"Remesas" from Dominicans abroad: a blessing or a curse ?

It's Better than Nothing!

You are right about "Remesas" being a disincentive for people to get out and work. I have been living in Bani for 8 months and have been extremely surprised to find that many, many people sit around waiting for those dollars to come in every month from the son, daughter, brother, sister, etc. who is working in the U.S. Both my downstairs neighbors in the apartment building where I used to live and the neighbors in both sides of the building and many in the entire neighborhood do this. I never saw this in Santiago or La Vega where I have resided before.

However, 2 billion dollars annually is nothing to sneeze at and exchanging at 45 pesos por dollar it is 90 billion pesos! It motorizes the economy and helps the recipients a lot, even if they are not improving themselves. It's Better Than Nothing!

Banilejos are experts at getting to the US, they come up with all sorts of schemes. It's amazing the stories I've heard. Anyways, since a large percentage of banilejos get to the US and establish some sort of enterprise related to bodegas and the such, their relatives in the DR want to see the money coming in and not do anything to earn it..........

Formosano2000 said:

The effect on the DR macro-economy is indeed significant.

But what I'm more curious about is the potential the remesas has to change the life/lifestyle of the individual recipient.

For example, for the regular unaided Dominicans, they always struggle to subsist on the meager RD$4000 a month.

But if this same Dominican, who also gets an additional US$200 a month from US, can still hold down the job and do something meaningful with the monthly "windfall". Then it is possible that this person can gradually buid up a saving, become a home owner, or even a small business owner..., thus creating even more job opportunities. This is the key concept behind the so-called "micro-loans" that are done by private entities to Third World poor.
The only difference is that you don't have to pay back the remesas.

But I'm afraid the typical metality is "Pa qu? tengo que fajar si me mandan t? eso cuarto de all? !" Easy come, easy spent. Why work so hard when a cold Presidente and a hot chick is always around the corner ??

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You answered your own question.

As long as we have parties like the PRD as well as other "entities" telling people they have more rights than obligations to society, they will feel that somehow being poor is something that has been negatively cast upon them.

For this reason they feel they have no way out of it except for the occasional lightning-strike (musician, baseball-player, lotto winner), thus making saving money and actually trying to pull THEMSELVES out of poverty not an option.

Peor es nada

The remesas help the country in everyway you see instead of hurting it. In whichever way you look at it, if someone gets money they spend it at the colmados or tiendas and whichever way the country ends up progressing.

I don't think that if you had family there and you are earning enough to send algunos pesos, that you wouldn't do. Who ever needs the few pesos to survive, really needs it, it's not like welfare b/c it is not the same country where there might be jobs and people choose not to work. In DR there are very few jobs available, if not why do you think we Dominicans came to US? To work our traseros off!

I completely agree that remittances serve as a disincentive to not work. The part that angers me is that people who send the money are really stuggling to make ends meet or are even pressured to do illegal things to keep up with DR demand. Yet Dominicans in DR can CHOOSE to not work certain jobs because it is "below" them yet Dominicans in the US have to do the same or more to maintain. This is deplorable and abusive.

However, the trend will change. DR as a country must prepare when remittances start decreasing, because they will. As Dominicans become more Americanized they will start to see how they have shortchanged themselves and their children's potential education because its people as well as the government have not done their part.

Formosano2000 said:

Roughly speaking, the three primary hard-currency generators for DR are 1). Tourism 2).Remittances from Dominicans abroad 3). Free Zones exports.

While 1). and 3). directly employee DR workers, 2) benefits the families and relatives of money senders via direct cash infusion.

I have often wondered if the these "free money" are acting like an unofficial welfare system that somehow promotes dependency and reduces incentives to work. After all, US$100 a month (to throw a random number) is now far above the minimum DR wage that it's easy to see recipients forgo low-paying work.

Obviously this country needs all the money it can get. But would you say the direct remittance helps to pull people out of poverty (by given them the capital to start small business, by help funding education for kids...etc) or would you say it simply helps maintain the status quo because recipients see no need to work ?

While the net benefit for the DR economy as a whole is a plus (more money = more consumption), I have a mixed opinion about its effectiveness in improving the lives of the intended recipients.

If you drive through the streets of, say, San Pedro de Macoris during weekday work hours, you'll see plenty of able-bodies young men sitting out doing nothing. I do not know how many of them are remesa beneficiaries but it does make me ponder if the high unemployment rate in DR has something to do with "easy money" as well as with a scarcity of jobs/bad economy.

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My experience. I send money to almost all my family as needed. In addition I send money on a monthly basis to my grandfather. This is pretty much his whole income. If it wasn't for this money he would be going through very rough times. I also send money on a monthly basis to another person who has a job, but only makes about 2000 pesos a month for 6 days a week of work. This person has continued to work in her minimum wage job, in spite of me sending more than she makes in her job. She uses it to supplement her income. So you see, everyone is different.
I do agree that as soon as a family has someone living in The US or Europe a certain mentality change occurs. I say this, because it seems that ever since we came to the US the rest of the family in The DR cannot get anything solved by themselves and always end up asking for help from those of us in The US. I think it is just so much easier to call and ask for money to solve a problem that they just kind of get used to that.
Having said that, I don't have a problem at all with helping my family. I know that they would do the same for me if it was the other way around.

Let me tell everyone what I think is wrong with remittances!!

Yes, remittances is a blessing and a curse, but no for the most obvious reasons!

Its a blessing because it increases economic activity in the country. End of story!

Its a curse not because in it self it makes people lazy, because it doesn't. What makes people lazy is in the way the remittances are sent by expatriate Dominicans and they way they are received by island Dominicans. Let me elaborate:

Lets say an expatriate Dominican sends $50 per week to his brother in Sto. Dgo. The expatriate sends that money with no real intention other than helping his brother survive. His brother in the other hand, goes to his town's Western Union and get his cash. He receives that cash not on the basis of helping himself, but on the basis that his "rich" brother is so good to him that his brother send him a little something every month. He might even brag a bit how his "rich" brother is in the US still thinking about his "poor" brother on the island. Ok, now that we got that covered, this is the problem.

If the expatriate Dominican would send that money with a sustainable purpose, in other words to initiate a small business or something, that money would be good. But the expatriate doesn't do that, he just sends the money out of habit!

In return, the island Dominican receives this money with no purpose other than with the notion that his brother is so good and his brother shows his goodnes via dollars. Because of this, the island Dominican spends every dollar on whatever he wishes (regardless if it's a necessesity or not) and simply waits until the next dollar shipment comes through Western Union next week.

If that money sent would have a purpose beyond being nice, the country as a whole would have been much better off. If the Expatriate and the Island Dominicans both understood that the money being sent is to propel the family on the island into prosperity, maybe the island Dominican would have put some money in a Dollar interest baring account in a bank (very lucrative in the DR) and maybe use some of the money to start up a small business of somesort and then, what ever is left is used to cover the necessities and any "luxuries" etc.

In order for that to happen, the expatriate Dominican needs to show the island Dominicans how he really lives, not give them the impression that he is drenched in Gold in the U.S. That way the island Dominican will know that money doesn't just grow on trees in the US and try to make the money last even longer through investing. Other than that, remittances is nothing more than an informal welfare system with no end in sight. In fact, the reason why many Dominicans would like to bring all of their family members from the DR to the U.S. is so that the expatriate Dominican can stop sending money to the island, money that he/she badly need to keep themselves afloat in the U.S.

This is my theory of why remittances is a blessing and a curse.

Formosano 2000;

You have hit the nail on the head!!

Everyone take note and have a word or two with the recipients of their largesse.

Texas Bill