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SPAIN: Heading the List of Remittance Senders

José Antonio Gurriarán

MADRID, Mar 19 2008 (IPS) - Migrants living in Spain sent nearly 13 billion dollars in remittances back to their home countries in 2007, 19.5 percent more than in 2006, says a new report by the Banco de España, Spain’s Central Bank. That makes this country the third largest remittance sender in the world in absolute terms, after the United States and Saudi Arabia, and the top sender in relative terms.

According to the web site Remesas.org, which specialises in research on remittances (remesas, in Spanish), the migrant communities in Spain that send the largest sums of money to their families back home are: Colombians (23 percent of the total); Ecuadorians (20.2 percent); Bolivians (11 percent); Moroccans (6.9 percent); and Romanians (6.34 percent).

These figures are roughly in line with the relative size of those communities, as reflected by the latest census by the National Statistics Institute (INE), which shows that 36 percent of all foreign nationals in Spain come from Latin America, 21 percent from western Europe, 17.7 percent from eastern Europe, and just under 15 percent from North Africa.

The largest groups of migrants are from Morocco, Ecuador, Romania, Colombia, Argentina, Bolivia, Bulgaria, Peru, Portugal and Brazil.

The remittance market moves such large sums of money that national and international banks are attempting to tap into it by forming partnerships or competing with the money transfer services that have traditionally monopolised the market.

Until recently, just two major companies, Western Union and MoneyGram International, handled three-quarters of all money transfers sent from Spain.

Two major Spanish banks that have moved into the market are the Banco Santander, which purchased Latinoenvíos, a remittance company, and BBVA, which set up its own network of offices under the name Dinero Express.

Banks are not only keen on capturing the substantial transfer fees, but are also interested in drawing immigrants into using their other services, like savings accounts.

The fees charged by remittance companies had climbed so high that immigrants associations, supported by consumer organisations and trade unions, complained to authorities in Spain, in the rest of the European Union, and in their home countries.

After the Spanish government passed a new law to prevent abusively high fees, they gradually came down. Immigrants associations, however, continue to consider them too high. They also protest the steep fees charged in some recipient countries.

The question of money transfers is a hot issue in a country like Spain, which by the early 1990s was no longer a net exporter of people, as it had been for half a century, and has instead now become one of the world’s top recipients of migrant workers. In 1991, the INE census counted just over 360,000 foreign nationals, compared to nearly 4.5 million in 2007.

Large numbers of Spanish workers emigrated to the rest of Europe and to the Americas in three distinct waves: prior to the 1936-1939 civil war, during the war (when many people went into exile), and after 1960.

Some observers point to the similarities between their experiences and those of the migrants working in Spain today.

"The situation in which immigrants in our country find themselves is similar to what our fellow countrymen experienced in the 1960s and 1970s," wrote Elena V. Izquierdo, a sociologist who writes on economic issues for a publication produced by the Spanish branch of Consumers International.

"They emigrated to Europe and the Americas with the aim of improving their living conditions and those of their families," she added. "The money they saved and sent back to Spain drove, without a doubt, the country’s development. Up to just three years ago, the amount of money sent home by Spanish citizens living abroad outstripped the amount sent to their home countries by migrants here."

The rapid transformation is reflected in another Banco de España report, according to which remittance revenues in Spain have risen threefold since 1990 while remittances sent abroad have multiplied by a factor of 60.

"Migration operates as a kind of equalising mechanism. In the face of huge wage gaps, immigration contributes to greater equality of wages between the regions that send and receive migrants," said Enrique Alberola, head of the Banco de España’s international economy division.

In the campaign leading up to Spain’s Mar. 9 election, the government said the country’s recent economic boom was largely due to immigrant labour, while rightwing groups blame the current slowdown, fuelled by the rise in prices of commodities like oil, on immigrants.