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Mexican hometown associations and development opportunities.

International migration significantly influences the politics and economics of many countries today. Migration and worker remittances, in particular, support economic growth in sending countries all over the world. Through remittances, migration has created new opportunities for social and economic change in rural areas. However, remittances are only part of a broader phenomenon of transnationalism. Transnational immigration networks are contributing to the integration of countries into the global economy, demonstrated through various levels of economic interconnectedness, including immigrant-based donations, small and large investments, trade, tourism, and unilateral transfers.

In 2003, 8 million adult Mexican immigrants living in the United States sent $14 billion in remittances to their relatives. Globally, annual remittances total over $100 billion. Over the past 10 years, these transfers to Mexico have reached $69 billion. The influence of remittances on home countries' economies has been significant, particularly in economically depressed rural areas. Aside from remittances, immigrants have also formed small philanthropic organizations, known as hometown associations (HTAs), to raise thousands of dollars to support small local development projects.

HOMETOWN ASSOCIATIONS, DEVELOPMENT, AND LOCAL CHANGE

There are at least 2,000 of these associations across the United States working in various cities and states in Mexico, including most prominently, Guanajuato, Zacatecas, Jalisco, Puebla, and Michoacan. These organizations are part of a growing trend in transnational social movements that have been influenced by migration patterns as well as by globalization. (1) HTAs fulfill several functions, from social exchange to political influence to pursuit of low-scale development goals in their home communities. The connections established among remittance senders from similar places of origin lead to spontaneous out coordihated efforts to support not only their relatives but also their towns. By forming these organizations migrants can retain a sense of community as they adjust to the U.S. (2)

HTAs are a subset of what some observers assert is a growing number of Transnational Migrant Organizations. (3) These groups are increasingly motivated to take advantage of the upsurge of family remittances and the need for economic aid in their homelands. HTAs have sought to retain cultural ties and improve their home country communities. Organizations made up of Salvadorans, Guatemalans, Mexicans, Dominicans, and people from other countries have increasingly been working toward a betterment of their towns. (4)

The emergence of HTAs raises important questions about their contribution to development and their potential to forge alliances with other actors in the development community. This article analyzes HTAs and their relationship to development in rural Mexico. To do this, we first evaluate the organizational nature and capacity building of hometown associations, and then investigate their partnerships and collaborative capacity, as well as their long-term durability and impact on development in Mexico. Finally, we review a partnership scheme between the three levels of government (local, state, and federal) and hometown associations known as 3x1.

Methodology

This policy brief synthesizes a larger report on the development roles of hometown associations and the effectiveness of the 3x1 matching-grant program. The study included interviews with more than 100 hometown associations operating throughout the U.S. and working in various Mexican states. Association leaders were asked about the type of activities they perform, the length of time their organization has been working, and their organizational structure, as well as how they identify projects and collaborate in partnership with other organizations.

The study also visited four Mexican states (Zacatecas, Jalisco, Guanajuato, and Michoacan) and conducted on-site visits to more than 40 projects that were part of the 3x1 program. The visits included interviews with local community representatives, municipal leaders, and representatives from the state and federal governments.

Another important component of this project was an analysis of more than 500 3x1 projects carried out in the four states. A data set was created that included information about the demographic composition of the communities and municipalities, along with municipal budgets and per capita distribution in the communities under their jurisdiction. To those values, information was added about per capita gross domestic product, human development variables, and income in the municipalities. This information created more thorough profiles of the communities in terms of their capacities to implement specific projects.

These HTAs are located throughout the U.S., with the highest concentration in southern California and the Chicago metropolitan area. The HTAs work in various states in Mexico. The average life span of the HTAs interviewed was 11 years. While 47 percent were created after 1995, only 20 percent were founded prior to the 1990s.

Organizational nature

The organization of these associations is relatively cohesive, with close-knit memberships that follow basic rules of group discussion and decision making, and adapt to changing circumstances either by joining other groups to form federations or by electing new authorities. Most of the organizations are an amalgam of families who join together to improve their hometowns. Once formed, the HTAs have relatively stable life cycles and maintain a core of active members, who are in turn able to draw support from hundreds of other immigrants. Club leaders are usually democratically elected by the members or board.

Capacity building

The success of HTAs at capacity building is determined by their ability to identify projects, allocate resources, and plan for the implementation of their projects.

Project identification

There are three main factors that determine how HTAs identify community needs. First, the extent to which an HTA has a relationship with a liaison in the hometown--whether an individual or a group--influences the HTA's selection of projects. The hometown counterpart often relays the needs or priorities of a given community. Second, project decisions are based on the U.S. club leaders' perception of hometown needs, often suggested by family members and friends still living in Mexico. Finally, certain clubs choose to focus on specific causes, which they work on throughout the life of their organization. Two other influential factors are unexpected emergencies in the hometown caused by natural disasters and partnerships with other institutions.

Usually, an HTA member visits the community, returns with a list of identified needs, and proposes to work on three or four activities, while concentrating efforts on one larger project. The decision to work on a given project is often connected to a renewed sense of belonging to the hometown and a practical obligation to improve the town's condition--specifically, to help prevent future migration due to economic distress in the community.

The majority of HTA work includes basic assistance for health and education services, church support, town beautification, and construction and improvement of public infrastructure. Some HTA leaders fear that focusing on projects that should be within the responsibility of the local, state, or federal government could encourage governments to neglect services because they expect migrant groups to provide them. This possibility does not, however, prevent HTAs from working in partnership with governments.

Types of HTA Projects

Resource allocation

Hometown associations generally embark on projects yielding tangible results that will be immediately recognizable to both members and town residents. They understand that their fundraising base is limited and consequently do not usually engage in overly ambitious projects. The average amount raised by an HTA for a given project is usually under $10,000 a year. In rural Mexican communities, this represents a significant contribution; in a town of less than 6,000 inhabitants, the annual municipal budget allocation for public works is often less than $50,000.

A hometown association allocates funds based on a preliminary estimate of project costs provided by a liaison in the hometown. In most cases, a lump sum is disbursed and the members ensure that the money is spent as budgeted to acquire materials and pay labor costs. Immigrants donate their resources directly to a project and incur no intermediation costs, because the counterpart in the hometown is usually a relative or community member who volunteers to oversee the project. While not compensated for the work, he or she nonetheless earns a reputation as the caretaker of HTA projects.

HTAs disburse the funds for a given project in one of three ways: One, a leading member of the association brings the funds directly to the hometown. Two, the association deposits the funds in a local bank branch close to the hometown. Three, when partnering under the 3x1 program, which will be discussed in greater detail later in the article, the funds are deposited into a designated bank account.

Project implementation

In order to carry out a project, an HTA coordinates with a contact person in the hometown whenever possible, schedules activities, disburses funds, oversees the work performed, and provides follow-up evaluations. The hometown counterpart provides information about costs, work schedule, and budgets, and essentially plays the role of foreman for the HTA. Because most cases of HTA work involve some kind of construction (e.g., church repair, health-center or school construction, street paving, park or plaza improvement, and cemetery maintenance), project oversight requires monitoring building progress and evaluating the final result.

Partnership and collaborative capacity

The majority of HTAs have contacted and collaborated with other institutions based in Mexico. Nearly 80 percent of the HTAs reported approaching municipal leaders to discuss their projects and to coordinate efforts to distribute resources. As a result, HTAs are increasingly linking with mayors and other local government officials. The Mexican federal government has inserted itself into the partnerships through a range of formal and informal relationships that culminated with the Citizen Initiative program, also known as Iniciativa Ciudadana 3x1, officially set in motion in 2002. A matching-grant program, 3x1 involves the three levels of the Mexican government in HTA activities. Half of the clubs interviewed said some of their projects were part of the 3x1 program.

Long-term durability

The timeline of a project and the follow-up are critical to development. Most associations have worked for 10 consecutive years implementing a range of projects. Every year, they spend at least six months developing and carrying out a given project. Moreover, many of the HTA projects involve some form of construction, and wear and tear demand significant maintenance costs. Some associations provide continuity to their original projects.

Development impact

Hometown associations have a direct impact on communities by providing goods that benefit collective needs in health, education, and economic infrastructure. Four important contributions of HTAs are the aggregate volume of the donations to mostly rural Mexico, the effect on the localities vis-a-vis local government resources allocated for public works, the effects of the projects themselves, and the impact on civic participation.

Aggregate volume

Although thousands of Mexican hometown associations exist, the total amount of their donations is unknown. One method of estimating the aggregate volume involves looking at the funds allocated under the 3x1 matching-grant program with the federal government. In 2002, the Mexican government allocated $15 million to match HTA donations. In addition, according to the interviews, 50 percent of HTAs participate in projects under the 3x1 scheme. The remaining 50 percent, while not participating in the 3x1 program, nonetheless invest similar amounts. Thus, at a minimum, HTAs are donating $30 million to Mexico.

Furthermore, some states operate "2x1" programs independent of 3x1, in which the state and municipality match HTA donations. One additional factor to consider when estimating total club contributions is that those HTAs registered by the consulates and the foreign-affairs office in Mexico represent only a small sample of a much larger group. It is likely, therefore, that the aggregate annual donations are significantly higher than $30 million.

Effects on localities

Perhaps more striking than the volume of HTA donations on a national level is their substantial effect on towns in rural Mexico. In many communities, HTA donations are equal to local government budgets for public works. This is particularly relevant in towns with populations under 3,000. The study looked at 62 communities in Mexico where the HTAs interviewed are working on a range of projects. Contributions averaged $23,000 per town and represented up to 27 percent of the municipal budget allocated for public works. As the table below shows, Mexican HTAs operate in communities with populations as small as 1,000 people--representing an average donation of $7 per resident.

Effects of the projects

HTAs implement projects of singular importance to the towns they serve. Infrastructural activities, in particular, have a positive impact on isolated, vulnerable communities by expanding access to services to underserved populations. An increasing number of projects deal with improving access to larger cities (by building and paving roads, for example, thus facilitating public transportation) and extending services such as electricity, sewage treatment, and health care to the entire community. Public works also create a demand for labor, which is supplied by local residents. Most of these communities have high unemployment rates, and a given project can create at least 20 new jobs.

Local organizations, empowerment, and civic participation

HTAs play an important role in transforming political culture and local politics in the areas where they operate. The associations have pressured governments to meet higher standards for transparency and accountability by making specific demands for the projects they fund. They have required governments to produce clear budgets and timelines for the implementation of projects, and have followed up with insistent requests that the money be accounted for thoroughly.

Many HTAs create local counterparts to help coordinate the implementation of their projects. These are generally known as committees and act as liaisons between the club and the governmental institutions or the contracting parties. The work of these groups has energized participation in local issues and has created greater input on local decisions. The committees promote civic participation as they monitor the progress of a project and its finances.

INICIATIVA CIUDADANA 3x1, HTAs, AND DEVELOPMENT OPPORTUNITIES

The success of hometown associations led to the involvement of municipal, state, and federal governments in matching the migrants' donations. One key program has been the Iniciativa Ciudadana 3x1. This is a matching-grant program between Mexican immigrant philanthropic associations and the three levels of the Mexican government. The program was officially implemented in 2002, after hometown associations demanded partnership in projects that benefit their communities of origin.

The influence of Mexican hometown associations in rural communities, as well as their outreach to state, local, and even national government officials, leads to partnerships on different projects. Hometown associations from states such as Zacatecas, Durango, and Michoacan originally established informal relationships with government officials on a project-by-project basis, depending on the initiative of the HTA, a government official, or the state and the federal governments who sought funds from special appropriations.

These partnerships increased over time, particularly since the mid-1990s. Formal programs and institutional mechanisms of communication, such as the state commissions in support of migrants, emerged from the initial collaborations. Scholars and practitioners argue that the first kind of partnership between an HTA and a state office occurred in Zacatecas. Miguel Moctezuma notes that in 1993, Mexican clubs and government officials (Luis Donaldo Colosio, then head of Secretaria de Desarrollo Social or SEDESOL, the Department of Social Development, and Arturo Romo, governor of Zacatecas) agreed to implement a 2x1 program which involved investment in social work in several towns in Zacatecas chosen by HTAs. (5) Eventually the initiative expanded to national coverage and included municipal governments.

In 2002, Iniciativa Ciudadana projects totaled $43.5 million, a quarter of which came from the contributions of Mexican hometown associations. Zacatecas received over one-third of the total. Along with Jalisco, Guanajuato, and Michoacan, these four states represent nearly two-thirds of the total allotment for the 3x1 program at the national level.

All states participate in the program, which operates in 1,334 municipalities with high emigration rates. The range of infrastructural activities is quite varied and usually reflects the interest of the HTA, which approaches the government institutions (SEDESOL or the state or municipal government). State and federal approval depend on criteria that vary from state to state.

We analyzed more than 500 projects that took place in four states--Zacatecas, Jalisco, Guanajuato, Michoacan--which represent more than 30 percent of Mexican migration to the United States. This project also involved visits to more than 20 communities in those Mexican states. This section focuses on these four states.

One-third of 3x1 projects deal with public infrastructure, generally involving street pavement, street improvement, construction of bridges, etc. Ten percent of the projects focus on electrification and 10 percent on economic infrastructure, such as irrigation systems or wells. With the exception of Guanajuato, church-related work represented a smaller proportion of the projects. More than 10 percent of projects focused on social infrastructure, e.g., the construction and/or maintenance of parks, gardens, or cemeteries.

More than two-thirds of these projects were implemented in populations under 3,000. These are predominantly rural areas, which receive a significant volume of remittances and have no financial institutions present. The majority of these communities are poor, with average monthly incomes below $400 and significant needs in public and economic infrastructures. Average donations under the 3x1 program were $40,000 per town.

These donations are striking when compared to the budget allocation for municipal public works in the locality (a locality is a division of a municipality). The average ratio of donations vis-a-vis the local government budget for public works in each community is particularly significant in smaller communities, which are the major recipients of HTA funds. In areas with populations under 1,000, which receive nearly 50 percent of HTA donations, the contributions are seven times the budget allocated for public works.

Zacatecas

Hometown associations working in Zacatecas are among the largest and have formed at least 13 federations. They forged partnerships with state officials in the early nineties and by 2002, their contributions reached at least $16 million.

Jerez and Villanueva are two of the municipalities studied. Both are representative of Zacatecas emigration trends: Nearly 20 percent of households have a relative living abroad, and they receive remittances averaging nearly $400, seven to eight times a year. A number of projects are taking place in each town, the majority involving public infrastructure. Together, the projects in these two towns represented 10 percent of the 3x1 projects implemented in Zacatecas in 2002. Villanueva received nearly $1 million in donations ($250,000 from HTAs) and Jerez $600,000.

Jerez is a municipality an hour and a half from the city of Zacatecas with a population of 55,000, 30 percent of whom are part of the active labor force. The city has three banks, and it is the center for more than 100 small communities in its jurisdiction. In 2000, the municipality had a budget of $7 million, half of which was dedicated to public works.

Current projects include street paving, rebuilding of a primary and secondary school, and setting of an irrigation system. San Juan del Centro, whose population is 415, implemented 11 of the 28 3x1 projects carried out in Jerez, including street paving and school construction. The total investment in the community was $246,000 (one-quarter from the work of three HTAs).

Two of the communities visited in the municipality of Villanueva were Colonia Felipe Angeles and Boca de Rivera. In the case of Felipe Angeles, the main streets were paved to allow for easier access to public transportation. In Boca de Rivera, the 3x1 program constructed a health center, which reduces the risk associated with long-distance travel for treatment of emergencies.

Although HTAs ultimately choose the projects, many of the projects in Zacatecas reflect to a significant extent the preferences of government officials, who perceive infrastructural work as the best kind of partnership with Mexican clubs. Public infrastructural work is also well received by community leaders and HTAs, as it reflects an idea of development that has historically equated construction with progress.

Jalisco

Jalisco clubs represent the second-largest proportion of hometown associations and the second-largest partner in the 3x1 program after Zacatecas. In 2002, 122 projects were implemented in 30 municipalities. Nearly half of the projects carried out in the state dealt with public infrastructure, and 10 percent focused on water-related projects, such as water treatment plants and sewage systems.

The state government has a foreign-affairs office which provides outreach to its diaspora by promoting celebrations, including a day for the Jaliscienses ausentes, or "Jaliscans abroad." The office also coordinates development projects outside 3x1. One such project, Por Mi Jalisco, supports small-business investment projects.

Four municipalities were visited in Jalisco. San Cristobal de la Barranca reflects the range of projects carried out in the state. The region is predominantly agriculture-based, although agricultural production beyond self-subsistence has been curtailed due to increased competition since 1994. Employment is scarce--only a quarter of the population is economically active. The majority of the residents have a fourth-grade education and no access to health care.

The migrant community became involved in various projects in the town, but most of the initiative came from the municipal leaders, who approached the emigrants. The clubs fundraised for three specific projects: electrification, street paving, and school rehabilitation. The last project also provided meals to the needy and elderly.

The local mayor stressed that the municipality is overburdened by the allocation of resources under the 3x1 scheme. As a result, it had to contribute in kind with labor and equipment. Still, the mayor appreciates the support from 3x1. Like many mayors in rural Mexico, he is a former emigrant who returned to Mexico. He has sought to reorient 3x1 work toward wealth-generating activities that create jobs. He identifies at least three areas of potential investment: processing mangos, prunes, and onyx. In his view, this strategy would help develop the town, which the federal government considers highly marginalized.

Guanajuato

Many regions within Guanajuato are identified as high emigration areas, and the state government has adopted a policy to work with migrant communities through a series of 3x1 and 2x1 programs. The communities with high out-migration rates are generally labor-intensive agricultural areas with monthly incomes below $400. Unemployment rates are higher than the national average, and the towns generally lack most commercial and industrial services.

Guanajuato created an interagency commission, the Comision Estatal de Apoyo Integral a los Migrantes y sus Familias, which addresses a number of issues relating to emigrants. In 2001, the state initiated a 2x1 program with an investment of 12.9 million pesos (about $1.2 million). The Direccion General de Comunidades Guanajuatenses en el Exterior, in coordination with the Casas de Guanajuato, promoted the program in the United States. In 2002, with the implementation of the 3x1 program, the number of projects increased.

The municipality of Abasolo is illustrative of the range of projects that take place in Guanajuato, which represent nearly a quarter of all projects in the state, with several communities working within the 3x1 program. With a population of 80,000, and 25,000 in the municipal capital, Abasolo has a high migration rate, and nearly two out of 10 households receive remittances from California and Texas. Seven out of 18 projects in Abasolo included investment in church repairs. The remaining works concentrated predominantly on electrification of street lights. The total allocation of funds was just over $400,000, of which the immigrant associations donated a quarter.

According to the mayor of Abasolo, the state and federal offices allocate funds very slowly, which affects the implementation of other projects. Immigrants and state government officials agree that the approval process is lengthy: the process of implementation, from government receipt of the HTA proposal to the authorization of funds, can take up to six months.

A distinctive characteristic of the 3x1 program in Guanajuato is that the immigrant counterpart is not always a hometown association. Instead, it is a more informal conglomerate of relatives who pool resources to benefit the town.

One significant development in Guanajuato is that towns are identifying basic needs and developing city plans to better target HTA projects that most serve the community. One example is the town of Torrecilla in the municipality of Ciudad Manuel Doblado. The community created a development plan highlighting nine types of projects. In 2002, Torrecilla implemented two projects that helped rebuild the community center. This was the first time the community and its immigrant relatives participated in a matching project.

Michoacan

Chicago's federation of Michoacan clubs is one of the most active federations working with the state and federal governments in Mexico. The state has responded to the diaspora's interest in working in their towns of origin and forging partnerships; it has an outreach office to connect with Mexicans living in the United States, Coordinacion General para la Atencion al Migrante Michoacano, which acts as liaison and provides communication services to club leaders.

Michoacan is nearly on par with Jalisco in raising funds for the 3x1 program and operates in 30 municipalities throughout the state. Michoacan has distinguished itself in the 3x1 program by setting up an economic infrastructure for wealth-generation projects--activities that lead to the creation of employment or attract investment into a community. HTAs, in cooperation with the state, have engaged in a few of these investment projects.

The town of Tendeparaqua in the Huaniqueo municipality is one area where such projects are taking place. In 2002, HTAs and the government established a garment shop under 3x1 by investing in sewing machines to produce pants. The small workshop contains six different types of machines and will be managed by women from the locality. The state provided training to the women to manufacture garments and also arranged a contract with the state textile chamber of commerce. The women in the factory will make pants for school uniforms purchased by the chamber of commerce, and the community will employ a minimum of eight women to run the shop in the first year.

Preliminary lessons

Most of the communities working under 3x1 face fundamental development problems. The towns have high rates of emigration precisely because they have historically lacked employment opportunities, as well as basic health, education, and housing services.

The economies in the municipalities that benefit from the Iniciativa Ciudadana 3x1 program are nearly one-third the size of those in urban centers like Monterrey, Puebla, and Guadalajara. The small communities also lag behind by at least 10 points in the human development index.

Therefore, the human development impact of 3x1 is most acutely felt in the area of basic public infrastructure, such as electricity, schools, health-care centers, and access to larger cities for financial services. In the majority of these communities, 3x1 investment represents at least five times the government budget allocated for public works.

HTAs recognize the need to evolve into mature institutions, but in many instances they lack the means to take the next step. For example, few have established non-profit status in the U.S. More significantly, few HTAs have undergone a learning process or analyzed their range of projects in relation to town needs. Because the influence of certain local community members is significant and tends to shape project decisions, it is important to help inform both towns and HTAs about the range of development opportunities in the town beyond public infrastructure.

ECONOMIC DEVELOPMENT AND HTAs: POLICY OPTIONS

Mexican hometown associations have the capacity to promote development, particularly when working in partnership with other institutions. How can the relationship between HTAs and development be strengthened? Should international donors insert themselves as partners, and if so, how?

Although migrant associations are in general socially or philanthropically focused, rather than development-oriented, it is important to identify those HTAs that have a direct concern with economic change in their communities. One task of governments, foundations, and multilateral and bilateral donors is to find partners to share and coordinate development projects, and HTAs are potential candidates for this type of partnership.

In particular, foundations and development agencies can use their expertise to identify community needs and inform HTAs about the best kind of infrastructure projects to promote. More importantly, donors can distinguish between projects with purely social benefits and those that promote economic development. In that context, they can provide associations with different options for projects that would ultimately foster an attractive investment environment in a community. Development agencies can also form partnerships with governments that already work with HTAs.

Health and education

One strategy for working with hometown associations involves offering technical and financial support for their existing activities. Municipal governments would be key partners in such a strategy. Local officials can benefit from assistance about how to better understand basic town needs, as well as how to plan and manage projects. Most projects under 3x1 are negotiated and managed in coordination with municipalities, therefore the municipality can greatly benefit from a more informed project-identification process, and in turn disseminate its newly acquired knowledge to the community and HTAs.

Under certain circumstances, interested HTAs can partner with donors and foundations who can provide in-kind grants or cash to local communities for health and education projects. Half of Mexican HTAs work in the areas of health and education but often lack sufficient funds to complete projects. For example, HTAs have been known to provide support to acquire school supplies without a fully operational school present, or to build a health center without supplies or staff. In such cases, donors can coordinate with HTAs to better inform them about development strategies.

Foreign-aid donors are already promoting development that coincides with HTA work. An electric energy project carried out by donors in Mexico, for example, could work alongside similar projects carried out under the 3x1 program. Such alliances can enable donors to expand their support and provide technical assistance where needed, especially in high-migration areas.

Financial infrastructure

Financing is critical to local development, but a lack of infrastructure makes it difficult for communities to capitalize on potential financial opportunities. Very few towns with populations under 10,000 have access to financial institutions. For that reason, developing financial infrastructure can benefit a community as much as paving a road.

The areas studied in this project are major recipients of family remittances, in addition to being the beneficiaries of HTA donations. (Remittances are distinguished from HTA donations because they are transfers between individuals rather than resources pooled by a group and shared by a community.) In towns with populations under 1,000, which represent 50 percent of 3x1 operations, average remittances may reach at minimum $100,000, or $100 per capita. In the 294 mainly rural communities studied, remittances reached a total volume of at least $800 million. (6)

Furthermore, in the communities where 3x1 operates, major commercial banking institutions such as Banamex are present only in those with populations above 10,000. In other words, banks are present in less than 15 percent of 3x1 communities. With donor support, HTAs could engage in financial literacy programs aimed at increasing capital, savings and investment. Such education would provide one source of the infrastructure needed to create savings and credit institutions in rural communities.

Challenges

There are several factors to consider when exploring partnership opportunities. First, politics matters. Second, overly ambitious programs may fail, and it is better to focus on smaller pilot projects and build models over time. Third, working with partners may prove difficult.

Most HTAs are small and philanthropic in nature, but their relationships with political leaders in the receiving communities may pose challenges for development agencies. In Mexico, some state governors and mayors seek to take advantage of the social capital of HTAs to build up economic resources, and more importantly, to maintain political clienteles in rural areas. On the U.S. side, some community leaders may promote their relationships with HTAs for political gain. Donors must recognize the intricacies of HTA politics while maintaining an open line to work with them. To prevent the politicization of development assistance, donor agencies must have clear and transparent agendas for specific projects and partner with institutions that have solid reputations in development work and familiarity both with immigrant associations and with the rural remittance-receiving areas.

Since HTAs have been working on infrastructure projects for less than 10 years, an ambitious, multimillion-dollar program may not prove successful, as it may overwhelm the local capacity to manage projects. This is particularly important in the first year of partnership. Also, HTAs usually raise no more than $20,000 annually, and average $10,000 a year. A donor cannot expect an HTA to devote all its resources to one specific project, because this could have a direct and possibly detrimental effect on the HTA's broader focus. A more sensible approach would be to connect donors with five or 10 major HTAs willing to cooperate on larger development projects.

Even the most organized HTAs are still voluntary organizations, so members' time is limited. This presents a challenge to donor officials in relating to their HTA partners. A possible solution is to work with foundations or non-profit organizations that could manage HTA development projects. However, it is very critical for donors to also have a direct relationship with HTA leaders in order to lend credibility to the partnership and avoid delegation of duties to third parties.

CONCLUSIONS

It is clear that HTAs are playing an important role in development by improving social conditions in their communities of origin. In order to further deepen their development work and forge productive partnerships, they need to improve in the areas of basic-needs identification and project management. Because HTAs have shown an ability to manage small projects, it is important to further explore the opportunities for working jointly with donors. Central to achieving success is an HTA's ability to approach these players.

One step forward is for donors and foundations to be open and flexible about working with HTAs. Federations--larger organizations made up of many HTAs--could prove potentially more influential than the individual associations if they directly approach donors to address project strategies. Another way to link HTAs with development agencies is through donor support of local governance programs, including partnerships with emigrant communities. Such a strategy could include projects dealing with basic-needs assessment, town planning, and financial education.

Mexican hometown associations are an important component of transnational linkages. Migrants who have established lives in the United States remain tightly connected to their communities of origin through participation in HTAs. Mexican immigrants donating to hometown associations are only a fraction of the remittance-sending population; nonetheless, their contributions have a significant impact on life in rural Mexico. Investments by HTAs vastly outdo public works spending in small communities, and in many cases, basic infrastructural work carried out by HTAs forms the essential base for further economic development in these towns.

Not all HTAs have the capacity or the desire to work directly on economic development, i.e., job creation and investment. For that reason, one way of multiplying the impact of HTA work is for donors to identify and engage those HTAs with the best capacity to work on such projects. Through better project identification and management, appropriate partnerships, and improved town governance, hometown associations have the potential to become important players in local development in Mexico.
HTAs and Municipal Budgets (in U.S. dollars)

Population in Average budget Average HTA HTA contribution to
 locality share contribution total public works
 budget

Under 3,000 65,222 17,816 27%
3,000-4,999 128,164 5,426 4%
5,000-9,999 291,885 13,583 5%
10,000-14,999 622,018 48,331 8%
15,000-19,999 368,993 10,875 3%
Over 20,000 2,432,600 33,033 1%
Average 933,612 23,636 3%

Budget share is the locality's estimated public works allocation
in the municipal budget. Source: HTA interviews and Sistema National
de Informacion Municipal Version 6.2, Secretaria de Gobernacion:
Instituto Nacional para el Federalismo y el Desarrollo Municipal,
Mexico.

Distribution of 3x1 Funds by State in 2002 (in thousands of U.S.
dollars)

Population size in locality Amount Percent

Guanajuato 2,054 4.7%
Jalisco 5,199 11.9%
Michoacan 4,151 9.5%
Oaxaca 1,504 3.5%
Puebla 557 1.3%
San Luis Potosi 1,717 3.9%
Zacatecas 16,316 37.5%
Other states 12,056 27.7%
TOTAL 43,553 100.0%

Source: SEDESOL, 2003. Amounts were converted to 2002 U.S. dollars.

Average Total Remittances Received (see note 6)

Population of town Assuming Assuming
 disbursement disbursement
 of US $250 of US $300

Under 999 $106,862 $128,234
1,000-2,999 $442,704 $531,244
3,000-4,999 $1,053,786 $1,264,544
5,000-9,999 $1,923,668 $2,308,402
10,000-14,999 $3,256,231 $3,907,477
Over 15,000 $15,027,550 $18,033,060

Types of HTA Projects

Cemetery 6%

Economic
investment 10%

Town
beautification 13%

Recreation 19%

Church 22%

Public
infrastructure 32%

Other
donations 48%

Health and
education 60%

Note: Table made from bar graph.

Annual HTA Donations (in U.S. dollars)

<$5,000 40%

$5,000-10,000 29%

$10,000-20,000 17%

$20,000-40,000 8%

>$40,000 6%

Note: Table made from bar graph.

Zacatecas: Amounts of 2x1 (1992-1998) and 3x1 (1992-2002) Matching
Grants

1993 0.19
1994 0.13
1995 0.39
1996 0.7
1997 1.68
1998 0.77
1999 4.8
2000 6
2001 7.2
2002 16

Source: Miguel Moctezuma, "Territorialidad Socio-Cultural y Politica
de los Clubes de Zacatecanos en Estados Unidos," Programa de Doctorado
en Estudios del Desarrollo, Universidad Autonoma de Zaeatecas, June
2003.

Note: Table made from bar graph.


(1) Sarah J. Mahler, "Constructing International Relations: The Role of Transnational Migrants and Other Non-state Actors," Identities 7, no. 2 (1998): 197-232; Bryan Roberts, Reanne Frank, and Fernando Lozano-Ascensio, "Transnational Migrant Communities and Mexican Migration to the U.S.," Ethnic and Racial Studies 22, no. 2 (March 1999): 238-266.

(2) Manuel Orozco, "Latino Hometown Associations as Agents of Development in Latin America," Washington: Inter-American Dialogue, June 2000.

(3) Patty Levitt, "Transnationalizing Community Development: The Case of Migration Between Boston and the Dominican Republic," Nonprofit and Voluntary Sector Quarterly 26, no. 4 (1997): 509-26.

(4) Orozco, "Globalization and Migration: The Impact of Family Remittances to Latin America," Latin American Politics and Society 44, no. 2 (summer 2002): 41-66.

(5) Miguel Longoria Moctezuma, "La Organizacion de los Migrantes Zacatecanos en los Estados Unidos," Cuadernos Agrarios (2000).

(6) Remittances estimates were calculated using state and municipal data from the Census 2000. The calculation multiplied the percentage of households that receive remittances by the frequency and the average amount sent (using two different amounts, $250 and $300, although the average is usually higher for Mexicans).

CLUB DE PARACHO CALIFORNIA

Club de Paracho California is a Michoacan HTA founded in Long Beach in 1992. As many as 300 families participate in its activities, but the eight-member directive committee does most of the coordination of fundraising in California and implemention of projects in Michoacan. Annually, the club raises about $8,000 and sometimes as much as $10,000. It usually takes two to three months to plan a project and then another six months to accomplish something concrete.

The club focuses primarily on environmental work. An ongoing project involves reforestation of the wooded area surrounding the hometown. The club organized a group of volunteers to plant new trees and maintain the land, working with the "Recursos Forestales" department of the state government, which granted the land to the club and provided trees for planting. In addition to the reforestation project, the club also coordinates regular town-wide cleanups of the areas polluted by hazardous solvents from local industry.

Beyond the use of land and materials, the club does not work with the government on any project. It has, in fact. run into some difficulty with the local government authorities, who conditioned the use of a truck on endorsement of a particular political party. As a result, the club temporarily suspended its activities and has decided to collaborate mainly with the state, rather than the local government. Club de Paracho has begun working with the local fire department. It has not yet been involved with the 3x1 program, but will evaluate its cooperation with the fire department and then consider proposing a 3x1 project.

CLUB EL PLATEADO

Club El Plateado was founded in Chicago in 1999 and has around 1,000 members. It is part of the Federacion de Clubes Unidos Zacatecanos en Illinois. Its board of directors is composed of 20 people who meet monthly to make project decisions. Members travel frequently to Zacatecas and return with ideas, which are then discussed and voted on by the board.

The club's main project since its inception--in fact, the reason for its founding--is the paving of a 58-kilometer road that connects six towns. While the road project itself is 11 years old, it began to progress rapidly when Club El Plateado became involved four years ago. A small section of the road was constructed with the help of the 3x1 program, but the largest single investment, $150,000, came from the club in 2001. In addition to the road project, the club is helping to build a sawmill in hopes of creating 100 new jobs in the area. It is studying the sustainability of the forest so as not to abuse the resources. Furthermore, the club donated ambulances and a mobile clinic to the community and provided the local school with computers and Internet access.

Club El Plateado works closely with state and local government authorities to implement these projects. Mexican officials have visited Chicago several times in recent years to meet with the club and federation leaders. Club El Plateado hopes to invest further in health and education projects in the future.

CLUB TEMASTIAN DE HERNANDEZ

Shortly after the founding of Club Temastian de Hernandez in California about 10 years ago, its core of 12 active members sold food and organized raffles to raise $10,000 to contribute to the funeral costs of their compatriots in theft hometown in the state of Jalisco.

Since then, the association has completed the construction of a health center under the auspices of the 3x1 program. This project took almost three years to implement, and although there were several small bureaucratic problems while working with the various levels of government in Mexico, the governor of Jalisco helped them overcome these obstacles and finish the project.

After the health center was completed, the club donated $3,000 worth of medical supplies and equipment to stock the center. Their experience working with the 3x1 initiative on this project led in the creation of a sister committee in their hometown, which will help oversee on-site work and will also help the club choose future projects.

GLOBAL REMITTANCES

Conservative estimates indicate that around 200 million people migrate each year, in large part because in many countries, the demand for foreign labor, both skilled and unskilled, is increasing. Migration flows are not simply unidirectional, from the South to the North. Greeks migrate to Germany and the United States, while Albanians migrate to Greece. South Africans move to Australia and England, while Malawians, Mozambiqueans, and Zimbabweans work in South African mines and the service industry. These millions of migrant workers send millions more in remittances home to their families and communities of origin.

Worldwide, annual remittances amount to more than $100 billion, primarily sent from the industrial to the developing world. According to World Bank numbers, total remittance receipts in 2001 made up 1.3 percent of developing countries' GDPs--2.5 percent in South Asia and 1.3 percent in sub-Saharan Africa. For most of the 1990s, remittances receipts in developing countries exceeded official development assistance, and they are the second-largest source of external funding after foreign direct investment. (1) Comparisons of total remittances, foreign direct investment, and official development assistance for Latin America appear in the chart below.

Latin America receives more remittances than any other area in the world, about 31 percent of the flows, as the figure on the next page shows. In 2003, remittances amounted to some $38 billion, or about 2 percent, of the region's GNP and more than triple the $10 billion they comprised just a half dozen years ago. This amount is more than double that of all foreign aid going to the region, including grants from bilateral donors and loans from the World Bank and Inter-American Development Bank. Remittances are also more stable than most other capital flows to the region.

Remittances are particularly significant for the small and poor countries of Central America and the Caribbean, where they represent a sizable fraction of all economic activity. In 2002, for example, remittances accounted for nearly 30 percent of Nicaragua's GDP and 25 percent of Haiti's. The money reaches low-income families, especially those in rural areas, and significantly increases their purchasing power and standard of living; in Honduras, Nicaragua, El Salvador, and a few other of Latin America's poorest nations, remittances may be more than doubling the incomes of the poorest 20 percent of the population.

The 16 countries in in the table to the left receive three-quarters of total remittances. In most cases, with the exception of Latin America. remittances are not sent from a single country, but rather from a combination of areas. For example, immigrants from India, Pakistan, Egypt, and Turkey who work in the Arab oil-producing region send money from at least eight different countries.

Migrants use a wide array of mechanisms to send money home: banks, credit unions, small and large money transmitter companies, postal services, hand delivery by the actual sender or by a third party (encomendero, mula, or viajero), and lesser regulated mechanisms like hawala (in Pakistan and Bangladesh) or hundi (in India). The United States is the major recipient of international migrants and the country that sends out the most remittances, but the costs of sending remittances from the United States are higher than from many other countries in the world.

Remittance flows continue to increase worldwide. As globalization deepens, so does the movement of people. Trade, transportation, telecommunication, transfer of remittances, tourism, and nostalgic trade intensify the links between migrants and their home countries. Remittances have become a part of the human face of globalization.
Remittances and Other Financial Flows to Latin America

Country/region 1996 ($ billions) 2001 ($ billions)

 Remittances FDI ODA Remittances FDI ODA

Mexico 4.2 9.2 0.3 8.9 24.7 <0.1
Central America 1.8 1.1 1.8 3.6 2.0 2.1
Caribbean 2.4 0.7 0.7 4.5 2.7 0.5
South America 1.7 9.3 0.3 4.0 8.2 1.0

Source: Remittances are as reported by the central bank of each
country/region. Foreign direct investment (FDI) and official
development assistance (ODA) data are from World Development
Indicators (Washington. D.C. World Bank, 2003). ODA excludes
loans from the World Bank or International Monetary Fund.

Worldwide Flows of Worker Remittances (2002)

East Asia & Pacific 14%
South Asia 20%
Europe & Central Asia 13%
Southern Africa 5%
Middle East & N. Africa 18%
Latin America & Caribbean 31%

Note: Table made from bar graph.

Remittances to Major Remittance-
Recipient Countries (2002)

 Share

Country in region Region Worldwide

India (a) 73% 15%
Mexico (a) 34% 8%
Philippines (a) 43% 8%
China (b) 43% 8%
Turkey (a) 27% 6%
Egypt (a) 35% 5%
Spain (a) 20% 4%
Portugal (a) 19% 4%
Morocco (a) 20% 3%
Bangladesh (b) 12% 2%
Jordan (b) 17% 2%
El Salvador (a) 9% 2%
Dominican Rep. (a) 9% 2%
Greece (4) 10% 2%
Nigeria (b) 65% 2%
Yemen (b) 12% 2%
Main countries 75.00%

Source: (a) Central banks of each country.
(b) World bank, World Development Indicators 2002


Excerpted and adapted from Orozco, "Worker Remittances in an International Scope" (Washington, D.C.: Inter-American Dialogue, March 2003), available at www.thedialogue.org/publications/country_studies/ remittances/worldwde%20remit.pdf, and "All in the Family: Latin America's Most Important International Financial Flow" (Washington, D.C.: Inter-American Dialogue, January 2004), available at www.thedialogue.org/publications/country_studies/remittances/ all_family.pdf

(1) "Global Economic Prospects: Realizing the Development Promise of the Doha Agenda" (Washington, D.C.: International Bank for Reconstruction and Development/The World Bank. 2003). 148.

This article is a synthesis of a broader study on the subject. The full report, commissioned by the U.S. Agency for International Development, is titled "Hometown Associations and Their Present and Future Partnerships: New Development Opportunities?" and may be downloaded at www.thedialogue.org/publications/default.asp
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Author:Orozco, Manuel; Lapointe, Michelle
Publication:Journal of International Affairs
Geographic Code:1MEX
Date:Mar 22, 2004
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