Sunday, September 02, 2007

Good investments, bad investments

The other day I was listening to a podcast from NPR featuring the stories of Latin Americans living in Spain. Among other facts in the story was that Spain is now home to some 4 million immigrants, and now a majority of Latin Americans who emigrate choose Europe rather than the U.S., drawn by a similar culture, language and a financial industry oriented towards immigrants and their families in the new world. Jerome reports that emigrants in Spain are able to leverage their earnings to get loans for and pay for houses, cars, insurance and other items in their home countries.

Lucía Jiminez says the remittances she sends are better than official government-to-government aid projects.
"No matter how marvelous and well-designed the projects are, in the end the money disappears," she says. "Especially in my country, Paraguay. It's one of the most corrupt countries in the world."
The $5 billion in remittances sent last year by Latin Americans in Spain is almost as much as Latin America as a whole received in aid from the IMF, the World Bank, and the Inter-American Development Bank, combined.
This seems to be much the same story as it is in Honduras, where it seems that many towns have substantial numbers of their young men working in El Norte, many in and around Dallas, Houston and the suburbs of Washington, based on my non-scientific survey.

The thing about this, though, is that it means that in these places, there is hardly anybody with any initiative left because those with a little "get up and go" have gotten up and left. Furthermore, the "aid" that they send back is either spent on basic supplies for living and junk food like Coca-Cola and chips, or it's spent on various consumer goods that deliver their benefit narrowly.

From my perspective, though, what Honduras (or a place like San Manuel, anyway) needs is more of those big government projects, not a couple families accumulating dollar-bought goods thanks to a relative working illegally in Fort Worth. This place needs paved highways so that the buses can get better gas mileage and cover the 32 kilometers (20 miles) between San Manuel and Gracias in less than two hours, rather than a couple more used 4x4 pickup trucks where 10 people pile in the bed because the bus is too crowded. It needs wired telephone service so people can make domestic calls without spending a small fortune on their prepaid cell phones, and not people with a cousin in Fairfax County who buy fancy phones like the Motorola RAZR.

Here, they need a functioning postal system that reaches beyond the provincial capitals so that the woman who works on my Educatodos program doesn't have to go to Gracias in person three times a week to pick up or drop off various materials or messages from the administration there--an errand which takes from 6 a.m. until 3 p.m. and involves four hours on a bus which is likely hot and overcrowded--for every workbook, status report or whatever that needs to be delivered. They need a Works Progress Administration-type agency to build much-needed infrastructure in rural areas and put Honduras' underemployed youths to work.

So good for you if you can send a couple hundred Euros to your family in Asunción or Managua every month, but I think those big infrastructure projects are a better deal for the country.

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