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Impact of Mexico's 3 x 1 Program for Migrants and Collective Remittances

Impact of Mexico's 3 x 1 Program for Migrants and Collective Remittances
Fernando E. Villegas Rivera | April 2014

Abstract 

One of the characteristics of the Mexican migrant exodus to the United States in recent decades is the creation of hometown clubs or associations (HTAs) formed by Mexican migrants in the United States as a way to support their hometown or region. Collective remittances sent by these HTAs are a product of this phenomenon. These are funds used for projects that benefit the entire community or a group within it. Given the impact that such remittances could have on economic development, the Mexican government implemented the 3 x 1 matching funds programme. However, they are now mostly known for the social and political development generated in some localities rather than for the economic attributes. This article discusses the limited impact of such remittances in the state of Sinaloa because of the lack of an institutionalized migrant policy by municipalities, little interest from Sinaloa migrants to organize towards helping their communities of origin, lack of good leadership, and sociological characteristics of the Sinaloa population that constrains sending collective remittances, among the most substantial causes.

International migration

In the last census conducted in 2012, the United Nations Population Division of the Department of Economic and Social Affairs estimates the world population to be more than 7 billion, of which more than 232 million are international migrants representing 3.2 per cent of the world population. This can be seen in Figure 1 where the increasing trend is evident, from 75 million in 1965 to 175 million in 2000.

Accordingly, international migration is an essential part of the policies at global and regional levels, mainly due to the impact and complexity of the phenomenon (Alba, 2009). Similarly in academia, the study of migration has gained momentum in recent years, especially among Mexican and U.S. researchers. According to Cuecuecha (2012), this increasing interest is due to the large number of immigrants that the United States receives. In this sense, data from the OECD (2013) indicates that in 2011 the foreign-born population residing in that country was 40.4 million (13 per cent of the total population) of which approximately one third originated in Mexico (29 per cent).

Mexico on the migration world stage

The consequences of international migration in the regions of origin are diverse and depend on factors equally diverse. These effects do not refer unilaterally to demographic changes in migratory areas, but also to the social, cultural, economic and political conditions. In the case of Mexican migration these conditions have undergone significant changes in recent decades. Thus, from the 1970’s onward there was a clear increase in the dynamism and intensity of Mexican migration, currently surpassing 12 million Mexicans living in other countries and regions mainly in the United States, which represents more than 10 per cent of the total population of Mexico and more than 98 per cent of Mexican international migrants (Figure 2). Similarly, a significant flow of Mexican migrants choose Canada and Spain as second and third destinations, with approximately 58,000 (0.5 per cent) and 48,000 (0.4 per cent) people, respectively (Figure 3).

Status of migration in Sinaloa Sinaloa is located in the migratory region called the “border”. Migration from this area has occurred over the last 50 years, unlike the “traditional” and the “recent” migration areas, with 100 and 20 years respectively.1 In this context, Durand (2004) points out that in 20 years, about 20 million people have migrated in the so-called “border” region (see Appendix Map 1). Lizárraga (2004) had already observed an increase in Sinaloa’s international migration. Thus, the growth rate of international migration outperforms states that are characterized by high emigration, such as Jalisco where its relative participation decreases every year. CONAPO (The National Population Council) constructs an index that measures the migration intensity level to the United States.2 In this index, Sinaloa is placed 22nd nationally with a “medium” level of migration intensity (see Appendix Map 2). In such a way, studies indicate that Sinaloa is a state with growing migration rates (Lizárraga, 2004; Pintor and Sánchez, 2012).

The impact of remittances in Mexico and in the world

According to World Bank data, in recent decades the volume of remittances sent by migrants to their home countries has grown significantly, currently exceeding US 444 billion dollars representing 0.7 per cent of GDP (Canales, 2008; World Bank, 2011; Alba, 2012). This can be seen in the Figure 4, where the trend is expected to continue over the coming years, despite the modest decline that started in 2008 because of the global financial crisis. Mexico’s case does not depart from this reality; it is the fourth in the world with over US 22 billion dollars, only surpassed by India, China and Philippines as seen in Figure 5.

In this sense and according to data from the Bank of Mexico, remittances represent 2.1 per cent of national GDP and come almost entirely from the United States. Its amount exceeds income from tourism and direct investment and since 2008 is the second source of foreign exchange in the country, after revenues generated by oil exports as illustrated in the next figure.

Remittances in Sinaloa In Sinaloa, remittances are important for economic and social development in some communities and for some families of that state. In 2013 it received US 479.75 million dollars in family remittances accounting for 2.2 per cent of the national total, placing it in 17th place. With regard to the growth rate, it is placed 23rd nationally with a 4.28 per cent growth rate (see Figure 7).

Accordingly, these monetary flows represent significant income for recipient families, constituting about 40 per cent of total household income, even though other states have comparably higher levels of migration and receive up to five times more remittances (Montoya, 2007; Pintor and Sánchez, 2012). Similarly, if we compare other state revenue with such remittances we can give an account of the importance with regard to economic level. Thus, for example, US 228.1 million dollars regarding Foreign Direct Investment (FDI) was captured in 2008, which represents 47.54 per cent of the total remittances received in the same period in Sinaloa.

Definition of remittances

What do we understand by “remittances”? Regularly we tend to typecast them as “the proportion of earnings that migrant workers send to their families in the country of origin” (Carling, 2007: 53). However, the scope of remittances is much wider, making it difficult to establish a definition that encompasses the whole picture. In this sense, not all countries agree in their conception of remittances, either by the conditions or the different specificities of each.3 Similarly, Durand (1994 in Goldring, 2004: 804) pointed out: “The problem is that opinions about remittances are made as if these were and meant the same thing in different places and over time”.4 But then, how to measure them properly? In this regard and depending on the approach, some scholars and analysts have made different typologies of remittances.

Thus, for instance, Canales (2008) has his own distinction or categorization of remittances based on a model of macroeconomic analysis, namely, family remittances and productive remittances. According to Canales (Ibid), the first correspond to direct transfers for household use, either for consumption or for savings. Also Goldring (2004) points out, these can include money sent to friends and distant relatives, as well as close family members. The latter are related to the various forms of private or social investment and are not included in the family budget.

Although family remittances are the most important in economic terms, they are only one type among others. Further definitions, in addition to including cash transfers, also include flows of various kinds (Fleischer, 2008 in Corona et al., 2008). Therefore, we can find for example, the technological remittances, the social remittances or the collective remittances. The first relates to the transfer of technology that migrants bring with them when they return to their home communities, such as skills, knowledge and experience among others (Durand, 2007). The second is defined by Levitt (1996:2) as “the ideas, behaviours, identities, and social capital that flow from receiving to sending-country communities”.

Lastly, collective remittances, the primary source of our analysis, describes the money raised by a group that is used to benefit a community or group of which it is part (Goldring, 2004). The following sections will deepen the study and analysis of these latter type of remittances in Mexico and Sinaloa.

Organizational forms of migrants and collective remittances

According to Fox and Bada (2008), organizations primarily composed of migrants have different modes ranging from worker organizations or religious congregations to Hometown Associations (HTAs). In this sense, one of the trends that distinguishes the current context involves the participation of such HTA’s and their relationship to various levels of government, which has led to a diversification in the types of remittances. Accordingly, the so-called collective remittances are an expression of that phenomenon and are described by Moctezuma Longoria (2011:128) as follows:

The establishment of savings reflects the extraterritorial practices carried out by the migrant organization which, in addition to serving as a means of maintaining interest in their home community, also favours the recovery of identities and the design of public policies, and strengthens the organization. 5

Similarly, Torres (1998 and 2000 in Moctezuma Longoria, 2011) notes that collective remittances are quality resources which family remittances lack and moreover are useful in the design of public policies. The term came into use according to Goldring and García Zamora (2004; 2009) to describe a longstanding practice on the part of Mexican HTA’s rooted in the 1960’s. However, there is evidence that the source of these organizations dates back to the 1920’s, although they are different from more recent migrant organizations in a variety of manners (Moctezuma Longoria, 2005). 6 

Either way, the organizational forms of migrant’s organizations that emerged in the 1960’s have a qualitative difference to its predecessors, which according to Moctezuma Longoria (Ibid) gives rise to the transnational community life. Thus, among the first types of social works carried out by organizations created in the 1960’s were: support for the celebrations of the patron saint, donating ambulances or buses and support for the elderly and poor families. However, in most cases these actions were not permanent neither formally presented to society nor the state. Also, they were mainly linked with the Catholic Church (Ibid). Nonetheless, it should be noted that these types of actions still persist in some current hometown migrant organizations.

Regarding the purpose of these organizations, Lanly and Valenzuela (2004:13) note that:

The club activities rest on the transnational vocation of the members who maintain ties and interests in the different spaces of the migratory circuit. As a result, the club activities are oriented around two complementary axes whose common purpose is not to lose the link to the place of origin: the mobilization of funds for carrying out works of social nature in the place of origin; and the promotion of a sense of community among migrants through organizing social and sporting e vents.7

More recently, some migrant organizations have been formed with the primary objective of helping their communities of origin with local public works projects through collective remittances, more commonly in collaboration with Mexican government since 2002, and strengthening cultural ties among migrants in their settlement communities. Therefore, in addition to supporting migrants with the social works commonly conducted, they have also carried out numerous social infrastructure works in their homelands,such as repairing plazas, churches, sports parks and cemeteries among others, with and without government matching funds.

Some other recent migrant organizational forms are more complex.8 They maintain relationships and practices that persist over time and are institutionalized between migrants and their social organizations as well as between the state and its political institutions (Itzigsohn, 2000 in Moctezuma Longoria, op cit.). These associations can include several clubs, thereby creating federations referring to both the state from which they come as well as their scope in the United States. These state-level federations address various issues, such as human and political rights of migrants in sending and receiving countries (Duquette-Rury and Bada, 2013). In the words of Moctezuma Longoria (op cit.): “these are permanent structures with a high degree of formalization, recognition and social legitimacy, based upon the collectivity and the binational practice of its members”.9

Similarly, there are also different forms of linkages between migrant organizations and the Mexican government. The following section describes a particular way of linking migrant organizations, the state and civil society.

The Program 3 x 1 for Migrants: Leverage to development?

At the beginning of the twenty-first century, the government tried to leverage the contributions of migrants for regional development, creating the federal “Program 3 x 1 for Migrants” among other government strategies. It was the first program of its kind in the world and has served as a model for other countries (Goldring, 2004; Jauregui, 2007; García, 2009; Burgess, 2012). In this program, all three levels of the Mexican government (federal, state and municipal) provide $3 for every $1 of remittance funds sent from an HTA for the construction of various kinds of works, namely basic infrastructure, services or employment generation. These works are approved by the Committee of Validation and Attention to Migrants (COVAM) composed of representatives of the migrant club, community and government (Burgess, 2012).

In this regard, collective remittances jointly with government matching grants have become a model of how groups in civil society can invest in infrastructure and productive projects in order to leverage development in their communities. The program presented rapid growth and wide acceptance by some Mexican migrant associations in the United States. However, in the latest report conducted by CONEVAL (2013), the Mexican agency for the evaluation of social development policies,10 which is a dependent organ of the Ministry of Social Development (SEDESOL), a significant decrease of 12 per cent of HTA’s that have been involved in the program was found, as well as a 10 per cent drop in migrant investment projects of the same (see Table 1).

Furthermore, if we compare the program investments to the volume of social and private investments in Mexico it is a negligible fund in macroeconomic terms, representing less than 0.01 per cent of GDP (Canales Cerón, 2008).

Thus, for Canales Cerón (Ibid: 135), these kinds of programs are just a “discourse of good intentions without real substance”.11 For him, the most significant contributions that this program has created are related to an increase in the opportunities for migrants to get involved in the political and social affairs of their communities of origin. Nonetheless, Canales emphasizes that no economic or social development is generated.

In contrast, Lozano-Ascencio (1998) argues that the impact of migrant remittances should be evaluated on a regional basis rather than based upon macroeconomic data, as the economic and social effects are most important in areas where the concentration of migrants is higher. At any rate, and as Goldring (2004) points out, it is necessary to establish a broader definition of development that is not limited to a purely economic outlook but rather encompasses both social and political development.

Social and political development of collective remittances

In this regard, the impact of collective remittances reaches well beyond the 3 x 1 Program for Migrants. To highlight only the amount of investments and dollars remitted, whether they are substantial or not, and recognize migrant philanthropy only from the position of government intervention and from the implementation of this program would be inaccurate, ahistorical and with a state-centric view. It is important to make clear that collective remittances are more than a government program, or more than just productive investments. Of course, they cannot be compared quantitatively with family remittances, which in dollar value are much higher, but by no means should the impact that some migrant organizations have on changing the political culture and creating social development in some communities be minimized.

Collective remittances, unlike family remittances, favour the organization of migrants and can play, according to empirical studies, a fundamental role in the social and political development of various regions enabling the implementation of public policies in this field of development. Also, in some cases, collective remittances can contribute to government accountability and re-establish ties with home communities by strengthening the roots with them (Torres, 1998 and 2000; Moctezuma Longoria and Perez Veyna, 2006). This process thus involves the creation of social networks over geographic spaces and national boundaries and therefore the creation of multilocal and transnational social spaces.

Both the migrants and the community members usually collaborate to manage the money and implement the project, thereby increasing their propensity to become politically engaged. To quote Burgess (2012: 54): “the mobilization and investment of the collective remittances can be politically empowering (…) their ability to pool resources and make a visible difference back home often increases their sense of political efficacy.” In certain cases, the use of such remittances to finance public goods brings organized migrants into the public sphere, increasing the possibility of interaction with public officials and thus leading to greater transparency and accountability in the use of resources, at least with regard to their joint projects. Consequently, these remittances give organized migrants political leverage that could be translated into political development.

Logic and mechanisms

However, collaboration with public officials is in most cases the exception rather than the rule. Most organized migrants finance and coordinate projects back home without any government involvement, often compensating for the lack of public investment in basic infrastructure or welfare. These society-to-society exchanges bring benefits to some poor communities. The way collective remittances become projects that benefit the entire community or a group within it depends on a range of factors including: the development of leadership and organizational development experience; the promotion of investment initiatives in social projects in the communities of origin; the historical basis and the legacies of state-society relations of each community, namely social capital, the participation of local governments and recently the commitment of academics, among others.

Case study: Sinaloa, Mexico

As revealed, the migration and remittances phenomenon has been significantly studied in Mexico. Extensive works focused primarily on issues related to development have been carried out, such as Durand (2007), Canales Cerón (2008; 2009), García Zamora (2005; 2009), Goldring (2004) and LozanoAscencio (2010), among many others. Nevertheless, there are no studies on collective remittances or academic papers analysing the 3 x 1 Program for Migrants in Sinaloa, despite being considered a state of migratory tradition. On this basis, it was considered of utmost importance to fill this academic gap.

Hometown Associations in Sinaloa: A required analysis 

In Sinaloa, the number of migrant associations established in the United States is limited (19) when compared to the number of clubs in other regions of the country such as Guanajuato (470), Jalisco (104), Guerrero (96) or Oaxaca (84).12 The majority of the clubs from Sinaloa were created after 2002, giving a total of 13, which represents 76.47 per cent of the state total. In turn, the clubs created before that date represent 23.53 per cent of the state total (see 12 These figures, obtained from the Institute for Mexicans Abroad (IME), are limited. According to Duquete-Rury and Bada (2013), there is a substantial number of non-registered clubs with such Institute that also support their home communities with various projects. 18 Table 2). These numbers corroborate and coincide precisely with the research conducted by Duquette-Rury and Bada (2013), which shows a significant increase nationwide in the creation of clubs as a result of the implementation of the Program 3 x 1 for Migrants. In such research, it was found that the percentage of clubs that were created after 2002 in Mexico represents 76 per cent of the total and only 23 per cent were created before that date, reproducing the data found in Sinaloa.

In such a way and following the analysis described above, the emergence of clubs before 2002 was of a spontaneous nature. The financial support of the Program 3 x 1 for Migrants then stimulated migrants, the state and municipal governments to encourage the establishment of clubs and the scope of their projects, given the budget constraints granted by the federation to municipalities. The main place where HTA’s emerged is the state of California with 63.15 per cent, followed by Arizona with 21.05 per cent. 19

Furthermore and according to Duquette-Rury and Bada (op cit.), the migration intensity level developed by CONAPO, is a good tool to explain or even predict the existence of migrant clubs created by the government. Therefore, municipalities with very high, high and medium migration intensity levels are more likely to have an association created by government influence compared to places with lower migration intensity. In this sense, Sinaloa has only one municipality with a medium migration intensity level,13 which may explain to some extent the low participation of Sinaloa immigrants in creating clubs that are interested in projects that benefit their communities of origin. 20

In the first stage, the analysis was focused on the 3 x 1 Program for Migrants and their impact on regional development. However, it was tentatively found that the impact of the program is minimal, and in 2013, only took place in a community called “Elota”. Given this, the study now includes collective remittances, specifically focusing on the municipality of “Rosario” where this phenomenon was detected and, therefore, extending the scope and importance of the research.

Description of the municipalities of “Elota” and “Rosario”

The municipality of “Elota” is located in the south-western part of the Sinaloa state. According to INEGI (The National Institute of Statistics and Geography) in the last census conducted in 2010, a total of 42,907 inhabitants were registered, representing 1.6 per cent of the state population. Of these, 5,339 (13.04 per cent) were in extreme poverty. Elota is considered to have a medium grade of municipal marginalization occupying the 9th place at the state level with a very low grade of municipal social backwardness. Regarding the degree of migration intensity, according to CONAPO, this municipality is ranked 6th statewide with a low level (see Appendix Map 3). Regarding the percentage of households receiving family remittances, this amounts to 9.20 per cent of all households in Elota (Uribe Vargas et al., 2012).

For its part, the municipality of Rosario is located in the southern part of the Sinaloa state. Rosario’s total population in 2010 was 49,380 people, representing 1.8 per cent of the state total, of which 5,541 (12.97 per cent) were in extreme poverty (CONAPO, 2013). Rosario has a medium level of municipal marginalization, ranked 10th at the state level and presents a very low degree of migration intensity, ranking 13th in the state context (see Appendix Map 3). The total of dwellings receiving family remittances in Rosario amounts to 12,861 accounting for 1.8 per cent of the municipal total 13 As shown in Appendix Map 3, referring to the level of migration intensity in Sinaloa, only 2 municipalities have a very low level, 15 are in the low category and 1 municipality is in the medium category. 21 (Uribe Vargas et al., op cit.).

Findings

Initially, it was found that in the municipality of Elota the local government had been conducting the 3 x 1 Program, which has played an essential role in shaping the club called “Paisanos Elotenses” and connecting migrants from this community in the United States. This management has resulted in the construction of a regional rehabilitation centre for disabled people, with an initial investment of more than US 229,000 dollars in the first phase, which is an historical amount in reference to the support granted to the 3 x 1 Program in the state. Thus, it was tentatively found that the only municipalities currently receiving collective remittances in 2012 are Elota and Rosario, and it is in these locations that there has been subsequent fieldwork.

In the municipality of Rosario, there is no collaboration between migrant clubs and government authorities. An example of this is a nursing home, which was built only with collective remittances sent by the HTA called “Club Rosario”. Currently this club provides a monthly amount for the purchase of groceries and maintenance of the facility, among other expenses. For its part, the local government is responsible for the payment of salaries to employees of the nursing home, but there is no link or negotiation between both entities, which highlights HTA’s lack of trust towards the current government.

Economic impact

Some of the conclusions found to date corroborate the hypotheses raised. The economic impact created by the 3 x 1 Program and collective remittances was found to be negligible with very few jobs created with the construction of public works and otherwise. No poverty reduction and economic development in the community were found as a result of these remittances. 22

Social and political impact

In terms of social impact, it is clear that the works improved the quality of life for certain groups within the communities analyzed. However, this does not necessarily imply leverage for social development at the municipal level. On the other hand, the political impact generated in Sinaloa by the 3 x 1 Program contrasts with that observed in some communities in other states of Mexico, finding no interest in issues such as transparency and accountability in the development of the works carried out in collaboration with the government. Possible previous discouraging experiences with governments in the case of “El Rosario” could have created mistrust and disinterest in working with the municipal government in such projects, although there is no absolute certainty about this at the current stage of research.

Finally, without a concrete conclusion thus far, one can observe a very limited interest by the Sinaloa HTA’s to raise funds for their communities. Some researchers attribute this indifference to issues of a sociological nature but there are other factors such as the level of migration intensity of the various municipalities that comprise it, as well as the lack of an institutionalized policy to promote the approach with migrants at the municipal level in Sinaloa that, as a result, discourages them from carrying out and getting involved in community-based projects. In fact, in the study conducted by Duquette-Rury and Bada (2013), this has been pointed out by the leaders of the HTA’s as one of the major problems or obstacles to the development of these organizations . 14 In the survey conducted by Duquette-Rury and Bada (2013: 84), the main obstacles mentioned by the HTA’s members were: 1. “Improving organizational capacity, encourage more solidarity with club members and develop the ability to keep their club organized” (40%); 2. “Inability to finish projects successfully and raise sufficient funds” (15%); 3. Lack of attention from the government, especially at the municipal level but also at the consulates throughout the Unites States (10%). 23

Either way, it should be noted that participation in such projects takes time, trust, experience, good leadership and organizational learning, among others. In this regard, NGO’s can play an essential role as mediating institutions participating and getting involved in technical issues and organizational development to encourage the participation of HTA’s in projects that benefit their communities.

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Past Visiting Fellow Mi experiencia en el área de la investigación social, política y económica ha permitido contribuir con mi desarrollo personal en un mejor entendimiento de las problemáticas que aquejan a mi estado y país. A corto y mediano plazo, dichos conocimientos se traducirán en impactos positivos para la sociedad mexicana a través de investigaciones que permitan generar políticas públicas más eficientes y eficaces.