Remittances, another consequence of the imperialist exploitation

Featured image: Immigrants sending money. Source: CLAUDIO ÁLVAREZ

All data confirms it: remittances sent by immigrants from imperialist countries to their countries of origin is at an historical record and are expected to continue increasing during the next years. According to the World Bank, remittances sent to the countries of Latin America and the Caribbean have increased by 5% in 2022, the last year with complete data. This means a total of 626 billion US dollars sent from imperialist countries to semi-colonial and semi-feudal countries. Although there are still no official figures, it is estimated that in 2023 the figure will increase again. Dilip Ratha, chief economist in Macro-economy and Fiscal Management of the World Bank, thinks that in five years “the underlying factors that promote remittances will continue to grow. We could see that remittances reach the trillion dollars in the foreseeable future.” According to the World Bank data, they calculated in June 2023 that the remittances of money sent would be around 656 billion dollars, 4.57% more than 2022.

This increase in remittances that foreigners make to their families in their countries of origin shows the sharpening of the contradiction between imperialist countries and semi-colonial and semi-feudal countries. To give more money, there is a need for two conditions: that foreigners have work in the country and, in addition, that the living conditions of the country they come from are increasingly worse for the people. That is, the rise in remittances indicates that more and more families in Latin American countries or Southeast Asia depend more on their family members moving to an imperialist country and send them money, since the people cannot survive with their income in their own countries. The data confirms that during the so-called “COVID-19 crisis”, when many jobs were lost in imperialist countries, remittances fell dramatically, but as soon as immigrants returned to work, this type of transactions increased drastically despite the low salaries.

Statistics of the percentage of remittances, transactions and the average money sent to Central America, Panama, Dominican Republic and Mexico from the United States in 2021. Source: IMF

“While the cases of COVID-19 rose, Salvadoran immigrants in the US sent more money to affected relatives.” Source: IMF

According to the directives of the money transfer companies themselves: “Remittances are a life line that extends from developed countries to developing countries and serves to keep people in the countries that receive them.” And this is confirmed by the thousands of testimonies of families in this situation, in which the money received is allocated to food, clothing and other goods, such as toys. But because of inflation and the deepening of the economic crisis of imperialism, the amount of money that has to be sent is increasing and more money is needed to buy the same goods. For example in Mexico, one of the countries which receives the highest amount of remittances, the price of basic products has increased drastically, 13.7% on average according to last years data compared to 2022, and in this year there was also a very large increase in basic products prices, which increased almost 30% since 2018.

Increase of the prices in Mexico from August of 2018 till August of 2022. Source: statista

In many semi-colonial and semi-feudal countries, these remittances represent a high percentage of their Gross Domestic Product (GDP), which means that a percentage of the economy of these countries, mainly from families, is based on the emigration of the people to imperialist countries. According to World Bank data, the percentage of remittances of the GDP of India, the most populous country in the world, is 3.26%, in the Philippines 2.24% and in Pakistan 22.76%. In African countries, Egypt, where it represents 5.94%, Morocco, with 8.53% and Somalia with 16.65%, stand out. In South American countries, in Ecuador the number is 4.13%, in Colombia 2.75% and in Bolivia 3.31%. In Central America, in Mexico, with more than 126 million inhabitants, remittances represent 4.17% of the GDP, and in the neighboring countries of Nicaragua and Honduras it is 20.59% and 26.75% respectively.

The 10 countries of the world which have received most remittances in 2022, and the amounts sent. Source: statista

Making a comparison with the other economic sectors, in Mexico remittances are the second largest source of income in the country, surpassing other sectors such as oil exports, tourism or even the entire direct foreign investment in Mexico, only below exports of the automotive industry.

Comparison of the GDP of Mexico between the remittances (blue) and Foreign Investment (orange). Source: Baker Institute

It is the same way in India, where 3.26% of its GDP that represents remittances exceeds industries such as mining and quarries or the supply of electricity, gas and water and other public services.

Main sectors of the Indian economy according to the GDP, the remittances are 3,26% of the total. Source: statistics times

The huge amount of remittances is a example of the submission of semi-colonial and semi-feudal countries under imperialist countries. Imperialism not only needs labor and the theft of resources for its industrial mega-projects, but also it needs foreign labor of oppressed countries in the imperialist country itself. In the workforce in the United States foreign workers account for almost 20% of the total employees, about 30 million. In Europe, countries like Germany have made a great call for immigrants to be able to sustain its economy, which in 2022 made up 24.3% of its population. In France they make up 10.3% and in the United Kingdom, net migration stood at 606,000 immigrants. In the Spanish state in 2022 there were about 5.5 million people from other countries, of which 880,000 was of Moroccan origin.

This labor is very important for imperialist countries because it is intended for the most precarious and essential sectors of the economy. According to economists, one of the reasons India is the country that receives the most remittances is that “the remittance flows of India are mainly driven by the strong demand for labor for the construction sector in the Arab oil powers such as Arabia Saudi, United Arab Emirates and Qatar. ” In the United States, 37.6% of all workers in construction are foreign workers, also highlighting painters (45.1%) and roofs layers (46.3%). Similar data is repeated in the other imperialist countries.

These jobs involve a high risk of danger, assuming a sector with a high percentage of work mortality and accidents. However, the employers take advantage of the living conditions of these immigrants, who often do not have legal permits, and the need they have to find work to be able to send money to their families. Such is the need that many times, even in the most dangerous jobs, such as in slaughterhouses, where dangerous machinery is used, cases of immigrant children working on these factories have been reported.

Also the service sector, again, a very precarious sector, has a large base of foreign workers. Many times the conditions are below the legal ones in the country (salary too low and too many hours of work). But among them, the one that stands out the most is the caregivers of the elderly and children. These women, who leave their countries of origin, even their children, are forced to emigrate to be able to send money to their own families. They have to stop taking care of their relatives and children earn a salary taking care of people in imperialist countries. These jobs are usually “black work”, without contract and therefore without unemployment pay when fired and without vacations. This type of work, completely dominated by women, has a great impact for women of the petit bourgeoisie of imperialist countries, since by delegating household tasks to migrant women, this allows them to improve their standard of living at a very low cost through the exploitation of the working woman.

But there is also another advantage for the ruling classes. Not only are the immigrant workers exploited and their situation taken advantage of, but they are also used as an ideological weapon of the bourgeoisie to be able to divide the working class. In front of the cyclic crises of imperialism, the bourgeoisie and its representatives, the Sates, blame the migrant working class for “stealing” work from the native workers. This not only avoids focusing on the real problem, the deepening of the global crisis of imperialism, but is also an obstacle to international solidarity and the union of the entire class. Throughout Europe, the most reactionary movements attack immigrants due to the deep crises of the system, either in Germany, France, Italy, the United Kingdom or in the United States, and propose deportation policies against the “illegals” carrying national chauvinism as their flag. However, they cannot expel them, or not as many as they state, since they know that these workers are essential for the economy of the country.

Before the sharpening of the world imperialist crisis, which not only steals resources and oppresses the semi-feudal and semi-colonial countries, but also steals labor of these countries to maintain the economies of imperialist countries, it is necessary to increase international solidarity in contrast of national chauvinism.

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