CHINA

The student's presentation of this week was about China. They exposed the political, social and demographic background of the country and its impacts on its economic development.
Then they talked about the influence of capitalism in the economic growth.

Among many things, the material of this week included the case of Google in China and an Analysis of National Strategies for Sustainable Development China, a case study Prepared by: Simone Klawitter.
In order to follow this path and analyse my "own case", I searched for other interest cases about China and found A Case Study: Microsofts Experiences in China.

The Harvard Business School Published the Case: "Microsoft in the People's Republic of China", for the first time in Feb 13, 1995 and it was prepared by Tarun Khanna.
Even though the Case is a little bit old, it exposes in my opinion a great cultural Boom, I say Boom because allthought in the beginning it was a great failure, Microsoft managed to succeed in a shocking way in the foreign country.

Some important facts of the case are.

• In 1992 Microsoft entered the Chinese market, with the same strategies they had used to enter and had made them successful in Europe and United States.
• However, its entry into this market was a disaster, Microsoft was operating at a loss.
• They lost many billions of dollars in revenue before understanding this market and being successful.
• General Managers were not stable; in a one year period the company had 5 different executives, this job position started being called the "Curse of Microsoft".
  
• In United States and Europe:
  
• Microsoft charges hundreds of dollars for its Windows operating system and Office applications.
• In United States, Microsoft maintains a constant dispute with the government.
• Microsoft is known for its tendency to establish aggressive executives.
• Microsoft is the industry leader and is known for its high quality, excellent customer service and support to its products. He is recognized for its high degree of innovation and its constant concern to research and investigation.
• One of the main policies of Microsoft is to protect at all costs intellectual property rights; The Company is constantly working with the industry and the governments to understand the importance of intellectual property laws and improve its implementation.
• The tactics of Microsoft in its technology business is to "embrace, extend and extinguish" (EEE)
• In 1992 the acceptance of the brand was high, all people used Windows, but pirated copies.
• Microsoft made several lawsuits to companies for distributing its products illegally hopping to protect its intellectual property.
• The government of Beijing installed operating systems on open source Linux PCs workers.
  (http://money.cnn.com/magazines/fortune/fortune_archive/2007/07/23/100134488/index.htm )
• Security officers had a great concern about the possibility of being spied by the United States, due to the fact that military and government operations depended on the programs made by the company.

Here is some information that I found I think is important in order to generate a better analysis:

For centuries China stood as a leading civilization, outpacing the rest of the world in the arts and sciences, but between the XIX and the XX century, the country began to decline due to starvation, military defeats, internal conflicts and the occupation of foreign countries.
After the Second World War, Mao Zedong established an autocratic socialist system that ensured China's sovereignty but with excessive restrictions. After 1978, his successor Deng Xiaoping, starts to improve the living standards and develops the economy.
In Addition to all this, China also suffered the Opium War, which was a great humiliation for the country. It is because of this war that the culture became xenophile.

Since 1978 the annual growth of GDP is around 9%. For 2007 it was 11.4%. The country's economy has changed during this last quarter of century in an unbelievable way.

From being a central planning system, closed to international trade, China change in a market-oriented economy with a rapidly growing private sector. In 2007 it became the second largest economy in the world after the United States (not in per capita income).
The government is very important in the growth of the economy.

The Chinese nation is deeply rooted in the moral concepts of the two great philosophers, Confucius and Lao-zi, respectively creators of Confucianism and Daoism. Punctuality is expected and will not tolerate tardiness. The long-term relationships are considered extremely valuable.

Mistakes of Microsoft:

• The company entered China with the classical model: hang a poster that says "Microsoft: Open for Business "(Craig Mundie) ttp://money.cnn.com/magazines/fortune/fortune_archive/2007/07/23/100134488/index.htm
• High piracy was taking place in the streets of China and the prices charged to the products by Microsoft where very high; their Anti piracy policies were excessively harsh.
• There was a desperate search to sell "at all costs."
• The executives in charge of operations were rookies, and in addition they agree with the strategies so they failed in the implementations.
• Microsoft came to the Chinese market as an arrogant company, but reality showed that it was a naive and ignorant company.
• They treated China as a transparent market and assumed a transparent regulation.
• From the beginning Microsoft assumed the superiority of its product.
• The company's efforts to make its top executives in Redmond understand China had been in vain and rejected.
• Sales of the company were above average and they were overestimated.
• The company was not focused on having a collaborative and cooperative relationship with the government.
  

Good Decisions of Microsoft:

• In 1998 Microsoft created the research center.
• IN 1999 Bill Gates sent Craig Mundie, chief executive of the company, to analyze why the company was so despised and wrongly qualified. He is currently in charge of China's strategy. From this point on, the Company started to succeed.
• In 2003 The Company hires Tim Chen.
• Currently, the company is envied due to the preferential treatment that receives from China. Bill Gates has been named honorary doctor in several universities of the country, and his relationship with political leaders is excellent.
  

The Changes of Craig Mundie:

• He made the "China Immersion Tour." where for a 1 week period, he entered 25 of the 100 vice presidents of the company.
• He hired Henry Kissinger as a consultant and as the person in charge to "open doors" for the company.
• He let the leaders know that Microsoft would help the Chinese government with one of its main priorities; create their own software industry.
• He sat down with security officers and soothed their fears of a possible espionage, and convinced them that the company's products were not a tool of American government.
  

The Changes of Tim Chen:

• He made extended training for teachers and small software business.
• He worked with the Ministry of Education to construct a 100 computer's rooms of in rural areas.
• Changed the company's perceived image of and he created a convergence between the corporate policies and the government's policies. He makes Five-year plans with the government.
  

Analysis and Conclusions:

Microsoft restructurated its entire business strategy, basically the new strategy was to become the ANTIMICROSOFT; The Company set very low prices ($ 3) and abandoned its policy on intellectual property. They began to tolerate piracy and became a friend of the government.

They let the government install its own cryptography in Windows, and in addition, they allowed China an inspection in 2003 of the source code of the program.

Chinese government began to require the use of legitimate software to authorities and PC manufacturers. Now Days, Microsoft's cooperation is very high, annually Chinese engineers travel to Redmond for trainings.

China is a great market and could become a great business opportunity, if its handled in a proper manner; taking the time and the steps necessary to understand this culture and its "way" of doing things.

Microsoft achieved success in China when they realized they couldn't change the market and the began to adapt the company in to the market.

To be a successful and profitable business in China one must work in harmony with the government and constantly seek their approval. Companies that are sincere, flexible and are committed to the government achieve success in China.

When Microsoft began to focus on understanding China; they started to understand completely the harsh criticism to which the company had been submitted.

This case demonstrates how important is to understand the culture and the ethical rules of a country, and much more, a country like China. Investing time in building the appropriate relationships with the right people can bring higher returns than an excellent advertisement.

Bibliography

Warner, Malcolm. 2004. Human resource management in China revisited: introduction. International Journal of Human Resource Management, 15(4/5): 617-34.

Ian Johnson. (2009, April 28). World News: Foreign Businesses Say China Is Growing More Protectionist. Wall Street Journal (Eastern Edition), p. A.8. Retrieved May 17, 2009, from ABI/INFORM Global database. (Document ID: 1689390691).

James Hookway. (2009, May 2). World News: Once Enemies, Vietnam Now Fights for China Funds. Wall Street Journal (Eastern Edition), p. A.7. Retrieved May 17, 2009, from ABI/INFORM Global database. (Document ID: 1695314061).

http://money.cnn.com/magazines/fortune/fortune_archive/2007/07/23/100134488/index.htm http://noraagnow.wordpress.com/2008/03/04/microsoft-and-wal-mart-in-china/ http://www.chinasuccessstories.com/2008/02/25/microsoft-and-wal-mart-china/

http://www.chinasuccessstories.com/2007/05/24/building-a-business-in-china/
http://www.chinapoint.org/doc.asp?docu=168
http://scholar.google.com/scholar?hl=es&q=microsoft+en+china+cultura&spell=1: guanxi[1].zip - ZIP archive, unpacked size 111.104 bytes
http://usinfo.state.gov/journals/itsv/0606/ijss/weaver.htm
http://www.elpais.com/articulo/internet/choque/cultural/Microhoo/elpeputec/20080202elpepunet_2/Tes
http://www.hrw.org/english/docs/2006/08/09/china13940.htm
http://download.microsoft.com/download/6/9/2/6921e89d-1cbb-4ce8-9b1d-44eb2d818848/Politica.doc
http://www.chinasuccessstories.com/2007/09/10/doing-business-in-china-chinese-social-and-business-culture/es/
http://www.kaifulee.com/oldwebsite/speeches/Advice_for_US_Companies_in_China.ppt#284,24,Diapositiva 24

East Asia

This week we looked in to the increasingly important region of East Asia, and its countries.
All thought I have always been passionate about this region and especially about China and Japans Culture I was still amazed by all the information that the lecturer team exposed.

This region represents a quarter of the total population of the world and its main constituents are:
• People's Republic of China (Including Hong Kong and Macau)
• Japan
• South Korea (Republic of Korea)
• North Korea (Democratic People's Republic of Korea)
• Republic of China (Taiwan)
• Mongolia
• Siberia, Russia (considered either East Asia or North Asia)
The most predominant languages are Chinese, Japanese, Korean and Mongolian and the religions that the practice are Buddhism, Confucianism, Taoism, and Chinese folk religion, Shinto, Shamanism and even Christianity.

All of these political entities join together and as a result create a unique, rare but yet exquisite way of life. And even though it's a big mixture, diversity is not so easily perceived, due to the fact that through out history, many of these East Asian societies where part of China and its cultural sphere. That's why these cultures are at the same time similar, unique and diverse.

Although several religions are fallowed and practiced; these societies have a strong tradition and legacy and they are all influenced by Confucianism, Daoism (or Taoism) and Buddhism.

Contrary to what the speakers said, these are not religions; there are philosophies that represent a set of moral and ethical values that people must comply.

Buddhism’s Six Principles of Harmony (amtfweb):
1. Sharing the same viewpoints or goals,
2. Abiding by the same precepts,
3. Living and practicing together harmoniously,
4. Not quarrelling,
5. Experiencing the inner peace and happiness from practicing together harmoniously and
6. Sharing benefits harmoniously.

Based on the suggested lecture of this week: Lee, Jangho, Thomas W. Roehl, & Soonkyoo Choe. 2000. What Makes Management Style Similar and Distinct Across Borders? Growth, Experience and Culture in Korean and Japanese Firms. Journal of International Business Studies, 31(4): 631-52.

The lecturers emphasized the presentation on Japan, Korea. They analyzed both countries management model of this country and compare it.

Letter on I started to think on the proper question to make in order to learn a little bit more and I found myself reading even more shocking information about this economies.

(Rashid 2008)As one looks over the many momentous events that took place in the 20th century, such as the two World Wars and the Cold War, one lesser noted event stands out sharply for its long-term significance. It is the lesson East Asia has taught the World--7% economic growth is possible. And this growth can extend for decades. First Japan, then Taiwan and South Korea, then China, all have shown that 7% is not a one-shot event but a real possibility.
Ten years on from the 1997 financial crisis, East Asia is wealthier, poverty rates are lower and growth is faster than ever before. According to the World Bank, developing economies in East Asia grew by an average of 9.5 per cent in 2006.

Low income countries such as Cambodia, Laos, Vietnam and Mongolia also grew at an impressive 8 to 10 per cent. According to World Bank estimates, in 2006 the number of people in East Asia living on less than US$2 a day fell to around 29 per cent of the population.


And this is only the top of the iceberg, I'm sure that this region will manage to keep surprising the world. (SinoCast 2008) In December of 2008 Leaders of China, Japan and South Korea agree to create a logistics system in East Asia that is seamlessly linked, environmental-friendly, safe and efficient, in a bid to promote the convenient mutual trade and economic growth. The three countries have reached consensus in starting trilateral cooperation in energy, logistics, customs, industries, and finance. The leaders expected a closer partnership would help them fight against the global financial turmoil triggered by the subprime debt crisis in the US.

The three sides will also strengthen the financial dialogue and cooperation among their finance ministries, central banks and other financial regulatory organs to concentrate effort on the stabilization of the regional financial market.


After doing all this readings I started to think on Confucianism and Daoism and realized that perhaps this influences and this "way of live" it's what has made these countries the miracles to watch and the role models to all poor economies and developing countries.

But the answer to this question had to be postponed because of the complexity of the research that had to be made. In juxtaposition I asked my self a simpler question.

Japan is the most evolved, solid economy of this region, what makes this country so different from others, what has this country made in order to become one of the most powerful countries of the world without having the richness of countries like Colombia? Is it some how the influence of Confucianism, Daoism and Buddhism?

Japan was the first country of this region to become a "miracle" without any comparative advantage, and with a lack of territory. After the war, and starting "with nothing", the country rebuild itself into an astonishing country and became to grow in to what is today, a role model for many countries.

(Beech 2008) Until recently, the idea of Japanese values conjured up little more than a picture of workaholic company drones. But throughout the world, the world's second largest economy has suddenly been thrust into the unfamiliar position of exemplar. Developing countries such as Vietnam are studying how Japan refashioned its war-ravaged economy into a technological powerhouse that still maintains its cultural identity. Industrializing nations are looking for ecological guidance from a place that has managed to become an economic giant while still embracing a conservationist ethos. Still others gravitate toward Japan because of its trendy comic books and, not least, for its generous checkbook.

One key principle is an ability to modernize without losing its roots. "The history of Japan in modern times," says Kazuo Ogoura, president of the Japan Foundation, "is to have achieved advanced economic progress and democratic maturity without having abandoned cultural identity and traditions." Environmental protection is another cherished value in a country that is home to the Kyoto Protocol. "The leaders of Japanese industry are aware that climate change is an important issue, so they are very focused on energy efficiency," says Takashi Hongo, a special adviser to the Japan Bank for International Cooperation, which provides financing for poorer nations. "We can help developing countries enjoy the good life but to do so in a sustainable way."

Bybliography

China, Japan, South Korea to Smooth Trilateral Logistics. (2008, December 15). SinoCast China Business Daily News. Retrieved March 22, 2009, from ProQuest Asian Business and Reference database. (Document ID: 1612601351).

Hannah Beech. (2008, December). Japan Reaches Out. Time International, 172(21), 30. Retrieved March 22, 2009, from Research Library Core database. (Document ID: 1602001031).

Matthew Rees. (2008, December). Friends or Foes? Review of Finance & Development, 45(4), 51. Retrieved March 22, 2009, from ABI/INFORM Global database. (Document ID: 1622189741).

Robert Madsen, Richard Katz. (2009). Comparing Crises. Foreign Affairs, 88(3), 159-166. Retrieved March 22, 2009, from ABI/INFORM Global database. (Document ID: 1688945331).

Salim Rashid. (2009). The Magic of 7% Per Capita Growth. Society, 46(2), 108. Retrieved March 22, 2009, from Research Library Core database. (Document ID: 1679788101).

Tianbo Li and Gillian Owen Moreira (2005). The Influence of Confucianism and Buddhism on Chinese Business: the Case of Aveiro, Portugal. University of Aveiro
Portugal. Retrieved March 22, 2009, from www.immi.se/intercultural/nr19/tianbo

Kejun Xu, Illinois Institute of Technology. The Implications of Confucian and Daoist Values for Multinationals in Intercultural Business Communication

Henry Suen Sai-On Cheung, Reuben Mondejar. Managing ethical behaviour in construction organizations in Asia:How do the teachings of Confucianism, Taoism and Buddhismand Globalization influence ethics management?

http://www.amtfweb.org/english/understandhtml/english-artistic.htm

All Images Where Taken from: http://www.shutterstock.com/

Film review: Paraiso Travel

Paraiso Travel talks about Latin Americans illegal migration to the US and throw Mexico. The movie chronicles the difficult and dramatic journey of immigrants as they make their way to America with the hope of reaching the American dream.

Even though the movie evolves around the story of a Colombian young couple, the Colombian director, Simon Brand, captures the traumatic path that Latin American immigrants go throw when swimming across the Rio Grande and walking across the Texas desert to finally get to America, as if it was the "promised land", only to become "mojados".

Mojados is a derogatory term for a person of Hispanic descent who has immigrated illegally to the United States. Commonly referring to Mexicans, although applicable to all Latinos, who have crossed the border illegally, the term originated with those who entered Texas from Mexico by crossing the Rio Grande, presumably by swimming or wading across and getting his or her back wet in the process. (www.answers.com/topic/wetback)

The movie takes place in Colombia and New York; its stars in Medellin with Reina, a teenager that like many others, is obsess with the idea of living the American dream. Reina hopes to find fortune in New York City. Marlon, her boyfriend, who is madly in love with her and entangled in her web of fantasies follows her will to reach their dreamland.

Unfortunately, the young couple doesn't have paper or sufficient money to reach their goal; so "they are forced" to take the horrible migration across Mexico. The journey that is no less than an expedition, where women are raped, men are shot and the main companions are fear, hunger, intimidation and sadness.
When the Colombian couple completes the illegal crossing, they start to experience all the troubles that include being illegal or a mojado, in the United States.

After arriving to the "big city" (NY) they got separated, and Marlon gets lost and looses all track of Reina. Luckily he meets and receives help from other immigrants. Stimulated by the idea of finding his love, goes through a nightmare and has to work in all sorts of thing in order to survive.

Shortly he realizes that he left behind his own dreams and gave up a simple life in Medellin, for a cruel and lonely reality. And that the reward for suffering all the way to America is only the promise of a little money and many long days soaked with sweat.

"Paraiso Travel" shows the harsh struggles Colombian immigrants have to endure as they make their way to the United States. As well as conquering the physical elements some face different problems, as in the case of Marlon. A young Colombian whose love is put to the test when he losses his girlfriend in New York City after a small run in with the police. The movie shows us how a small group of immigrants make their way from Colombia to Texas. The story was interesting and makes you realize the struggles of the immigrant. The movie gets it's point across by showing you the mental anguish of Marlon, a small fish in a big lake. (B. Cárdenas Cinevolver).





(Paraisotravelmovie.com) Adapted from Jorge Franco's acclaimed novel of the same title, PARAISO TRAVEL (which has broken box-office records in Colombia) is the story of Marlon Cruz (Aldemar Correa), a young Colombian man who, motivated by his girlfriend Reina (Angélica Blandón) leaves his comfortable life in Medellín and flees with her through Guatemala and Mexico, across the borders, illegally into the United States. Marlon's journey, which takes him through seedy strip clubs, dance halls, homeless hostels, and the streets of Jackson Heights ultimately takes him to a place he could not have predicted. Directed by Simon Brand with a screenplay by Jorge Franco and Juan Rendón, PARAISO TRAVEL also stars John Leguizamo, Margarita Rosa de Francisco, and Ana de la Reguera.

Paraíso Travel takes place in Colombia and New York and is spoken in Spanish, with English subtitles.
Paraiso Travel transcends a micro-understanding of Colombian immigration and assimilation into the United States and tells a larger human story of Latin American identity, all the while staying true to specific Colombian characteristics. Brand addresses why the film is not only for the Colombian and Latin public but for the American and European public as well, he says it is "because of its quality in every sense. A film like Paraíso Travel is relevant everywhere, above all in the United States, where in New York alone there are over a million Colombians and three million Latin people. It is a large community, decisive, and with growing power."

(Padgett 2008) "I wanted to make a film that makes Latin Americans think twice about traveling to the U.S. illegally," says its Colombian-born director, Simon Brand, "but one that also makes Americans think twice about how these people are treated once they get here." He scores on both counts.

The movie is very touching and emotional, but I decided to look to real cases and I found that reality it's not so different from the film, and in some occasions it can be even more crude and terrifying than the movie.

In June 2003, Robert C. Bonner, the Commissioner of the U.S. Customs and Border Protection Operation Desert Safeguard, made the following statement: In the past 5 years, more than 2,000 people have died attempting to cross the border between Mexico into the United States. Over 320 people died last year alone. And one of the most treacherous and dangerous areas to cross is the Sonora desert that extends from Mexico's State of Sonora into the State of Arizona, west of Nogales.

To wrap up, I wanted to share some reviews and parts of Tommy Davis, documentary "Mojados: Through the Night" taken from (mojadosmovie.com/press/):

When Tommy Davis told people he wanted to accompany a group of migrants traveling illegally from Mexico into the United States so he could film a documentary, they told him there was no way he could pull it off.

The result is "Mojados: Through the Night," a 65-minute documentary about a group of Mexicans who hope to cross the border to find jobs so they can send money to their families back home.

Guapo nicknamed "Handsome" just wants to use his carpentry skills to export his hand-crafted furniture to the United States. Oso, they call him "The Bear," in his 50s is the oldest of the group traveling illegally to the United States using the money he earns to buy land back in Mexico. Yet, another traveler is Tigre who spends most of his time each year picking vegetables in the US returning home for Christmas with money and gifts for his family. Finally, Viejo also known as "Old Man" decides to make the grueling trip across the Rio Grande and the dangerous desert even though in the past he has resisted due to an injured leg.

Davis tracks the progress of Hansome, The Bear, Tigre, and Old Man, step for step starting in Mexico where four are shown with their impoverished families. The depiction appears to be honest revealing that jobs in Mexico are scarce and those that are available don't provide the opportunities that even the lowest paying jobs offer in America. The risk associated with the walk seems worth the trouble at first, but as the hours and the days pass, we learn quickly why some 2000 people die each year attempting to make the hike.

In shooting Mojados: Through the Night, Davis ate what the four men ate (increasingly green tortillas, while they lasted), drank what they drank (water scavenged from cattle tubs, when they could find it), slept among the cacti, and schlepped 80 pounds of gear.

Nevertheless, he managed to keep his spirits up, at least most of the time.

"At one point, I knew we were walking in a circle, but I didn't have a compass to prove it," Davis recalls. "Finally I just sat down on the ground and told them I needed a break."

"Oso" was the veteran of several trips north, and he made Davis prove his grit by climbing a mountain with him. He also taught Davis the rules of the desert. "You can't take a knife or anything that might be used against you," he explains. "And if anyone gets hurt and can't go on, they're left behind."

"It just shows we have no clue what people will do for a job," Davis says. He recalls meeting a 12-year-old who had made it to Arizona but lost his family in the process. "I asked where he was going, and he said, 'Florida,'" Davis says. "It was 110 degrees that day, and he was ready to just start walking."

Bibliography

Tim Padgett. (2008, March 11). An Honest Look at Illegal Immigration. Time Magazine. Retrieved March 15, 2009, from www.time.com/time/arts/article. (Document ID: 0,8599,1721458,00).

U.S Customs and Border Protection. (2003, June 3). Statement Of Robert C. Bonner Commissioner, U.S. Customs and Border Protection Operation Desert Safeguard. Retrieved March 15, 2009, from www.cbp.gov/xp/cgov/newsroom/commissioner/speeches_statements/archives/2003/jun032003.xml
http://www.paraisotravelmovie.com/

http://www.mojadosmovie.com/press/

http://www.flixster.com/movie/paraiso-travel/reviews/Cinevolver?lsrc=MD-ANON-TP-REV-MORE

An approach to Reality: Expatriates and migrant workers

This week's topic touches one of the most "talked" international issues in our present time and is perhaps, till now, the most "near" topic to our country and reality; Expatriates and Migration Workers.

According to the presenters in charge; Migration is the movement of people from one place in the world to another for the purpose of taking up permanent or semi-permanent residence, usually across a political boundary, and an expatriate, is a person who lives or works outside of his or her own home country on a non-permanent basis.

The phenomenon of Migration is influenced by "Push" or "Pull" factors; these factors are the ones that make this "movement" hard or easy.

In developing countries such as our country, the decision to migrate is most of the times taken based on the ideas and believes of finding a better quality of life, having job opportunities, education, security and other welfare conditions and privileges. But sometimes these migrations are forced because of violence and discrimination on the native country.

Ernest Ravenstein, an English geographer that is widely regarded as the earliest migration theorist, established the principal reasons ("laws") that cause migration. "Laws of Migration" (1889). Other important migration theorist is Oded Stark, he suggests that the opportunity for emigration can have the opposite effect – that is, improve the welfare of those left behind.

It's important to clarify that migration can have both positive and negative consequences on the host country as well as on the mother country.

Internal, External, Emigration, Immigration, Population transfer, Impelled migration, Step Migration, Chain, Return or circular migration and Seasonal movement, are the 10 types of migration and possible movements. Depending on the type of migration people are classify as emigrant, immigrant, refugee, internally displaced person or migration stream.

Due to its growing history and its present magnitude, governments like the United State's government, had to create immigration policies.

Unlike most migrant workers, Expatriates know what to expect in their experience abroad. Expatriates can be classified according to their working setting; 1) Parent Country Nationals: A parent-country national is a person working in a country other than their country of origin. 2) Host Country Nationals: A host-country national is an employee who is a citizen of a country in which an organization's branch or plant is located, but the organization is headquartered in another country. 3) Third Country Nationals: A third country national is an employee who is not a citizen of the home or host countries.

Expatriate failure it not very common, but sometimes it can happens due to a Culture shock.

In addition to the social and political impact that the expatriation and migratory situation has globally, an important economic impact is also held by the expatriates and migrant workers in their home country as well as the host country.

This economic impact is formed by the remittances: Remittances are the transfers of money by immigrants to their home countries. For the native country the impact is a positive one, because the "beneficiaries" (commonly the workers family), spend this money on the national market and increases consumption. The increase of consumption increases the need of companies to produce, which reflects in the need for more labor force. (Fifield & Saleh 2009) Cash transfers to families in the home country help to alleviate poverty, fuel demand for real estate and provide national economies with an additional source of foreign currency.

In the other hand, the foreign country has a money outflow.

At the end of the presentation the team asked; how will the Crisis affect developing countries in the long term? When searching for the answer to this question I read an article of Heba Saleh and Anna Fifield where they wrote; Cash transfers from nationals living abroad that boost regional economies are under threat.

I thought this affirmation while crude was very realistic; the truth is that the financial crisis that began last year in the United States has spread all over the world and has send many developed economies to recession, such as Spain. This recession means fewer jobs for migrants, so following this trend, remittance levels will obviously drop as a result of the financial deceleration.

In this post I aim to answer this question and confirm "the growing threat" by "revealing" some remittances numbers to date and some world economist analysis and government data.

(Schuman 2009) Remittances from overseas workers--small dollops of cash sent home by workers to sustain families--add up to a major source of income for tens of millions of the world's poor. The World Bank estimates remittances to developing countries totaled $305 billion in 2008, triple the amount of development aid provided to poor nations. Remittances, however, are projected to shrink at least 5% this year.

(Business and Finance 2008) Almost 10% of the Philippines' 90 million people work abroad, many having left frustrated by few economic opportunities in their corruption-riddled, impoverished homeland. The country is world's fourth-largest recipient of remittances, after China, India and Mexico.
This vital cash flow could slow, of course, if the global economic outlook continues to deteriorate and Filipino expatriate workers lose their jobs. But for now, the Southeast Asian nation appears well-positioned to ride out the current storm. Unlike some countries that are heavily dependent on remittances, the Philippines' expatriates are more likely to be filling professional roles in the fields of education and health care, which economists see as less vulnerable to layoffs during a recession.

In contrast, the World Bank said in a recent report that the slowing U.S. construction sector, which employs many migrant workers from Central and South America, was cutting the flow of remittances to many of those countries, especially Mexico. Remittances to Mexico, mostly from workers in the U.S., dropped 6.5% in the third quarter from the same period last year.
"Countries whose migrants are employed in cyclically sensitive sectors such as construction may be relatively more vulnerable to downturns," the World Bank said.

(Castillo 2009) The money Mexicans living abroad sent home fell 3 percent in February (2009) compared to the same month last year, the central bank's president said Wednesday. Even so, the drop was less than in January, when remittances were down 12 percent compared to January 2008, Guillermo Ortiz said during a news conference.
Remittances have been dropping for two reasons: the U.S. recession and a crackdown on illegal immigration that has stemmed migrant flows.
Last year was the first time remittances -- Mexico's second-largest foreign income source -- have fallen year-to-year since the bank started tracking the money 13 years ago.

(BBC 2009) Konstantin Romodanovskiy, head of the Federal Migration Service [FMS] of Russia, says that because of the crisis the number of labour migrants has fallen by 13 per cent in the first six months of this year. He described the moving of labour migration to the Far East region as a positive trend. "We have exhausted our four-month quota for migrants by 25 percent, we are using the quota sparingly, in order to provide jobs for our citizens in the time of crisis"

(Kathleen Moore 2008) The global economic downturn is likely to cut the amount of cash sent by millions of migrants worldwide to their families back home, the UN and other agencies have warned, and the impact is likely to be felt keenly in Eastern Europe and Central Asia.

"A number of our countries -- Tajikistan, Moldova, for example -- have very, very high dependence on remittances," says Pradeep Mitra, the World Bank's chief economist for Europe and Central Asia. "Therefore, as the world economy slows, as we expect it will -- there will be a slowdown in Russia, Kazakhstan, and Ukraine -- the poorer countries are going to be hit because the flow of remittances is going to go down."

Finally, here are some enlightening parts and quotes of different persons taken from the article of Anna Fifield and Heba Saleh; Tide of migrant income set to fall:

With one or two exceptions, the Arab countries of the Middle East fall neatly into two categories; those that export hydrocarbons and those that export labour. While the first group now faces the threat of a prolonged period of low oil prices, the second has to grapple with the prospect of a decline in remittance flows from expatriates, whether they work in the wealthier oil-producing parts of the region or elsewhere in the world.

The World Bank expects remittance flows in the Middle East and North Africa to decline by 6.7 per cent in 2009, and to plunge even lower if the global crisis turns out to be worse than expected.

"Remittances are hugely important, not only in terms of gross domestic product, but also in terms of domestic consumption," says Simon Kitchen, economist at EFG-Hermes the private investment bank "Any drop will affect consumption. A remittance from a worker might support five people or more, and a lot of the money sent home is used to consume. If it is invested, it goes into real estate."

"Growth since 2000 has been driven by a new wave of immigrants who went to Europe and the US," says one investment banker. "These are mainly skilled people like engineers and IT specialists. But we are now seeing Moroccan investment bankers considering returning home. Everyday we see resumes sent by them."

"Remittances are important to Jordan because they help narrow the current account deficit," says Farouk Sousa, sovereign ratings director at Standard & Poor's. "The external balance, which is already weak, would be even weaker if it weren't for remittances."

"It is very difficult to assess the impact," says Nassib Ghobril, head of research at Byblos Bank. "But there are indicators that show there will be a decline, such as the slowdown in outflows from the Gulf and the US."

Bibliography

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