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Increasing Economic Integration, Political Dialogue, and Policy Coordination

Globalization also has stimulated economic integration in ways beyond state-authorized trade accords. Today, informal integration-reflected in money transfers or remittances sent by immigrants in the United States back to their Latin American homelands-increasingly links the two Americas. Even after a global economic crisis decreased the level of remittances in 2009 by 15 percent, nearly $59 billion still flowed into many Latin American states,8 a sum much greater than levels of either foreign investment capital or official aid. Mexico, Brazil, Central America, Colombia, the Dominican Republic, and Ecuador are all major beneficiaries of this economic interchange: in 2009, for example, Mexico received over $21 billion in remittances, Brazil $4.7 billion, and Guatemala and El Salvador $3.9 and $3.4 billion respectively. Beyond simply transferring funds back home to help sustain their families, Latino immigrants have deepened economic integration through their travel and consumption habits. For example, 30 percent of tourists that travel to the Dominican Republic are Dominicans living abroad (mostly in America); 40 percent of tourists to El Salvador are Salvadorans, and similar patterns hold for Nicaragua and Honduras. Studies indicate that these “diaspora tourists” typically spend $1,000 per stay (excluding air fare) on local goods and services, which has a multiplier effect in local economies. Conversely, while in the United States, their demand for certain familiar “home products” creates niche markets in the U.S. economy that benefit Latin American exporters and U.S. importers alike.9