Sending money home

The vital role of workers who send their money home to Latin America and how they can create a "brai

Bolivian President Evo Morales and the Latin American community in Europe are among opponents to new European legislation affecting the rights of migrants in the EU. Morales described the Returns Directive, which allows extended detention for undocumented workers and a Europe-wide ban on re-entry, as ‘draconian’, and Amnesty International have expressed deep disappointment the Directive was passed.

This is not only a human rights issue. It also raises concerns about the impact of restrictions on the ability of migrants to contribute, through their remittances, to the development of their countries and communities of origin.

In 2007, Latin America and the Caribbean countries received $66.5 billion in remittances from the US, Europe and Japan – more than they received from Foreign Direct Investment and Official Development Assistance combined. About 15% of remittances come from Western Europe, including the UK (which ranks third after Spain and Italy). These are important for the livelihoods of many Latin Americans, particularly the women who are the main recipients and who spend most of the funds on basics, such as food.

Remittances to the region have slowed in the current economic downturn and the credit crunch is taking its toll. Spain is now the source of 36% of all remittances to Bolivia and is soon expected to surpass the US as the main source of remittances for the Andean Region. The property slump is hitting many migrants working in Spain’s construction sector, and this has a direct effect on remittances to Latin America.

While this is a problem for a country like Bolivia, it is not yet cause for wider alarm. Most remittances to the region go to Brazil and Mexico, but unlike the poorer economies in the region, they account for just 1.1% and 2.8% of GDP, respectively.

Rather than focusing on the source and amount of money, important though that is in some countries, regional policy-makers could focus on good practices in the use of remittances to promote pro-poor growth and local development. Mexico’s 3x1 para Migrantes progamme, for example, encourages migrants to invest remittances in local development initiatives by matching their contribution with funds from the municipal, state and federal governments. This has the potential to harness the funds to benefit the local community, and reverse the vicious migratory pressures that force Latin American and Caribbean men and women from their countries.

Even if a migrant’s remittances are reduced in the current economic and anti-immigration climate, both governments and the private sector should focus on ways to take advantage of the intellectual capital that migrants gain in their host countries. There is little talk of initiatives to benefit from the brain gain in the present debate, which still revolves around the notion of a brain drain. Latin American embassies could convene scientists and entrepreneurs among their diasporas to gather knowledge that could benefit national development. Government could provide incentives for entrepreneurs to set up new enterprises, based on the innovative ideas or technologies found in developed countries. And civil society organisations and the private sector could foster cross-regional partnerships and joint-ventures based on the new knowledge.

Latin American and Caribbean countries have the opportunity to focus on the source of the money or the source of the migrants. The former may be more politically attractive, but we do have the capacity to address the latter. After all, pro-poor and sustainable development is the only valid answer to this challenge. Mr. Morales and other regional leaders need to recognise that good policies are good politics.

Enrique Mendizabal is a research fellow at the Overseas Development Institute

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The New Times: Brexit, globalisation, the crisis in Labour and the future of the left

With essays by David Miliband, Paul Mason, John Harris, Lisa Nandy, Vince Cable and more.

Once again the “new times” are associated with the ascendancy of the right. The financial crash of 2007-2008 – and the Great Recession and sovereign debt crises that were a consequence of it – were meant to have marked the end of an era of runaway “turbocapitalism”. It never came close to happening. The crash was a crisis of capitalism but not the crisis of capitalism. As Lenin observed, there is “no such thing as an absolutely hopeless situation” for capitalism, and so we discovered again. Instead, the greatest burden of the period of fiscal retrenchment that followed the crash was carried by the poorest in society, those most directly affected by austerity, and this in turn has contributed to a deepening distrust of elites and a wider crisis of governance.

Where are we now and in which direction are we heading?

Some of the contributors to this special issue believe that we have reached the end of the “neoliberal” era. I am more sceptical. In any event, the end of neoliberalism, however you define it, will not lead to a social-democratic revival: it looks as if, in many Western countries, we are entering an age in which centre-left parties cannot form ruling majorities, having leaked support to nationalists, populists and more radical alternatives.

Certainly the British Labour Party, riven by a war between its parliamentary representatives and much of its membership, is in a critical condition. At the same time, Jeremy Corbyn’s leadership has inspired a remarkable re-engagement with left-wing politics, even as his party slumps in the polls. His own views may seem frozen in time, but hundreds of thousands of people, many of them young graduates, have responded to his anti-austerity rhetoric, his candour and his shambolic, unspun style.

The EU referendum, in which as much as one-third of Labour supporters voted for Brexit, exposed another chasm in Labour – this time between educated metropolitan liberals and the more socially conservative white working class on whose loyalty the party has long depended. This no longer looks like a viable election-winning coalition, especially after the collapse of Labour in Scotland and the concomitant rise of nationalism in England.

In Marxism Today’s “New Times” issue of October 1988, Stuart Hall wrote: “The left seems not just displaced by Thatcherism, but disabled, flattened, becalmed by the very prospect of change; afraid of rooting itself in ‘the new’ and unable to make the leap of imagination required to engage the future.” Something similar could be said of the left today as it confronts Brexit, the disunities within the United Kingdom, and, in Theresa May, a prime minister who has indicated that she might be prepared to break with the orthodoxies of the past three decades.

The Labour leadership contest between Corbyn and Owen Smith was largely an exercise in nostalgia, both candidates seeking to revive policies that defined an era of mass production and working-class solidarity when Labour was strong. On matters such as immigration, digital disruption, the new gig economy or the power of networks, they had little to say. They proposed a politics of opposition – against austerity, against grammar schools. But what were they for? Neither man seemed capable of embracing the “leading edge of change” or of making the imaginative leap necessary to engage the future.

So is there a politics of the left that will allow us to ride with the currents of these turbulent “new times” and thus shape rather than be flattened by them? Over the next 34 pages 18 writers, offering many perspectives, attempt to answer this and related questions as they analyse the forces shaping a world in which power is shifting to the East, wars rage unchecked in the Middle East, refugees drown en masse in the Mediterranean, technology is outstripping our capacity to understand it, and globalisation begins to fragment.

— Jason Cowley, Editor 

Tom Kibasi on what the left fails to see

Philip Collins on why it's time for Labour to end its crisis

John Harris on why Labour is losing its heartland

Lisa Nandy on how Labour has been halted and hollowed out

David Runciman on networks and the digital revolution

John Gray on why the right, not the left, has grasped the new times

Mariana Mazzucato on why it's time for progressives to rethink capitalism

Robert Ford on why the left must reckon with the anger of those left behind

Ros Wynne-Jones on the people who need a Labour government most

Gary Gerstle on Corbyn, Sanders and the populist surge

Nick Pearce on why the left is haunted by the ghosts of the 1930s

Paul Mason on why the left must be ready to cause a commotion

Neal Lawson on what the new, 21st-century left needs now

Charles Leadbeater explains why we are all existentialists now

John Bew mourns the lost left

Marc Stears on why democracy is a long, hard, slow business

Vince Cable on how a financial crisis empowered the right

David Miliband on why the left needs to move forward, not back

This article first appeared in the 22 September 2016 issue of the New Statesman, The New Times