The remittance industry

A recent article on the Upside Down World web site looks at immigration and remittances between El Salvador and the US. From the introduction to the article:
A rampant culture of impunity, combined with poverty and desperation after the war has led to constistantly high levels of migration. Strict immigration laws have punished those looking for livelihood improvements and deportation has spawned El Salvador's serious gang problem, further trapping the country in a cycle of violence, poverty, and... more immigration. An important lynch-pin in this cycle is remittances or remesas as they are known in Spanish: money sent home by working immigrants abroad.
While the article has some logical jumps when it comes to cause and effect, it does give you an overview of some of the role remittances play in El Salvador's economy.


Anonymous said…
Hi Tim,

I am a volunteer working with an organization in EL Salvador, The Landmine Survivors Network-El Salvador (headquartered in DC), and I have been following your blog since moving here. The work that I am doing with disabled individuals (both from landmines in the war and other disabilities, such as motor vehicles accidents) is a lens I have been using to understand the nuances of El Salvador. It has been really interesting reading your blog, because much of what you touch upon is reflected in the field work we do with survivors, as a real life example of how poverty, the remittance industry, and the recent rains have affected those individuals we are trying to empower. Keep up the good work! (The link to my blog is the following: I quoted your blog in my last entry.
El-Visitador said…
«Pizza Hut. By the end of the weekend, there is no more money.` All of this spending on imported goods and going to international companies»

Alimentos y Turismo SA de CV is actually a Salvadorean company that happens to pay a relatively small share of each sales dollar to Pizza Hut, a company owned by Yum! Brands of Louisville, Kentucky.

- * -

«Its not just the success of marketing campaigns making those in the Global South feel they should purchase Northern goods to demonstrate their affluence and gain social status»

Thank you for the clarification! And here I thought I liked a clean, air-conditioned place where the staff will merrilly sing a "Happy Birthday" to my kids while serving rather tasty food. Silly me!
Hodad said…
yes, 'Upside Down World' is a great blog-site
very informative on actual REAL issues
i quote them on MY blog occasionally
Anonymous said…
because of the deportation and xenophobic policies of the republicans in the usa, Even arena is sick of bush due to losing remesas sent to the country. each salvadoran that is deported means less income fo el salvador.
Anonymous said…
Remittances, El Salvador's Oil... Are the reserves drying out? When will they dry out? ...

I always found it peculiar this economy built upon mantaining people perpetually vacating El Salvador so they can sustain the economy from abroad. The sad thing is that even in the old days, in the very beginning of remittances, you'd see "entrepreneurs" capitalizing on being the middle-men through which these remittances reached their mark, expanding their sometimes already inflated fortunes, a trend that continues to this day, with the banks having been privatized, I do wonder how much $$$ did Cristiani and Calderon Sol make from all the remittances, and surely this is why all those foreign banks were so eager to purchase those banks and were willing to pay a pretty penny for them, but the cycle doesn't stop there, you see the upping of consumerism in this country as opposed to saving. It is very possible that you go to rural areas or whatever and a vast percentage of them will have tvs, washing machines (if they have the water in their households to use them!) acquired by remittances, so in the end the money goes back outside.

Well in any event, will deportation solve anything? Many of those deported simply go back, and even if they didn't, there are more willing to migrate from where they came from. And if the can't reach USA, they'll aim for Mexico, Canada, Costa Rica. I do think that USA for once should use its head and its clout to make things be set straight and force countries like this with ample history of ill-fund management, corruption, inefficiency to get their acts straight or: they'll stop the remittances flow, or aid, or some sort of pressure. But I guess, that the USA public is easy to apeace, as long as they are given a boogeyman and a bone to chew mirrors and white picket fences will keep them happy.

Oh, btw, Tim, seeing how your Blog is amply read, I'd encourage you to please keep the tabs on the Millenium Account and how it is spent, because I as an investor would be really, really worried what went on, if I saw trends like the following going on:

Siemens gana millonario contrato
ofreciendo los precios más altos

Secretaría de la Juventud se promociona a un costo inexplicable

Both articles are about how authorities love to squander money, either by purchasing stuff way, way above the market price, or foregoing calls for tenders. Of course, this would be just an appetizer of El Salvador, or the region's fame of corruption. Of course, often times the "developed" country is willing to look the other way if this means more cheap process goods, so it makes you wonder, if anything is certain: money makes the world go round, and because of this practice: Europe, brace yourself, but North Africa will vacate itself to invade you, North America, here comes the Latinos, make room for us!

Is there any room for foresight in international politics and consciousness in economics?