Mexico migrant town fears fallout from U.S. slowdown

**voivod** · 05.05.07, 05:48 AM

Hmm, what goes around,

BOYE, Mexico (Reuters) - A U.S. economic slowdown and tighter border security threaten a lifeline for millions of Mexicans who rely on money sent by relatives in the United States to pay for everything from food to town fiestas.

The flow of dollars, which reached a record $23 billion last year, is in danger of declining for the first time in at least a decade.

That worries residents of Boye, a farming town in arid central Mexico, where four out of five men work in the United States.

"They don't have jobs or the work is not as steady as in the past. They still send money because they have to send money but from what we're hearing there is going to be less money," said Mayor Fernando Hernandez.

He fears an annual collection of money earned in the United States and given to the town hall and church will come up short this year, forcing the town to pave fewer roads and tone down traditional celebrations of its patron Saint Anthony of Padua in June.

"My husband can't send as much as he did before because there isn't as much work for him," said Angela Ocampo, whose husband works legally most of the year in Florida.

Lately, higher-paying construction jobs have been harder to come by and Ocampo's husband is picking lettuce, broccoli and other crops. She may not have enough money to finish the second story of the house the family is building.

Some homes in Boye boast neat U.S.-style front lawns and satellite television dishes, thanks to cash from up north.

After years of spectacular growth, remittances from Mexicans in the United States now make up Mexico's second-biggest source of foreign currency after oil exports.

SIGN OF TROUBLE

But with the U.S. economy cooling, remittances grew at an annual rate of 3 percent in the first three months of 2007, down from a 28 percent rise during the same period last year.

"We could go into negative territory. It's certainly possible if the slowdown continues in the United States," said Gray Newman, an economist at Morgan Stanley in New York.

The first sign of trouble came early last year with a slump in the U.S. housing industry. Most new construction jobs in the United States were filled in 2006 by foreign-born Latinos, according to a study by the Washington-based Pew Hispanic Center.

A longer-term concern for Mexicans who rely on remittances is tighter U.S. border security.

Homeland Security Secretary Michael Chertoff says last year's deployment of National Guard troops to secure the border has cut the flow of illegal immigrants by more than 40 percent in the second half of last year.

The United States is also building a 700-mile (1,120-km) fence along parts of the U.S./Mexican border to curb illegal immigration. Around half the 11 million Mexicans in the United States are there illegally.

Economists say less cash from immigrants in the United States would probably not hit Mexico's economy as a whole that hard, instead hurting small towns like Boye, nestled in brown cornfields.

But less money from workers abroad would be a big blow to poorer Central American and Caribbean nations.

For El Salvador, the money orders and wire transfers of workers abroad are equivalent to about a fifth of gross domestic product.
And even if Mexico's economy doesn't take a big hit, many millions of people could be affected. A recent survey showed almost one in two people has a relative in the United States.

Irais Hernandez receives $300 to $400 a month from her husband in New Jersey, who does gardening work there and installs drywall in new homes but who is now working just three or four days a week on average.

"Life is hard here," she said, holding an umbrella to shield herself from the sun. "There are no jobs, not in factories or in the countryside."