Monday, May 23, 2005

Whose money makes the world go round?

migdev5
Time for a change -- something happening here that is potentially good. Francis Calpotura at the Transnational Institute for Global Research and Action (TIGRA) is pursuing an idea that just might give some of the dispersed human flotsam of globalization a little more power over their lives.

As capital moves freely round the World Trade Organization-dominated globe, labor follows, trying to earn enough to stay alive and send something home to those left behind. For many poor countries, remittances from emigrants fuel the domestic economy. In 36 out of 153 "developing countries," remittances are larger than all other capital flows. In Haiti and Jordan they over 22 percent of GDP; in Nicaragua, El Salvador and Jamaica, more than 13 percent; and in the Dominican Republic, Philippines and Honduras more than 8.5 percent. That is, an awful lot of poor people, worldwide, depend on what housecleaners, gardeners and dishwashers earn in the richer countries. International agencies estimate that somewhere between $200 and $300 billion were involved in 2003.

So how does that money flow back home? Perhaps two-thirds of it runs through unregulated networks such as the hawala system by which mostly Muslim financiers trade debts internationally. But at least one-third moves through the global international banking system which extracts its cut through fees ranging from 16 to 28 percent. Vijay Prashad reports that "MoneyGram, Western Union, Wells Fargo, Bank of America, Citibank and others charge a transaction fee (7-14%), an exchange rate commission (2.5%), an interest float on funds prior to transmission (1.5%) and often an additional fee of 5-10% for those who have no bank account."

TIGRA wants to organize the migrants to take back their hard earned dollars from the big banks. Their demands include:

  • Lower fees, increase transparency and access;

  • Expand the reach of transfer services to rural areas;

  • Clear the debt of countries of origin, specially “odious loans;”

  • and Increase investments in poor communities in the US

But TIGRA knows that this is not just another problem nationalistically spawned by US capitalists. Transnational exploitation of poor workers requires transnational responses. These might include:

  • Research projects with activists from remittance-receiving countries on US-based financial institutions' ties with home country banks and businesses; on the debt burden of countries to these banks, specially “odious loans;” andother investments and financing in the country.

  • Creating country-- or hometown-based -- profiles of remittance practices by migrants, their families and communities.

  • Setting a Day of Action to demand lower fees from financial institutions and publicize their role in foreign debt and forced displacement.

  • Conduct a Working Committee for Strategy Meeting at next World Social Forum.

All these initiatives seem a little skeletal and tentative, given the magnitude of the problem. But the vision is undoubtedly right. In a world in which capital is global, the thinking of those of us who intend not to let it run over us must also be global.

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