Remittances from unlikely places are helping poor countries in the downturn
Apr 28th 2012 | TAPACHULA
IN TAPACHULA, a furnace of a city in southern Mexico, people line up inside an air-conditioned branch of Banco Azteca to process their remittances. Last year Mexicans received an estimated $24 billion from friends and family working abroad, mainly in the United States, with which Mexico forms the world's busiest remittance corridor (see map). But a closer look at the Tapachulan queue shows how the remittance business is changing. Many are not Mexicans receiving cash from America, but migrant workers sending it back home to Guatemala or Honduras. “Very similar to what happens at the other border,” observes Jorge Luis Valdivieso, the bank's regional administrator, referring to Mexico's better-known northern frontier.
The value of remittances to poor countries is enormous. Since 1996 they have been worth more than all overseas-development aid, and for most of the past decade more than private debt and portfolio equity inflows. In 2011 remittances to poor countries totalled $372 billion, according to the World Bank (total remittances, including to the rich world, came to $501 billion). That is not far off the total amount of foreign direct investment that flowed to poor countries. Given that cash is ferried home stuffed into socks as well as by wire transfer, the real total could be 50% higher.
The world’s biggest retailer is sent reeling by allegations of bribery
Apr 28th 2012 | MEXICO CITY AND NEW YORK
MOST weeks it slashes prices. This week it was Walmart's turn to be slashed. Jittery investors cut $10 billion from the value of its shares after the New York Times on April 22nd reported insiders' accounts of bribery in Mexico to accelerate the retailer's expansion there.
Walmart's Mexican arm, Walmex, stands accused of greasing local officials' palms over several years to speed the granting of permits to open new stores. Managers at group headquarters in Bentonville, Arkansas, were apparently informed about the payments (which were said to be made through intermediaries) in 2005. They launched a probe, but wound it down without disciplining anyone. They did not disclose any of this to the authorities until last December. Walmart says it began an “extensive” investigation last autumn into its compliance with the Foreign Corrupt Practices Act (FCPA), America's anti-bribery law. In a statement after the article appeared, it said: “If these allegations are true, it is not a reflection of who we are or what we stand for.”
This Love is Not for Cowards: Salvation and Soccer in Ciudad Juárez. By Robert Andrew Powell. Bloomsbury USA; 272 pages; $25. Buy from Amazon.com
CIUDAD JUÁREZ, an important stop on the cocaine trail to America, has long topped the list of Mexico's most violent cities. By contrast its irredeemably hopeless football team, the Indios, is more used to life at the bottom of the rankings. Following 27 consecutive games without a win, it recently became the worst team in the history of Mexico's primera división.
Robert Andrew Powell, an American journalist, arrived in Juárez at the end of 2009 as the drug war was heating up and the Indios were fighting to stay in theprimera league. After taking care each night to bolt the four locks on the door of his pastel-coloured flat (“like military housing for an army of Teletubbies”), he decided to highlight Indios wins on his calendar and to mark murders on a wall-map in red felt-tip. After a month he gave up, no wins to report and the map already soaked crimson.