Remesas

The credit crunch in the US is starting to affect economies further south in an interesting way: the flow of dollars remitted by Latin Americans to their home countries has begun to weaken.

In Mexico for instance, these remesas represent the second largest source of 'foreign investment' while in Haiti they account for a third of the local economy. The weakness of the Dollar and a slow-down in the US construction industry are aggravating factors.

Yet as the currencies in countries like Mexico and Guatemala largely share the fate of the Dollar, travel writers are starting to sing the praises of such destinations, because their money hasn't lost its purchasing power down there to quite the extent that it has elsewhere.