US immigration curbs cut Mexican remittances

WASHINGTON (Reuters) - Growing anti-immigration sentiment, tighter border controls and a weaker job market in the United States slowed the flow of money sent home by Mexican migrant workers this year, the World Bank said Friday.

While Mexico ranks third in the world after India and China when it comes to remittance flows, the World Bank said in 2007 transfers to Mexico grew by only 1.4 percent in the first nine months compared to those months last year, to around $25 billion. This compares to over 20 percent annual growth from 2002 to 2006.

Overall, migrant workers sent more than $240 billion home to developing countries this year, more than last year's $221 billion, the World Bank said in its annual report on global remittance trends.

This is twice the amount wealthy nations give poor countries in development aid and nearly two-thirds the size of foreign direct investment flows into developing states.

The actual size of the transfers could be much much larger since not all remittances were recorded, the bank said.

"The slowdown in Mexico is partly due to the weak job market in the United States, especially in the construction sector," the World Bank said.

"Perhaps more importantly, the slowdown may be attributable to tighter border controls and increased anti-immigration sentiment in the United States," the Washington-based development institution added.

It said arrests along the U.S.-Mexico border fell by nearly 50 percent from 2000, showing fewer migrants were trying to enter the United States without proper documents.

Recent actions in the United States to curb illegal immigrants coming into the country also reduced the number of seasonal migrants and their ability to send money home, especially through formal channels, the bank added.

While Mexico appears to be affected by the tougher immigration stance in the United States, the World Bank said elsewhere in Latin America and the Caribbean remittances grew.

For example, money sent to El Salvador rose by 7.7 percent year-on-year; flows grew by 11 percent to Honduras and by 14.4 percent to Guatemala this year.

More money being sent to El Salvador could be due to the Temporary Protected Status of more than 200,000 Salvadoran migrants in the United States, the World Bank said.

It said while most migrants from Latin America preferred to go to the United States, other destinations, especially in Europe, such as Spain, were becoming popular.

The World Bank also said remittances were not only flowing from migrants to poor countries. Richer countries such as France, Spain and Britain were among the world's 10 top recipients of the $318 billion in global remittance flows in 2007, mainly from migrants working in other wealthier European countries. (Reporting by Lesley Wroughton; editing by Vicki Allen) ([e-mail]; [phone]; Reuters Messaging: [e-mail]))