The road to Tonahuixtla in the southern Mexican state of Puebla begins as smooth pavement in the city of Acatlán (pop. 35,000), but as it winds into Tonahuixtla–where less than 1,000 people live–it becomes a bumpy dirt path, just like the others that crisscross through the small dusty town. When a drought in the early 1980s hit Tonahuixtla, many residents took those roads out, heading north to Mexico City, Cuernavaca and ultimately New York. Once settled, they sent money home to relatives, remittances that became a much-needed lifeline. During this difficult period, the only development project that anyone could remember was the construction of a new bridge on the outskirts of town.
But lately residents of Tonahuixtla have been discussing major improvements–not just paving the main roads but also building a cultural center and medical clinic. Thanks to the “3 for 1” Program sponsored by the Mexican government (dubbed 3×1 by officials), U.S. migrants that have organized themselves into hometown associations (or HTA’s) send money for public works projects to their hometowns in Mexico–and each dollar is matched by an additional dollar from the federal, state and local governments (see page 25).
The 3×1 Program represents an acknowledgement by the Mexican government of the power of migrant dollars–and a recognition of the parallel growth of the migrant communities in the U.S. that send the money back home. Remittances have become the second largest source of income for Mexico, behind oil (and, unofficially, drugs). In 2004, according to the Bank of Mexico, a record $16.6 billion was remitted from migrants in the U.S., through 51 million transactions that averaged $327 each. This was a 24 percent rise from the $13.3 billion sent home in 2003, and nearly double the $9.2 billion sent in 2001.
Rafael Cruz attributes the 3×1 Program to “a political situation, nothing more.” Cruz lives in Tonahuixtla and serves as the secretary of San Jeronimo, the municipality in which Tonahuixtla is located. With the help of his brother in New York City, he has promoted Tonahuixtla’s participation in 3×1.
“Mexicans are demanding more and analyzing more, seeing the power that the migrants have with their money,” says Cruz. “So now, political parties are competing for these votes, trying to share some credit with what is happening now. Everything has become very politicized, the same as in the United States between the Republicans and Democrats, right? The Mexican politicians are supporting the 3×1 Program in order to maintain power, so that they can say, ‘Look, we’re here to help you.’”
Cruz’s jurisdiction is in the Mixteca region, a hot, low-lying land of mostly indigenous residents that includes parts of Puebla, Oaxaca and Guerrero. It is also where roughly two-thirds of Mexicans in New York metropolitan area originate.
“We have always been ignored by the government, because we are indigenous and because we are isolated,” says Cruz. “All of the public works projects we’ve had in the town–water, electricity and telephones–we’ve only received in the last 30 years. And the people here were the ones that did the work, with almost no help from the government. Before, that was common, but now the government is starting to pay attention to us.”
Regardless of motive, one thing is irrefutable: The presence of Mexican migrants in the U.S. is rapidly changing the hometowns they left behind. As Mexicans in New York City continue to be the fastest-growing immigrant group, migrants are fueling a development boom in Mexico, and discovering through their remittances a new sense of power–even in a strange land.
Setting the Plan in Motion
Migrants have always sent money home, through HTA’s and individually, for a variety of projects, personal and public. Cruz’s younger brother, Florentino, has lived in Queens for 15 years, and has long been involved with the Tonahuixtla HTA. In the past the HTA had helped renovate the town church, among other projects, but lately
the money it sent home went toward Tonahuixtla’s largest fiesta. After hearing his brother explain 3×1, Florentino called a meeting with the 50 other HTA members who lived in New York City,
New Jersey and Long Island, all of whom agreed that it was time to jump-start their moribund committee.
Florentino then met with a representative of Casa Puebla, an organization that assists the Mexican community in the New York metropolitan area, who told him that someone from the 3×1 Program would be coming to New York City to give a presentation. Florentino took the day off at the Queens restaurant where he has worked for more than a decade, and at the presentation he filled his notebook with comments and ideas. At the next meeting of the HTA he reported what he had learned and his excitement was contagious. At the same time, Rafael was meeting with the people in San Jeronimo’s office, convincing them to participate. Rafael and Florentino soon found themselves working as a transnational team, faxing papers back and forth and updating each other about new developments. Several weeks earlier, Tonahuixtla’s residents had voted to construct a cultural center as part of their first 3×1 project, complete with a library, computer room, educational games for children, music lessons and a museum showcasing the history of the town and its surrounding areas.
“We also hope someday to be able to teach our children Mixtec,” adds Rafael, referring to the indigenous dialect that many of the town’s elders, including Rafael, speak. He is optimistic that with Florentino coordinating the HTA in New York City, and the meetings between San Jeronimo and government representatives in Acatlán, work on the project will begin in two to three months.
On Rafael’s desk is a thick file of applications and various correspondence between the HTA, San Jeronimo and the State of Puebla, all meticulously organized. Although the papers are in order, Rafael is still readying for a fight. San Jeronimo, larger and with a paid government staff (all staff at Tonahuixtla work as volunteers, since they are an “auxiliary” office), doesn’t have a cultural center yet, and some of its residents have begun questioning why Tonahuixtla should get one first. “Even the municipality here has ignored us for many years, and not assisted us when we needed it,” says Rafael, glancing around the office to make sure no one is within earshot. “But now, since I’m officially part of their staff, we’ve convinced them to work with us.”
Mexico’s $16.6 Billion Industry
Up close, the 3×1 phenomenon can appear deceptively modest. At a recent meeting of the Tonahuixtla HTA, held in a rent-stabilized building on Roosevelt Avenue in Queens, eight members gathered to discuss the details of the cultural center. Among the attendees were Alfonso Olivires, 45, from Long Island, who works at a deli; Bravio Ramirez, 24, a construction worker in Queens; and Celiflora Cruz, 30, sister of Rafael and Florentino, who sells Avon beauty products in Queens. In addition to getting updates about the cultural center, the group was collecting money to send home for an August celebration in Tonahuixtla. Florentino had recently stopped by homes in New Jersey and New York City to solicit funds, and now had an envelope bulging with bills. On the outside of the envelope were smudged names scrawled next to the amount each had donated. Once the meeting was concluded, he walked to Delgado Travel, a money-transfer company with offices on Roosevelt Avenue, and wired the money home for a 4 percent fee–roughly the going rate in New York City. That fee has been cut in half since the late 1990s, thanks to greater competition among the transfer companies.
A state-by-state study of remittances sent to all Latin American countries, conducted by the Inter-American Development Bank, concluded that last year immigrants in New York sent $3.5 billion to their home countries. The same study discovered that the Empire state is one of only six in the country where at least 80 percent of its Latin American immigrants send remittances. The New York State Banking Department estimates that nearly $2 billion was remitted in 2004 from Mexican immigrants living in New York.
But besides the sheer amount of money involved, remittances are also catching the attention of policymakers because of where the money actually ends up. According to a 2004 report by the Inter-American Dialogue, “there is no flow of capital that more surely and directly benefits Latin American’s poor than remittances.”
According to the report, communities in Mexico with populations under 30,000 receive approximately 40 percent of all remittances mailed home. Unlike international aid, which might get sucked up by city bureaucracies and the politically connected, much of the money sent by Mexicans in the U.S. goes straight into the pocketbooks of poor relatives living in rural communities–excluding, of course, the fees charged by wire-transfer companies and banks conducting the exchange.
Remittances are also unique in that they come without conditions. No “structural adjustment” obligations must be fulfilled–requirements that tend to spark public outcry if not outright rebellion (such as the Bechtel water privatization scheme pushed by the World Bank in Cochabamba, Bolivia, where skyrocketing water prices in 2000 led to numerous clashes between the military and the primarily indigenous opposition). In addition, there are no high-interest loans to be paid off, which is equally important to developing countries plagued by debt. Such advantages have led the governments of countries like Mexico, El Salvador and the Philippines to view their citizens in the U.S. as critically important economic engines.
And those who send remittances are becoming a political force. Mexican politicians and candidates now regularly come north to visit migrants in the U.S. and vie for endorsements and support. In states like California and Illinois, with longer histories of Mexican migration than New York, highly organized groups of migrants have become power brokers–a necessary campaign stop for any potential politician. In New York City, Mexican immigrants are a more recent phenomenon and have yet to realize the political power of their paisanos in Chicago or Los Angeles; the first Tonahuixtlan to come north made the journey in the mid-1980s, just 20 years ago. Still, politicians in Puebla now make frequent campaign trips to New York City, and when Mario Marín Torres, the governor of Puebla, was here this past May, Florentino was one of many poblanos there to greet him, making sure he knew about the plans residents had for tiny Tonahuixtla.
Banks Still Lag in Remittance Services
Banks are slowly awakening to the growing economic importance of immigrant communities. Wells Fargo, Citibank and Bank of America are steadily lowering the costs of sending money for account holders, and spending more money to publicize their services. In early 2005, Bank of America made the boldest move yet, announcing that by the end of the year they will eliminate all fees for sending money to Mexico.
Yet, for all their targeted marketing and recent slashing of fees, banks have been largely unsuccessful in their attempts to move into the remittance field. According to Manuel Orozco, the best-known analyst of remittances and a senior researcher at Georgetown University, only 3 percent of the money transferred to Mexico is performed by banks. Despite the campaigns of certain banks to break into the remittance market, he says that most banks are still behind the curve.
“Many are yet to even realize that people are sending money,” he says. “I speak to banks on a regular basis, and they are always surprised that this is going on. Then they say, ‘Oh yeah, I asked my maid and she sends money back all the time.’”
Orozco predicts that the next five years will see more banks partnering with wire-transfer companies that already have successful track records working with largely undocumented immigrant clients. He also dismisses the notion that banks will take over the remittance industry anytime soon: “This is a different kind of industry, and the banks are still not very familiar with this type of customer.”
Whatever apprehensions have kept immigrants away from banks–from a lack of Spanish-speaking tellers to the fear that banks will demand proof of legal residency–all an immigrant needs to open a bank account is a matricula consular, an I.D. card that can be obtained at the Mexican Consulate. Yet in the tri-state area, with an estimated 1 million Mexicans, the consulate issued only 20,000 matriculas in 2004. The reduced fees that wire-transfer companies offer may have made the idea of a traditional bank account less compelling for some migrants. Another possible explanation is the consulate’s reputation for long waits. Many immigrants have complained of having to line up in front of the consulate the night before to guarantee an appointment for the following day.
At a recent meeting of the Tonahuixtla HTA in Queens, members discussed plans to reach out to migrants in Oregon and California in order to raise more money once the paperwork for the cultural center goes through. Toward the end of the meeting, Celiflora asks the reporter in attendance if the article will appear in Spanish. When told that it is an English-only magazine, she and the other members of the group are deeply disappointed, and someone suggests translating the article, so that other Mexicans in New York City can read it.
“Yes, that is very, very important,” agrees Florentino, nodding vigorously. “Most of the Mexicans here are from small towns, like us. They probably don’t think they can do much to improve their hometowns, since they’ve also been ignored. But just think, if they read about what we’re doing, and they know how small Tonahuixtla is ….” He looks around the room at the group, momentarily lost in thought. “Maybe they’ll think, Look, Tonahuixtla is small but they’re doing stuff–we should do stuff, too.”
Gabriel Thompson, a former community organizer with the Pratt Area Community Council, is writing a book about the experience of Mexican immigrants, There’s No José Here.
The 3×1 Program: Spreading the Wealth
Programs with similar missions are frequently labyrinthine, but 3×1 is remarkably simple: Groups of migrants in the U. S. organize hometown associations (HTA’s) and decide upon a public works project to fund in their home states in Mexico. Each dollar raised by the HTA is matched by a dollar each from the federal, state and municipal levels of Mexican government–hence the name, “three-for-one.”
The 3×1 Program was created by Mexico’s Department for Social Development, (known by its Spanish acronym SEDESOL) in 2002. Irma Hidalgo, director of marketing for 3×1, says the program’s mission is to encourage infrastructure development and get the most out of money sent home by migrants. Large maps of the U.S. and Mexico–each marked with HTA’s and the Mexican towns that have benefited–decorate the walls of her Mexico City office.
“We know that people go north because there are not enough opportunities for them here, and so this program improves the quality of life in their hometowns and also creates local sources of employment so that people will be able to stay,” she says. For example, she recently received a phone call from the president of an HTA in Kansas, who wants to start a rabbit breeding company to employ residents back in the Mexican state of Hidalgo.
During the 3×1 Program’s first year, 942 public works projects were completed and included everything from installing electricity and paving streets to constructing plazas and health clinics. By 2004, the number of projects had increased to 1,436, bringing services like drinking-water plants and electricity to over 400 municipalities. SEDESOL estimates that it will complete 1,500 projects in 2005, an investment of nearly $60 million throughout the 26 states (out of 31) that have agreed to participate.
Despite its impressive beginning, there is plenty of room for growth. Since 2002, the number of migrant groups participating in 3×1 has grown from 20 to 527 in 2004, but that is still a small portion of the total remittance market. In 2004, for example, Mexican migrants sent roughly $16.6 million for public works projects through 3×1, or 0.1 percent of the $16.6 billion total. Migrants are more likely concerned, at least initially, with sending money home to feed and shelter their families, not with building a school or paving a road. Still, Hidalgo is optimistic that as word spreads about the program and its accomplishments, more migrant groups in the U.S. will get involved.
Currently, a handful of Mexican states are reaping the largest share of the program’s development dollars. Zacatecas, for example, has one of the largest and oldest migrant populations abroad, and had 310 public works projects costing nearly $13 million in 2004. Puebla, however, whose migrants are less established, and whose governor only signed on with the program in 2004, saw just four projects over the year–two potable water developments, one electricity installation and one sewer system. These programs totaled roughly $400,000, or 3 percent of the expenditure in Zacatecas. But as the poblano community in New York City continues to grow and prosper–and as they become more familiar with 3×1–the numbers are likely to rise.