Saturday, October 21, 2006

Remittances continue to grow

The money sent back to El Salvador by Salvadorans living in the US and elsewhere continues to grow significantly according to recent released data:

Remittances to El Salvador grew 18.1% to $2.44 billion during the nine-month period, the country's central bank said in a press release.

Salvadoran banks handled 21.9% of remittances through their offices in the U.S. and paid out about 70% of all family remittances through their branches in El Salvador.

El Salvador received $2.83 billion in remittances last year, equivalent to 16.6% of the country's gross domestic product.

Why such strong growth? Are there that many more Salvadorans emigrating? Are Salvadorans abroad getting wealthier and having more money available to send home? Is there a perception that families back home are even more in need of funds than in the past? Are there other reasons?

There is little doubt about the importance that remittances now play in the economy of El Salvador and that this money provides a level of support for many families who would otherwise be in extreme poverty.

4 comments:

Anonymous said...

Remember the narcocapitalist industry that surrounds America, with its main hub in Miami-Mexico-Colombia. All that capital can be easily laundered through remesas. So it wouldn't surprise me if a fair share of that cash WERE part of money laundering operations.

But yes, Central Americans WILL KEEP MIGRATING! Have you ever read Pedro Paramo? Of a ghost town Comala, that became a ghost town because people migrated to the cities... Well, as you know agriculte in this country is pretty much dead, so people are MIGRATING to the cities. But because in the cities it is the same stagnation, people are engaging on their epic quest to the Norte, to finally achieve what they can't do in their Motherlands: subsist even if is under the precarious conditions of living like fugitives in a nation that doesn't want them there (Fourth Reich).

But yes, HAVE NO DOUBT that people migrating is only increasing due to the unstable country we live in, plagued with famine, endemics and crime. Unfortunately, those people that migrate fall into the role of "safety net" for the corrupt treacherous countries that exiled them, and sustain said countries through their remittances instead of fully assimilating into the USA and SPEND all their cash in that country...

Making the Latin American nations COLLAPSE and FINALLY revealing to the brainwashed population the incompetence, corruption, fascist, inhumane ways of our "government". Perhaps that way, we'd be able to achieve what USA prevented Latin America from achieving back in the 80s: being a sustainable region, a developed region, an educated region, a united region, a more just region.


Now that you've touched imigration... Seeing how USA is marked with xenophobia, towards Asian, Middle Easterns, Hispanics, etc... I would like to refresh people's memories onto reminding them that this epidemic of massive immigrations is largely due to USA intervention in countries that were suffering popular movements that sought to create a more socially just/stable nation. It is USA's sponsorship of those corrupt nations that ignited the Latin American diasporas, through the wars and after the wars. I believe USA should feel really lucky that Iraq isn't a Latin American state, or else they'd be massively migrating to USA as of now (I know that many Iraqis are migrating, but I believe they are doing so to Europe) or you'd see the truth comming out of my words.

So if people really want to cut migration, attack it on its roots: corrupt governments that make their respective countries uncapable of sustaining their respective populations ruling in favor of the minority (which are involved in narotraffic, etc.). Demand USA to stop intervening in Latin American issues by doing things that will only perpetrate poverty and therefore give perdure the migrations. Also, seeing how with 3 billion a year to Israel has basically made that nation... tell your leaders to switch that donation to El Salvador, then to Mexico, then to Guatemala, then to Honduras, etc. :)

That way, poverty is stopped and the migrations will as well.

From UAE said...

The money sent back to El Salvador by Salvadorans living in the US and elsewhere continues to grow significantly according to recent released data:
Remittances to El Salvador grew 18.1% to $2.44 billion during the nine-month period, the country's central bank said in a press release.

Salvadoran banks handled 21.9% of remittances through their offices in the U.S. and paid out about 70% of all family remittances through their branches in El Salvador.

El Salvador received $2.83 billion in remittances last year, equivalent to 16.6% of the country's gross domestic product.
Why such strong growth? Are there that many more Salvadorans emigrating? Are Salvadorans abroad getting wealthier and having more money available to send home? Is there a perception that families back home are even more in need of funds than in the past? Are there other reasons?

There is little doubt about the importance that remittances now play in the economy of El Salvador and that this money provides a level of support for many families who would otherwise be in extreme poverty.


Hello Tim,
I would say that yes, there is a mixture of both, there are more Salvadorans migrating and more of the already living abroad are getting wealthier.

You may add to your questions this one: are more Salvadoran families abroad willing to avoid traveling to El Salvador, given the current security conditions, thus, relying more in money transfer businesses?. This is something that the airlines may be able to confirm by telling us if the ethnic market has increased or decreased (ethnic market is, as opposite to leisure travel, the passengers traveling to visit friends and relatives).

There are a few other problems, we can assume, related to the remittances:
1. We are not sure if the money is staying in El Salvador or is returning to the U.S. or other countries. For example, if I receive money from my relatives, I would fulfill my basic needs: food, shelter, clothing, medicines. Most likely you will find people buying goods not produced within El Salvador: cheese from Nicaragua, vegetables from Guatemala, clothes made in U.S.A. or branded in U.S.A. (e.g.: Nike). A good percentage will go to shelter and perhaps little will go to education. Health expenditures will be tackled on an ad-hoc basis, preventive medicine or insurance is basically non-existant among the population receiving “remesas”. The population is just living an eternal present, carpe-diem, nobody is looking further in time.
2. Is production being stimulated?: it seems that instead, Salvadorans are getting used to receive a few “dolaritos” every month and do nothing but wait, and wait, and keep waiting. Also, any Salvadoran observing that relatives abroad are sending money will tend to think “hmmm, I should go to the North, work and send money back”, therefore, immigration is getting stimulated instead.
3. Some time ago I read in another blog a comment with a 3rd problem: we are creating a blue-collar nation. Sweat shops are almost everywhere and most people that used to work in agriculture is now working, or willing to work, in “maquilas” (sweat-shops), therefore becoming ideal to work on “whatever” in the U.S. Little are government AND society doing to support education, to grow its interest in the population. When our Salvadorans go to the U.S., not all of them go and make use of the education system available there, instead they decide to get into gangs, so, instead of receiving doctors, engineers, specialists, that will contribute to the cultural growth of El Salvador, we receive back Mareros, trained in the fine arts of murdering and stealing by the best teachers available in L.A. and NYC; these mareros have the best education, they are global, they have networked with Latin mafias, Indian mafias, Russian mafias, and they bring all that knowledge back to El Salvador.
4. Before the war years, many Salvadorans left to San Francisco, most of them grew old and are no longer within a working population, their families in U.S. were born and raised there, little they know about El Salvador and perhaps would not like to come back. Will it happen to the people gone to Los Angeles, Washington D.C., Houston/Dallas and NYC?, if it happens, will El Salvador be prepared to stop receiving money …

In conclusion, yes there is no doubt of the importance of remittances, but who is really receiving a good share of benefits?

Note that I have not mentioned other problems such as corruption (mentioned in a previous comment to your post), money laundry, etc…

Let’s see …

Anonymous said...

Remittances will continue to grow because the current immigrant population is maturing and gaining more wealth plus everyday more salvadoreans immigrate to the US.

Anonymous said...

Yesterday at the Asamblea Legislativa thing in TV, some FMLN deputy started talking about this same topic. About remittances, and how according to a UN report (I believe, do not recall exactly) in 2005, of the remittances sent 1,800 million dollars were part of a money laundery scheme, be it thanks to narcotraffic or whatever.