Banking - Mexico - Obama's immigration reform seen boosting remittances

By Jorge Porter?/?Business News Americas

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Remittance flows to Mexico should benefit from US President Barack Obama's planned immigration reform, Alejandro Cervantes, chief local economist at Mexican financial group Banorte told BNamericas.

Cervantes believes that the reform could be approved as soon as 2H13 and its effects on remittances will become visible starting in 2014, when they should grow by 6%.

If Obama's proposal is passed, it would lead to higher migration flows and migrants will probably have access to social security, he said.

That way, migration costs would be reduced substantially and Mexicans will likely make more transfers for higher amounts, according to the economist.

Following already soft figures in July and August, workers' remittance flows to Mexico posted an unexpected 20.2% year-over-year decline in September for the largest contraction since November 2009.

As a result, remittances shrank by 0.3% in the first nine months of 2012 compared to the same year-ago period to US$17.3bn.

Cervantes attributed the recent declines to the appreciation of the peso. And despite weak recent performance, the economist believes that remittances may post a visible recovery in October, as figures released in September showed a significant increase in job creation for Mexicans in the US and a drop in unemployment levels.

BILL COMING SOON

"My expectation is that we get a bill introduced and we begin the process in Congress very soon after my inauguration," President Obama said at a press conference held at the White House on Wednesday (Nov 14).

"This has not historically been a partisan issue. We've had President Bush and John McCain and others who have supported comprehensive immigration reform in the past. So we need to seize the moment," the recently reelected Democrat said.

Obama is aiming for what he calls a "comprehensive immigration reform," which should include a continuation of the strong border security measures that the US has taken and serious penalties for companies that are purposely hiring undocumented workers and taking advantage of them.

"And I do think that there should be a pathway for legal status for those who are living in this country, are not engaged in criminal activity, are here simply to work," he said.

The Latino vote was key to Obama's victory.

"I think what was incredibly encouraging was to see a significant increase in Latino turnout. It is the fastest-growing group in the country. And historically what you've seen is the Latino vote at lower rates than the broader population, and that's beginning to change."

"You're starting to see a sense of empowerment and civic participation that I think is going to be powerful and good for the country. And it is why I'm very confident that we can get immigration reform done," Obama said.

Before the election, Obama gave a couple interviews where he predicted that the Latino vote was going to be strong, and that it would cause some reflection on the part of Republicans about their position on immigration reform.

"I think we're starting to see that already," the president said.

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Source: http://feedproxy.google.com/~r/BusinessNewsAmericas-TopStoriesEN/~3/VbkkaIaID0w/obamas-immigration-reform-seen-boosting-remittances

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