as early as 5:30 a.m. for a chance at the "tambola," a machine that looks like a tumbler for lottery numbers. Each worker picks a number from the tambola, and when employers come looking, the lowest numbers win a day's work.

"We put maybe 112 people on the list, but usually only about 29 jobs come in a day," said Klondwossen Workalemahu, who cranks the tambola.

"Before, when we didn't have the tambola, people would come here and sleep overnight to be first in line."

The jobs are mostly day labor in construction, cleaning or landscaping. Average hourly pay is $6 to $7 for unskilled labor and $10 to $12 for workers skilled in carpentry or painting, said one construction foreman who showed up at Casa de Maryland looking for workers this week.

Even at those wages, many manage to save a couple hundred a month to send home. Moises has been able to save money by sleeping on a friend's sofa for $100 a month. Last Christmas, he was able to send his family $225.

"The way they save money is they work two or three jobs and live three or four families together," Torres said. "Some send $100. Some send $500."

Torres himself sends around $350 a month to 11 family members back in Colombia. "They use it to pay bills, for medicine, to pay rent, put food on table," he said.

But he believes that money could have an even greater impact if it were put into development projects in the immigrants' hometowns. Many immigrants come from the same town and settle in the same neighborhoods when they arrive in America.

A Mexican program called Tres por Uno, or Three for One, puts up three pesos of government money for every peso that emigrants send home for community projects. Torres said he hopes to get workers at Casa de Maryland to begin thinking about such communal uses for their money.

"Right now, we send a little here and a little there, but if we invest that kind of money together, we could build electrical projects, small businesses, a lot of things," he said.