WEBVTT

00:00:00.000 --> 00:00:05.000
[sil.]

00:00:30.000 --> 00:00:35.000
[music]

00:00:40.000 --> 00:00:44.999
[music]

00:00:45.000 --> 00:00:49.999
A day of entertainment in Arlington,
Virginia, the local Latin-American community

00:00:50.000 --> 00:00:54.999
get together to enjoy their own music and
culture. They\'re part of a global movement

00:00:55.000 --> 00:00:59.999
of poor migrant workers who travel to richer
countries to work and to send money home

00:01:00.000 --> 00:01:04.999
to support the families
they\'ve left behind.

00:01:05.000 --> 00:01:09.999
Worldwide, it\'s estimated that flow
of money amounts to a staggering

00:01:10.000 --> 00:01:14.999
$200 billion a year.
What impact can it have

00:01:15.000 --> 00:01:19.999
in the fight against poverty? To find out more, life
has traveled to the United States and El Salvador

00:01:20.000 --> 00:01:25.000
to uncover this hidden economy.

00:01:30.000 --> 00:01:34.999
There have always been economic migrants,

00:01:35.000 --> 00:01:39.999
people who swap regions, countries,
even continents to find better wages

00:01:40.000 --> 00:01:44.999
to pay for a better life.

00:01:45.000 --> 00:01:49.999
The remittances have been around
for generations upon generations.

00:01:50.000 --> 00:01:54.999
Well, they are accelerating.
People move north by the millions,

00:01:55.000 --> 00:01:59.999
and money moves south by the billions.

00:02:00.000 --> 00:02:04.999
The Treasury Department and the US government
is extremely interested in remittances

00:02:05.000 --> 00:02:09.999
until about five years ago, we didn\'t appreciate the
magnitude of the flows and still it\'s very hard to identify

00:02:10.000 --> 00:02:14.999
really how many remittances
are leaving the US.

00:02:15.000 --> 00:02:19.999
This is a global phenomenon. We estimate that there
are about $200 billion sent and all over the world

00:02:20.000 --> 00:02:24.999
by some 150 million immigrants.

00:02:25.000 --> 00:02:29.999
One out of every ten people on the planet
either sends or receives money from abroad.

00:02:30.000 --> 00:02:34.999
And unlike all other forms of financial aid
that travels into developing countries,

00:02:35.000 --> 00:02:39.999
remittances go directly to poor people.

00:02:40.000 --> 00:02:44.999
Who turns out that
remittances to Latin America

00:02:45.000 --> 00:02:49.999
are more than all of the foreign direct investment.
And all of the official development assistance

00:02:50.000 --> 00:02:54.999
all the foreign aid combined. And these are
enormous flows going in through these countries.

00:02:55.000 --> 00:02:59.999
And they support the tens
of millions of families.

00:03:00.000 --> 00:03:04.999
Huge sums of money are involved and the way this
money is sent from A to B is being revolutionized.

00:03:05.000 --> 00:03:09.999
Not surprisingly, the banking community
is starting to show an interest.

00:03:10.000 --> 00:03:14.999
As a result, the days of smuggling
dollars home may soon be over

00:03:15.000 --> 00:03:19.999
together with the expense
of using transfer agents.

00:03:20.000 --> 00:03:24.999
The cost of remaining is going down the
more that the banks have become involved

00:03:25.000 --> 00:03:29.999
the lower the fees have become. But I think
remittance is much more than a transfer.

00:03:30.000 --> 00:03:34.999
It\'s about linking to families, to economies.
The vast majority of economic migrants

00:03:35.000 --> 00:03:39.999
who come to the United States
are from Latin America,

00:03:40.000 --> 00:03:44.999
more than one million come from El Salvador, a
country hard-hit by tragedy in the last 25 years.

00:03:45.000 --> 00:03:49.999
First, a bitter 12-year Civil War

00:03:50.000 --> 00:03:54.999
which ended in 1992, claimed
the lives of 75,000 people.

00:03:55.000 --> 00:03:59.999
Then came a series of natural
disasters, hurricane Mitch in 1998,

00:04:00.000 --> 00:04:04.999
followed by a number of earthquakes in 2001.
Each has contributed to the country\'s poverty

00:04:05.000 --> 00:04:09.999
and sent tens of thousands
in search of work abroad.

00:04:10.000 --> 00:04:14.999
As a consequence, remittances have left
from less than a billion dollars in 1994

00:04:15.000 --> 00:04:19.999
to $2.5 billion in 2004

00:04:20.000 --> 00:04:24.999
or roughly 17.1% of GDP.

00:04:25.000 --> 00:04:29.999
Today, the exodus of workers still
continues, and the government has created

00:04:30.000 --> 00:04:34.999
a special ministerial office for them.

00:04:35.000 --> 00:04:39.999
We were generated a great
deal of migration.

00:04:40.000 --> 00:04:44.999
The thing there was
another kind of migration

00:04:45.000 --> 00:04:49.999
but continued during the period of these
international(ph.) reconstruction.

00:04:50.000 --> 00:04:54.999
These two distinct scenarios led to a
quarter of the population living abroad.

00:04:55.000 --> 00:04:59.999
This has an enormous impact
on the political, economical,

00:05:00.000 --> 00:05:04.999
social, and cultural life in our country.

00:05:05.000 --> 00:05:09.999
In rural areas like Chronolog
Wa, up to a third of the people

00:05:10.000 --> 00:05:14.999
depend on money from abroad. Julio
and Ana Cortes are among them.

00:05:15.000 --> 00:05:19.999
Each month they get $200 from their
elder children in Washington.

00:05:20.000 --> 00:05:24.999
It\'s made a world of difference to Julio,
and Ana, and their remaining children.

00:05:25.000 --> 00:05:29.999
[sil.]

00:05:30.000 --> 00:05:34.999
Here is the kitchen. Over
there, you have the utensils.

00:05:35.000 --> 00:05:39.999
A telephone to call my children.

00:05:40.000 --> 00:05:44.999
Here is the living room.

00:05:45.000 --> 00:05:49.999
[sil.]

00:05:50.000 --> 00:05:54.999
And this is the refrigerator.

00:05:55.000 --> 00:05:59.999
In the part above, where you have
the ice is cold. (inaudible)

00:06:00.000 --> 00:06:04.999
And down below,

00:06:05.000 --> 00:06:09.999
it\'s less cold. Here are
the entertainment center.

00:06:10.000 --> 00:06:14.999
This is the television. All
these with remittances.

00:06:15.000 --> 00:06:19.999
(inaudible) remittances
are turning El Salvador

00:06:20.000 --> 00:06:24.999
into a nation of consumers, but in
reality most of the money is used to pay

00:06:25.000 --> 00:06:29.999
for necessities like food and clothing.
And in Julio and Anna\'s case,

00:06:30.000 --> 00:06:34.999
improvements on their house.
Before the children left,

00:06:35.000 --> 00:06:39.999
our house had a dirt floor made of clay. It wasn\'t like
this one. We were afraid it was going to fall down on us.

00:06:40.000 --> 00:06:44.999
But with remittances, we build this house.

00:06:45.000 --> 00:06:49.999
Over 6,000 kilometers away,

00:06:50.000 --> 00:06:54.999
suburban Washington, USA, this is where
some of Anna and Julio\'s older children

00:06:55.000 --> 00:06:59.999
came to find work and to live.

00:07:00.000 --> 00:07:04.999
They arrived here illegally.
First, Elma in 1998.

00:07:05.000 --> 00:07:09.999
Then Hector, in 1999. And
finally, Dalila in 2001.

00:07:10.000 --> 00:07:14.999
[non-English narration]

00:07:15.000 --> 00:07:19.999
I suffered a lot of youth. I suffered
from hunger. We were four main mirrors

00:07:20.000 --> 00:07:24.999
that he doesn\'t trailers. We were thirsty.

00:07:25.000 --> 00:07:29.999
Exposed to the Sun and the rain,
after 28 days, I reached here.

00:07:30.000 --> 00:07:34.999
Can you for American dream?
In our countries,

00:07:35.000 --> 00:07:39.999
a lot of people have this
dream because of poverty.

00:07:40.000 --> 00:07:44.999
Yet here, the real life is more like nightmare because
of her heart, you have to work every single day

00:07:45.000 --> 00:07:49.999
became a monitor because we
wanted to go after our families.

00:07:50.000 --> 00:07:54.999
We need to support our families.

00:07:55.000 --> 00:07:59.999
The Salvadoran government says illegal migration
is a risk that many are willing to take

00:08:00.000 --> 00:08:04.999
and that problems continue
long after they arrive.

00:08:05.000 --> 00:08:09.999
(inaudible). If they manage to end that,

00:08:10.000 --> 00:08:14.999
they have other problems
such as wage levels,

00:08:15.000 --> 00:08:19.999
labor rights, social security coverage,

00:08:20.000 --> 00:08:24.999
all the problems of being undocumented
that affects migrants to their callers.

00:08:25.000 --> 00:08:29.999
[music]

00:08:30.000 --> 00:08:34.999
Dalila and her brothers are lucky.

00:08:35.000 --> 00:08:39.999
They\'ve received temporary protected status,
a kind of amnesty which allows them to work.

00:08:40.000 --> 00:08:44.999
It was introduced by the US government in
1990, to help people who can\'t return home

00:08:45.000 --> 00:08:49.999
because of conflict or natural disasters.

00:08:50.000 --> 00:08:54.999
So far, it\'s been granted to nearly 350,000
Latin Americans, but the permit is temporary.

00:08:55.000 --> 00:08:59.999
If Dalila and her brothers leave the
US, they won\'t be allowed back.

00:09:00.000 --> 00:09:04.999
[music]

00:09:05.000 --> 00:09:09.999
[non-English narration]

00:09:10.000 --> 00:09:14.999
A telephone call is as close as Delilah

00:09:15.000 --> 00:09:19.999
and her mother Anna have been in for years.

00:09:20.000 --> 00:09:28.000
[non-English narration]

00:09:30.000 --> 00:09:34.999
I heard a news that those with temporary
permits, may be keeping residency.

00:09:35.000 --> 00:09:39.999
(inaudible) But they didn\'t say when.

00:09:40.000 --> 00:09:44.999
If they do, we can visit. (inaudible).

00:09:45.000 --> 00:09:49.999
[non-English narration]

00:09:50.000 --> 00:09:54.999
I love you a lot.

00:09:55.000 --> 00:10:03.000
[music]

00:10:20.000 --> 00:10:24.999
Dalila might prefer to be in El Salvador, but there is still
a shortage of jobs and a big gap between rich and poor.

00:10:25.000 --> 00:10:29.999
According to 1999 figures, the
richest fifth of the population

00:10:30.000 --> 00:10:34.999
held nearly half of the country\'s wealth.
The poorest fifth just 5.6%.

00:10:35.000 --> 00:10:39.999
Remittances are making a
difference to the poorest people,

00:10:40.000 --> 00:10:44.999
but there are drawbacks. The government
admits that for the younger generation,

00:10:45.000 --> 00:10:49.999
success means going elsewhere to earn money

00:10:50.000 --> 00:10:54.999
and that can dislocate families.

00:10:55.000 --> 00:10:59.999
We can see patterns of change in the
concept of success for young Salvadorians.

00:11:00.000 --> 00:11:04.999
They identified with the word migrate.
Another effect of migration

00:11:05.000 --> 00:11:09.999
is the disintegration
of the nuclear family.

00:11:10.000 --> 00:11:14.999
This has had an enormous social impact.

00:11:15.000 --> 00:11:19.999
The negative effect is that you
have communities that are divided.

00:11:20.000 --> 00:11:24.999
I mean, uh… mothers that have
to leave their children behind.

00:11:25.000 --> 00:11:29.999
There are certain communities (inaudible) will
you only find the elderly and the children.

00:11:30.000 --> 00:11:34.999
I mean what kind of society
would that be in the future.

00:11:35.000 --> 00:11:39.999
There are times when one
feel a little bit jealous,

00:11:40.000 --> 00:11:44.999
especially when so-and-so is sent money.

00:11:45.000 --> 00:11:49.999
Rosalia Benitez is Julio and Ana\'s neighbor, and one of the many
people in the community who don\'t receive money from abroad.

00:11:50.000 --> 00:11:54.999
The people who don\'t get
remittances, they say,

00:11:55.000 --> 00:11:59.999
\"He should watch his money. Because what
if the person in the United States dies,

00:12:00.000 --> 00:12:04.999
what will he do then?\"

00:12:05.000 --> 00:12:09.999
Rosalia and her daughter\'s lived with seven other
relatives. Sometimes there\'s not enough food to go round.

00:12:10.000 --> 00:12:14.999
Even so Rosalia is determined not to
follow the money trail North to America.

00:12:15.000 --> 00:12:19.999
[non-English narration]

00:12:20.000 --> 00:12:24.999
Yes, I have often thought of leaving
to work as a wetback as they say

00:12:25.000 --> 00:12:29.999
to help my family. But then I think that I
would lose my daughter\'s love if I left them.

00:12:30.000 --> 00:12:34.999
I could send money back into their lives, but
what about love and education, is not the same.

00:12:35.000 --> 00:12:39.999
[non-English narration]

00:12:40.000 --> 00:12:44.999
Remittances play a huge role in
supporting many poor families,

00:12:45.000 --> 00:12:49.999
but as some country is becoming too
dependent on this flow of money.

00:12:50.000 --> 00:12:54.999
Remittances create a safety net

00:12:55.000 --> 00:12:59.999
that the state doesn\'t have to deal with.

00:13:00.000 --> 00:13:04.999
And the more money you send home to feed, clothe,
and provide medical attention to your family,

00:13:05.000 --> 00:13:09.999
the less obligation on the state
and the more freedom of the state

00:13:10.000 --> 00:13:14.999
to engage in any kind of

00:13:15.000 --> 00:13:19.999
less responsible activity.
Increasingly migrant groups in the US,

00:13:20.000 --> 00:13:24.999
are taking on financial responsibilities
once left to the state.

00:13:25.000 --> 00:13:29.999
Known as Hometown Associations,
groups like this one raise extra cash

00:13:30.000 --> 00:13:34.999
to send home for community projects.
In 2004, more than $2 million

00:13:35.000 --> 00:13:39.999
was sent back to El Salvador.

00:13:40.000 --> 00:13:44.999
Uh… We\'ve been building churches, Red Cross
building. We\'ve been driving ambulance from here.

00:13:45.000 --> 00:13:49.999
Uh… Last project that we have uh… we
have uh… a reforestation project because

00:13:50.000 --> 00:13:54.999
that\'s very critical in my country
right now. We raise money constantly.

00:13:55.000 --> 00:13:59.999
Some communities get so much money. They don\'t need
to rely on the government to fund local improvements.

00:14:00.000 --> 00:14:04.999
(inaudible).

00:14:05.000 --> 00:14:09.999
Those… those communities around there,
they don\'t even bother to… to (inaudible).

00:14:10.000 --> 00:14:14.999
They\'re so sufficient. They are…

00:14:15.000 --> 00:14:19.999
A lot of the young kids of the ninth
grade nearly have a recent immigrant

00:14:20.000 --> 00:14:24.999
government\'s themselves in
these developing countries

00:14:25.000 --> 00:14:29.999
absolutely need to do a much better job than
they\'ve been doing over the last 25 years.

00:14:30.000 --> 00:14:34.999
I think, it is very, very important to
underscore that remittances are not a substitute

00:14:35.000 --> 00:14:39.999
for sound economic policies at home

00:14:40.000 --> 00:14:44.999
and remittances are certainly not
a substitute for assistance.

00:14:45.000 --> 00:14:49.999
None of this is denied by
the Salvadoran government.

00:14:50.000 --> 00:14:54.999
But in reality the country has few development options. And
increasingly, the government is trying to bring remittances

00:14:55.000 --> 00:14:59.999
into the mainstream economy.

00:15:00.000 --> 00:15:04.999
(inaudible) We have published the
book containing all public policies

00:15:05.000 --> 00:15:09.999
address the Salvadorians leaving abroad

00:15:10.000 --> 00:15:14.999
and who would like to invest in the
country. We offer technological assistance,

00:15:15.000 --> 00:15:19.999
procedures to set up a business project

00:15:20.000 --> 00:15:24.999
that may be of interest to Salvadorans…

00:15:25.000 --> 00:15:29.999
The government is also working with
international development organizations

00:15:30.000 --> 00:15:34.999
to encourage those who receive remittances
to use the money in other productive ways.

00:15:35.000 --> 00:15:39.999
They should continue using it
for what they receive it for

00:15:40.000 --> 00:15:44.999
which is to survive to… to… to send
their children to school to… to…

00:15:45.000 --> 00:15:49.999
to have their shelter and so on. But we
can also help them to umm… multiply the

00:15:50.000 --> 00:15:54.999
umm… effect of this re… remittances
float in their community.

00:15:55.000 --> 00:15:59.999
With assistance from the UN agency IFAD, Julio and
Ana have invested some money into their farm.

00:16:00.000 --> 00:16:04.999
[non-English narration]

00:16:05.000 --> 00:16:09.999
We gave them an opportunity to invest
in the infrastructure of the farms

00:16:10.000 --> 00:16:14.999
in ways that make them more profitable. Buying
improved seeds and better quality supplies,

00:16:15.000 --> 00:16:19.999
diminishes risk in productivity.

00:16:20.000 --> 00:16:24.999
[music]

00:16:25.000 --> 00:16:29.999
Julio and Ana used to grow maize and beans
but just for their own consumption.

00:16:30.000 --> 00:16:34.999
Now they also grow fruit trees and rear animals
which earns them a profit of $200 a month.

00:16:35.000 --> 00:16:39.999
[sil.]

00:16:40.000 --> 00:16:44.999
I have more income because I work the land.

00:16:45.000 --> 00:16:49.999
I don\'t live solely from remittances.

00:16:50.000 --> 00:16:54.999
Having opportunities to invest their remittances, has
helped pull the Corte\'s family further from poverty.

00:16:55.000 --> 00:16:59.999
But what about the rest of the community?
Is there a way to spread the benefits?

00:17:00.000 --> 00:17:04.999
One answer may be to change
our remittances ascent.

00:17:05.000 --> 00:17:09.999
The old methods were well
known and dangerous.

00:17:10.000 --> 00:17:14.999
Mules or money smugglers would regularly carry
thousands of dollars across the borders

00:17:15.000 --> 00:17:19.999
and still do.

00:17:20.000 --> 00:17:24.999
Money transfer agents are a much more secure route.
But transfers and smuggling are still expensive.

00:17:25.000 --> 00:17:29.999
When we started working at this five
years ago, the cost of sending the money

00:17:30.000 --> 00:17:34.999
was often 15 to 20% of the
total of the remittance.

00:17:35.000 --> 00:17:39.999
Economists would call that inefficient.

00:17:40.000 --> 00:17:44.999
The real word would be outrageous. Now
with the sent of serious money in the air,

00:17:45.000 --> 00:17:49.999
some banks are starting to get involved. And
that could lead to a reduction in costs

00:17:50.000 --> 00:17:54.999
as well as a change in how remittances are
transferred. In the United States we\'ve seen banks

00:17:55.000 --> 00:17:59.999
increasingly become interested in this market. And it\'s partly
because they understand that many immigrants in this country stay

00:18:00.000 --> 00:18:04.999
and become bank customers. Remittances
are often what we call a lost leader

00:18:05.000 --> 00:18:09.999
that it might be something where the bank is losing
money in the immediate. They may be offering $5, $10

00:18:10.000 --> 00:18:14.999
of free remittance service. It\'s not free
for a bank to offer a remittance service,

00:18:15.000 --> 00:18:19.999
but they use it as a way to get immigrants into the
door. Banks may call it relationship building.

00:18:20.000 --> 00:18:24.999
But for the people who receive remittances,
banking can offer new financial possibilities.

00:18:25.000 --> 00:18:29.999
For example, they could get
credit to start a business.

00:18:30.000 --> 00:18:34.999
One of the classes of poverty
is the lack of access

00:18:35.000 --> 00:18:39.999
to wealth generation. And you don\'t
generate wealth just through employment

00:18:40.000 --> 00:18:44.999
but through asset building. And you build
assets through financing, through credit.

00:18:45.000 --> 00:18:49.999
Who send you this t-shirt?

00:18:50.000 --> 00:18:54.999
Dalila sent it. And this shirts
also Dalila. She is a great sister…

00:18:55.000 --> 00:18:59.999
[non-English narration]

00:19:00.000 --> 00:19:04.999
The Corte\'s family managed to
save between $10 and $20 a month.

00:19:05.000 --> 00:19:09.999
If they and people like them, put their
savings into banks and credit unions

00:19:10.000 --> 00:19:14.999
rather than under their mattresses. It\'s estimated
it would add another $250 million dollars

00:19:15.000 --> 00:19:19.999
to the country\'s economy. And that means
more money for banks to loan to others.

00:19:20.000 --> 00:19:24.999
So even families that are
not receiving remittances

00:19:25.000 --> 00:19:29.999
could benefit because they have
nearby a financial institution

00:19:30.000 --> 00:19:34.999
that could provide them
with financial services

00:19:35.000 --> 00:19:39.999
to which they didn\'t have access before.

00:19:40.000 --> 00:19:44.999
A good example is Rosalia,
Julio and Ana\'s neighbor,

00:19:45.000 --> 00:19:49.999
still determined not to leave her children and migrate
North. She\'s recently been able to obtain a small loan

00:19:50.000 --> 00:19:54.999
from a local credit union. Money that wouldn\'t
have been available to her just a few years ago,

00:19:55.000 --> 00:19:59.999
she\'s now invested in rabbit farming.

00:20:00.000 --> 00:20:04.999
[sil.]

00:20:05.000 --> 00:20:09.999
[non-English narration] I love it.
And up to now, I\'m very content.

00:20:10.000 --> 00:20:14.999
With money, we buy eggs, cheese, cream,

00:20:15.000 --> 00:20:19.999
cooking oil, some noodles, and sometimes
they take the girls in (inaudible).

00:20:20.000 --> 00:20:24.999
[non-English narration]

00:20:25.000 --> 00:20:29.999
Indeed aiding the flow of
money to poor rural areas,

00:20:30.000 --> 00:20:34.999
and to people like Rosalia, maybe the most
important effect in the current transformation

00:20:35.000 --> 00:20:39.999
of the remittance market.

00:20:40.000 --> 00:20:44.999
In Washington, this woman is sending money to her family
in El Salvador through a company specially set up

00:20:45.000 --> 00:20:49.999
to connect to microfinance institutions small
banks and credit unions in remote areas.

00:20:50.000 --> 00:20:54.999
Here the broader economic
impact of remittances

00:20:55.000 --> 00:20:59.999
could be the most beneficial.

00:21:00.000 --> 00:21:04.999
But such changes are slow and coming. And
in the meantime, families will continue

00:21:05.000 --> 00:21:09.999
to make sacrifices as a means of survival.

00:21:10.000 --> 00:21:14.999
[sil.]

00:21:15.000 --> 00:21:19.999
When did you last see your children?

00:21:20.000 --> 00:21:24.999
One was seven years ago.

00:21:25.000 --> 00:21:29.999
The other four years ago. Two were four.
And one was three.

00:21:30.000 --> 00:21:34.999
And the last was two… two years ago.

00:21:35.000 --> 00:21:39.999
It\'s been hard for your parents,

00:21:40.000 --> 00:21:44.999
but I know that our help
make them feel better.

00:21:45.000 --> 00:21:49.999
They know we are doing well here because we
talk to them every week and send them money.

00:21:50.000 --> 00:21:54.999
And they know we are okay.

00:21:55.000 --> 00:21:59.999
Being apart is hard. But the
opportunity to earn better wages

00:22:00.000 --> 00:22:04.999
is why the Corte\'s children and
many like them head for America.

00:22:05.000 --> 00:22:09.999
But as remittances increase and with
better ways of harnessing that wealth,

00:22:10.000 --> 00:22:14.999
perhaps one day the real opportunities
will be found in El Salvador.

00:22:15.000 --> 00:22:19.999
Until then, the exodus of
workers is bound to continue.

00:22:20.000 --> 00:22:25.000
[music]