Are remittances the same as Foreign Direct Investment (FDI)?
Most remittances are sent to pay for necessities. However, there is a group of remitters who send money back home for investment purposes such as in the Cemex´s housing construction program. Since the receiving families are poor and the remitters distant, remitters maintain little control over how the money is spent. Despite the remittance control, those who remit for investment purposes are no more knowledgeable about the various processes for sending money. This control issue makes a hard definition of what could be differentiated as FDI from a remittances standpoint. Finally, from a macro economic view, Mexico’s authorities declared on February 2006 that FDI became the third biggest source of foreign currency last year, with US$17,804.6 million. On the other hand, oil exports were Mexico’s biggest foreign-currency generator, with US$28 billion, followed by remittances, with US$20,035 million.
