- The Washington Times - Thursday, May 17, 2001

At the Money Post, a check cashing place on Kenilworth Avenue in Hyattsville, locals line up every morning to send money home to their families in Mexico, El Salvador, Nicaragua, Cuba, Guatemala and dozens of other Latin American nations.

The sums are small — $250, $300, maybe $500, if things have been good. Most send money eight or ten times a year, costing between $15 and $30 for each transfer of cash from the United States, to their families in the Caribbean, Central and South America. But many say that if it cost less, they would send more. The remittances go to pay the rent, buy a nice dress for a niece´s 15th birthday, or to purchase food or medicines.

The Inter American Development Bank, which holds a conference on remittances in Washington today and tomorrow, is hoping to make it easier for these folks and thousands of others in the Washington area to send money home to their families.

"Remittances as a Development Tool," is designed to map a plan for — tapping the enormous buying power of remittances. Some $20 billion a year is sent home to Latin America by immigrants living and working abroad. The amount is expected to reach $300 billion within 10 years.

According to the Multilateral Investment Fund of the IADB, the amount already exceeds development assistance, is equal to nearly one-third of all foreign investment in the region and accounts for at least 10 percent of the Gross Domestic Product in six countries — Haiti, Nicaragua, El Salvador, Jamaica, the Dominican Republic and Ecuador.

"In Central America, where the average income is $100 a month, $250 in remittances is quite a bit of money. It is a lifeline," said Donald Terry, a manager of the Multilateral Investment Fund at the IADB.

Sandra Pozo, a Dominican who runs the the Western Union office in the gas station down the street from the Money Post, said she sends her family $200 or $300 a month.

Her office sends between $3,000 and $5,000 a day around the world, she said.

Carlos Andrade, eating lunch with his wife at Taqueria Tres Reyes, said he sends between $300 and $700, six or seven times a year, to his parents in Guatemala City.

Mr. Terry said that a primary goal of the IADB would be to bring down the cost of each remittance transaction, currently 15 percent to 20 percent of the total transfer, depending on the amount of money being sent, the destination and the speed of the transfer.

To demonstrate the problem, Mr. Terry pulled out several of his Automated Teller Machine (ATM) cards, which he uses all over Latin America for $2 or $3 per transaction. At more than 80 million remittance transactions a year, the $30 transfer fees begin to add up to "real money" he said.

"This is not directed at Western Union, which provides a convenient, fast, and secure way to send money, but when it costs $29 to send $250, you end up paying a huge premium. We want to cut the cost of these transactions," he said.

He described a project for Hispanic poultry workers in Durham, N.C., who were persuaded to join a credit union. The workers, many undocumented and leery of banks, were issued ATM cards. Typically, one card was sent to Mexico for the family there to use to withdraw funds. That cut Western Union out of the deal and cut the cost of transferring funds to a few dollars each time.

Another goal of the conference is to help create alternative "investment opportunities" for immigrant "hometown associations."

These groups, hundreds of them active throughout the United States, typically raise money for specific projects in their town or region, perhaps to build a new schoolroom, purchase a new ambulance or provide disaster relief.

To tap this resource, IADB is in the process creating development funds, like niche mutual funds, specific for each country that hometown associations, or more prosperous immigrants, may wish to invest in.

Asked if they would like an opportunity to invest in Guatemala´s economic development and perhaps make some money in return, the Andrades were very enthusiastic.

"We would be very interested in participating in something like that," Mr. Andrade said.


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