Central American remittances in this new economy

remittances

Remittances account for large amounts of Central American GDP annually. Much has been said about the state of the US economy, and for good reason. Yet, often, the further down the line of production, average Americans and immigrants voices are hardly heard. With the loss of jobs and the fluctuations in the value of the dollar, some countries are hit harder than others. With $64 billion already sent to Central America and the Caribbean ($4 billion less than last year, an average 7 percent decline), more than combined aid and foreign investments combined, it will be difficult to tell today how these declines will impact everyday life.

In Guatemala, remittances are down by 10 percent.

    Remittances from January through May totaled $1.59 billion, Banco de Guatemala said on its Web site, down from $1.76 billion in the first five months of 2008.

    Last month Guatemalans abroad sent home $332.6 million, about $7.08 million less than in April, according to the central bank.

    The amount of remittances in May was down 16.4 percent compared to the same month in 2008, when $397.98 million flowed into the country.

    Authorities attribute the fall-off in remittances to the world economic crisis, above all in the United States, where 1.2 million Guatemalans have settled, 60 percent of them without the proper required immigration papers.

In El Salvador, the Central Reserve Bank, which tracks remittances on a monthly-basis, also reported a 10 percent decline.

    Las remesas familiares acumuladas en los cinco primeros meses de 2009, ascendieron a US$1.444.0 millones, mostrando una reducción anual del 10% con relación al mismo período del año anterior…

    La disminución en las remesas es equivalente a US$160.0 millones. Solamente durante mayo, el monto de las remesas familiares recibidas fue de US$308.2 millones y decreciendo en 12.8% anual. Por segundo mes consecutivo se ha observado una reducción a tasa de dos dígitos.

    …el principal factor en este resultado, es la situación económica que viven los Estados Unidos de América, país donde reside la mayor parte de los salvadoreños que han emigrado. Los datos más recientes sobre esa economía muestran una profundización del desempleo hispano, el cual alcanzó una tasa de 12.7% en el mes de abril pasado, tasa que no se observaba desde 1983.

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    Family remittances earned in the first five months of 2009 amounted to U.S. $ 1.4 billion, showing an annual reduction of 10% over the same period last year…

    The decline in remittances is equivalent to U.S. $ 160.0 million. Only in May, the amount of remittances received was U.S. $ 308.2 million and decreased in 12.8% a year. For the second consecutive month there has been a reduction to two-digit rate.

    …the main factor in this result, the economic situation experienced by the United States of America, a country where the majority of Salvadorans who have emigrated. The most recent data on the economy show a deepening unemployment Hispanic which reached a rate of 12.7% in last April, a rate not seen since 1983.

While Honduras ended a bitter 2008 up 7.3 percent in remittances – a surplus of $2.7 million – in 2009, they have fallen 3.6 percent. Nicaragua, which just got its aid reduced because of election irregularities which jeopardized its standing with the US’s Millennium Challenge, has also seen their remittances decline by 8 percent.

Elsewhere, Mexico, the United States’ largest recipient of remittance money, is 8.7 percent behind schedule. In South America, Colombia, the only country on the continent with a sizable remittance, has declined by 3.6 percent.

One constant in every report, however, is the precarious nature of the US economy. The Hispanic unemployment average, as mentioned above, is over 12 percent, about three percent higher than the current national average of 8.9 percent. Jobs are hard to come by (ask me) and with declining prospects, the increase in right-wing violence and the likely calls for jobs for (white) Americans looming, the decreased remittances will force the governments of Central America to refashion, if they can (El Salvador here has the best shot, if only for the time being), their economies to not be so dependent on the aid of workers in the US – as it seems to be only the beginning.

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~ by Daniel on June 14, 2009.

3 Responses to “Central American remittances in this new economy”

  1. […] about Mexico Violence as of June 14, 2009 Sunday, June 14, 2009 Central American remittances in this new economy – totheroots.wordpress.com 06/14/2009 Remittances account for large amounts of Central […]

  2. […] See the original post:  Central American remittances in this new economy « To The Roots […]

  3. […] Central American remittances in this new economy « To The Roots […]

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