Monday, November 13, 2006

The dollar flow into El Salvador

A new article in the Houston Chronicle, describes the impact, positive and negative, of the growing amount of money sent back to El Salvador by Salvadorans living in the US. These remittances have created families, and a country, dependent on the constant flow of dollars from abroad. Here are some of the points from the article:

  • Some say remittances make some recipients lazy, or at least picky about the work they will agree to do for low wages, leading to shortages of laborers in the fields of El Salvador

  • As a consequence of the labor shortage in the agricultural sector, as many as 200,000 Hondurans and Nicaraguans now come into El Salvador to work because they will work for lower wages than Salvadorans who have the support of remittances.

  • Remittances have led to some reduction in poverty in El Salvador.

  • Remittances have not been an engine of economic growth, but El Salvador has turned into a consumption society, consuming more than it produces.

  • Remittances allow youth to stay in school rather than taking jobs to support a family. But El Salvador's economy does not create sufficient positions for persons with education -- so there is a great incentive to look to the US for jobs.


Anonymous said...

Another good point should be that the billions of dollars that are laundered through remittances strengthen the narcocapitalist system established in the region, and it will surely fatten some mafioso's pockets.

Claudia said...

The thing is this is not new at all. Salvadorans have known this for a long time. Now that´s scary!!

HODAD26 said...

without these remittances. El Salvador would have nada
coffee, sugar, shrimp were 1,2,3
exports, no more....
now, even the maquillas textile industries are leaving for China
que lastima
but, January, the new Democratic Gov, will be looking strong at these monetary transfers
as they should


CO LATINO had a very telling story in its cover page today, about a UCA panel which posited the hypothesis that the real power in El Salvador today has everything to do with the dollar, and nothing to do with the vote. The analysis was very specific with respect to corporate power. I think that the conclusions drawn, and the inferences drawn, remain to be proven or are the subject reasonable people can disagree about, but we ought to at least get on the same page to begin a discussion and the page the Jesuits are reading from rings true to me.

Chero said...

Interesting article