Follow The Money

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Waly Diabira pats the cover on his bed in the cramped fifth-floor room he shares with two men in a red-brick dormitory building for immigrants near Paris' Left Bank. "My father slept on this same bed, in this same room, for many years," he says. In 1950, his father, Mamadou Diabira, left their tiny village in Mali and caught a steamboat to Europe, where he worked as a street cleaner in Paris for about 25 years, receiving a certificate of thanks signed by then mayor Jacques Chirac. Waly, a 32-year-old building cleaner, only got to know his father when he sneaked into France at 18 on a boat from Morocco; he now works legally in France. A large photograph hangs above Waly's narrow bed, of his 2-year-old daughter, whom he has never met. The migrant tradition has continued into the next generation, fueled by the same force that kept his father rooted in France for decades — the need to send money home. Similar stories swell the immigrant population in Paris and other cities across France, and are multiplied millions of times across the world.

Such tales are nothing new. The color TV in a remote Turkish farmstead and the concrete-walled house amid shacks of corrugated iron have often been paid for by absent family members. Plenty of church halls in Ireland have been funded by passing the plate around congregations in Boston and New York. But the scale of money flows is new. Mass migration has produced a giant worldwide economy all its own, which has accelerated so fast during the past few years that the figures have astounded the experts. This year, remittances — the cash that migrants send home — is set to exceed $232 billion, nearly 60% higher than the number just four years ago, according to the World Bank, which tracks the figures. Of that, about $166.9 billion goes to poor countries, nearly double the amount in 2000. In many of those countries, the money from migrants has now overshot exports, and exceeds direct foreign aid from other governments. "The way these numbers have increased is mind-boggling," says Dilip Ratha, a senior economist for the World Bank and co-author of a new Bank report on remittances. Ratha says he was so struck by the figures that he rechecked his research several times, wondering if he might have miscalculated. Indeed, he believes the true figure for remittances this year is probably closer to $350 billion, since migrants are estimated to send one-third of their money using unofficial methods, including taking it home by hand. That money is never reported to tax officials, and appears on no records.

One reason for the growth in recorded remittances has its origins in the global war on terrorism. To stop terrorist networks using informal transfer systems like hawala in Africa, the Middle East and South Asia (where it's referred to as hundi), European and U.S. officials have cracked down on them. That has shifted payments to easier-to-track official channels. Some migrants, however, still use methods that elude the bean counters. In Hong Kong, Endang Muna Saroh, 35, works as a nanny to two children in a comfortable residential neighborhood, and sends $200 home every month to her mother and 10-year-old son in Surabaya, Indonesia, wiring the money to her brother-in-law's bank account. The country receives recorded remittances such as this worth a total of $1.8 billion a year. Yet like many migrants, Endang also saved hundreds of dollars to carry by hand to her family in August, when she flew home for her first visit in four years.