SECTIONS
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NEWS
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 Mexican steel industry running swiftly
Monterrey, Mexico - Mexican steel industry has triggered its share in the. automotive sector and everything leads to think that its expansion in this market will continue, therefore substituting imports.
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Electrolux supplier coming to Juarez
Ciudad Juarez - MS Internacional, a US Company, will. start
operations next May in Ciudad Juarez as another of Electrolux s suppliers. MS Internacional will be making an additional invest of US$5 million and will be generating around 200 new jobs.
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Smiths transfers 534 jobs to Mexico
London, England - Smiths Group Plc, the British aerospace and medical equipment manufacturer,. announced today its plans to close its manufacturing operations in a plant at Kent, England, and transferring some of these jobs to Mexico.
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India displaces Mexico
Mexico City India is no threat to Mexico anymore, as of January it
became real world, by displacing Mexico in apparel and textiles
sales to the USA.
According to figures from the Offices of Textiles and Apparel
(OTEXA), in January India s share of the market amounted to 6.68%.
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Navistar produces model in Mexican plant
Mexico - Navistar International s Mexican plant located in Escobedo,
Nuevo Leon, will be responsible to manufacture the model of an
autobus called Traveler , designed for short distances between cities.
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Bombardier will transfer some of its production to Mexico
Montreal, Canada The Canadian aerospace company, Bombardier
Aeronautics, headquartered at Montreal, informed the transfer of
airplane fuselage panels production from its factory in Belfast, Ireland to a plant in Queretaro, Mexico.
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Auto motors exports to the USA recovering
Mexico City - Mexican export automotive industry is not in halt anymore, it has started improving its presence in the US automobiles market by increasing in January its share in imports to more than one fifth, a share it had not reached in four years.
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ARTICLE OF THE WEEK
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U.S., Mexico Deepen Economic Ties - Part 2
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By Jesus Cañas, Roberto Coronado and Robert W. Gilmer
Federal Reserve Bank of Dallas |
 Immigration and Remittances
For most Mexicans who emigrate to the U.S., the attraction lies in the higher wages north of the border. A significant number of expatriate workers earn enough to send money to family in Mexico, providing a major source of income for many villages. The money has been flowing for decades, but the opening of Mexico's economy over the past dozen or so years has expanded the ways citizens working in the U.S. can send money home. [3]
Workers' remittances now occupy second place as a source of foreign exchange in Mexico, behind maquiladoras and ahead of tourism and foreign direct investment. The remittances have risen from $84 million in 1960 ($531 million in 2004 dollars) to $16.6 billion in 2004, with an increase to $20 billion estimated for 2005. Two advantages of remittances, when compared with other inflows, are that they have been stable and countercyclical. [4]
Few studies analyze the impact of remittances on developing economies, and even fewer look specifically at the impact on poverty levels. Gerardo Esquivel, a researcher at Colegio de México, began with a look at the extent of poverty in Mexico.
He used three poverty definitions: food poverty, capabilities poverty and assets poverty, meant to be roughly equivalent to extreme poverty, poverty and moderate poverty. (1) A household is considered to be food-based poor if its net per capita income is less than the amount of money necessary to cover basic food expenses. This category included 20 percent of Mexico's population in 2002. (2) A household is in capabilities poverty if its members cannot afford to cover their basic expenses of food, health and education. This applies to 26.5 percent of the population. (3) A household is in assets-based poverty if its members cannot cover expenses of food, health, education, clothing, home and public transportation. About half of Mexico's population fits into this category.
Esquivel then considered the impact of remittances on poverty in Mexico. [5] In 2002, about 6 percent of Mexican households received money in remittances-3 percent of urban households and 10 percent of rural families. Most households receiving remittances are in central and southern Mexico. They are not concentrated in the poorest states-such as Chiapas, Guerrero, Oaxaca, Puebla and Veracruz-because the costs of getting into the U.S. make it difficult for someone with extremely limited funds to migrate. Instead, the remittances go to better-off states such as Michoacan, Durango, Guanajuato and Zacatecas. These four states are home to more than one-third of all Mexican households receiving remittances.
Esquivel found that Mexico's income distribution is remarkably more uniform once remittances are taken into consideration (Chart 2). For example, over 45 percent of all households that receive remittances would fall in the bottom 10 percent of the income distribution if the remittances were removed. However, only 12 percent of these households still belong to the lowest decile if remittances are included in their income. (See More)
About the Authors
Cañas and Coronado are assistant economists at the El Paso Branch of the Federal Reserve Bank of Dallas. Gilmer is a vice president at the Federal Reserve Bank of Dallas.
Notes
3. "Workers' Remittances to Mexico," by Roberto Coronado, Federal Reserve Bank of Dallas Business Frontier, Issue 1, 2004.
4. "Workers' Remittances: An Important and Stable Source of External Development Finance," by Dilip Ratha, in Global Development Finance, Washington, D.C.: The World Bank, 2003.
5. "Remittances and Poverty in Mexico: A Propensity Score Matching Approach," by Gerardo Esquivel and Alejandra Huerta-Pineda, Colegio de México, Working Paper, 2005.
6. "Trade, Manufacturing Put Mexico Back on Track in 2004," by Jesus Cañas, Roberto Coronado and Robert W. Gilmer, Federal Reserve Bank of Dallas Houston Business, March 2005.
About Southwest Economy
Southwest Economy is published six times annually by the Federal Reserve Bank of Dallas. The views expressed are those of the authors and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System.
The point of view is strictly from the author and does not represent the vision on any of the author institutions relationships.
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MEXICO'S WEEKLY HEADLINES
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| » General Motors will construct new plant in Mexico
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| » Ridge Property Trust expands into Mexican maquila market
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| » Samsung will import electricity from the USA
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| » Mexico and Japan promote Clean Industry financing
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| » Danaher Motion looking for suppliers in Ciudad Juarez |
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