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Briefing Paper: Remittances and Repatriation in Central America

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Briefing Paper: Remittances and Repatriation in Central America Number 18, June 2012 briefing paper Exchanging People for Money: Bread for the World Institute Remittances and Repatriation in Central America www.bread.org Abstract Immigrants from Guatemala, El Sal- vador, and Honduras sent home more than $10 billion in remittances in 2011— almost all of it from the United States. Re- mittances comprised 17 percent of GDP in Honduras, 16 percent in El Salvador, and 10 percent in Guatemala and they dwarf both foreign direct investment and overseas development assistance. Remit- tances reduce poverty and help millions of families that receive them obtain food, clothing, education, housing, and health care, but they can also create provides dependence policy analysis on hunger and strategies to end it. REUTERS/Eliana Aponte on the diaspora. Their greatest potential— Thefueling Institute productive educates investment its network, that generopinion- leaders, policy makers and the public about Key Points ates jobs and income and reduces immi- hunger in the United States and abroad. • Part of the $10 billion sent annually in remittances to Central America gration pressure—is often untapped. could be harnessed to support productive projects in migrant-sending In addition to the flow of money back communities, but the current lack of a policy framework and technical to Central America, in recent years the know-how are barriers. U.S. development agencies are well positioned to number of immigrants returning from facilitate the productive uses of remittances at both the policy and pro- gram levels in cooperation with host governments and the private sector. the United States to their home countries has increased. During fiscal year 2011, the by• According Andrew Wainer to its own cost estimates, the Department of Homeland Secu- rity (DHS) spent approximately $1 billion apprehending, detaining, and United States deported a record 396,906 deporting 76,000 Central Americans in 2010. Surveys indicate that, part- unauthorized immigrants, including ly because of the lack of long-term reintegration assistance, 43 percent more than 76,000 Central Americans. of deportees intend to return to the United States within a year. U.S. and Central American governments are un- Central American observers state that the percentage of return migrants prepared for these returned migrants. is larger. U.S. development policies in Central America should include Many deportees end up re-migrating to programs to help returned migrants support themselves and contribute the United States because of the lack of to economic development in their home countries. opportunities in their native countries. Andrew Wainer is the senior immigration policy analyst for Bread for the World Institute. Introduction: Figure 1 “The Northern Triangle” Crossroads of the Western Hemisphere Belize Mexico The movement of people Guatemala and money between Central and Honduras North America dates back at least to the 12th cen- tury when maritime Mayan traders transferred obsidian, 1 cotton, and slaves along the Gulf Coast of Mexico. Dur- Nicaragua ing the 16th century, the Spanish Conquest transformed El Salvador the isthmus into a key link in a colonial empire stretching from Argentina to California. In the early 20th century, the Panama Canal made Central America the primary ship- authorization. According ping link between the Pacific and Atlantic oceans. Today to the Pew Hispanic Center, Costa Rica Central America remains a corridor for the movement of there were 2.4 million North- people and goods—both legal and illegal. For nations like ern Triangle immigrants in Panama Panama, this geography contributes to a booming economy the United States in 2009, compris- and improving socioeconomic indicators. Five percent of ing about 6 percent of the total U.S. for- all global trade transits the canal, and Panama has one of eign-born population of 38 million.5 Other the fastest growing economies in the world. In 2008, for estimates place the number of Northern Triangle example, in the midst of a global recession, the Panama- immigrants at more than 3 million6 (see Table 1). nian economy grew by almost 11 percent.2 Between 2006 Immigrants from this region are more likely than the av- and 2010, Panama reduced its poverty rate by 10 percent- erage U.S. immigrant to be unauthorized. Thus, they are age points.3 overrepresented among unauthorized immigrants, compris- But in the “Northern Triangle”4 nations of Guatemala, ing 15 percent of the total in 2011 (see Table 2).7 Despite Honduras, and El Salvador, geography has been a mixed the Northern Triangle’s relatively small population (27 mil- blessing and made them the target of centuries of foreign lion), there are more unauthorized immigrants from this intervention (see Figure 1). Unlike Panama and Costa Rica, region than from China and India combined, which have economic progress in the Northern Triangle has been un- a combined population of more than 2.5 billion.8 Starting even and poverty rates remain high. To escape poverty, around 2006, migration from the Northern Triangle began millions of Central Americans have taken advantage of its proximity to the world’s largest economy to seek oppor- Table 1 Northern Triangle Immigrants in the U.S., 20091 tunity. These migrations have helped Central Americans feed, clothe, and educate their families. But it’s also created Total number of Expatriates as a immigrants percentage of native a dependency on the diaspora. in the U.S. population The Source of Unauthorized Central American Migration El Salvador 1,150,000 19% Unlike people in Africa or South Asia, Central Ameri- Guatemala 799,000 6% cans who are unable to meet their material wants at home Honduras 468,000 6% have the option of migrating to the United States. In recent decades, they have done so by the millions, usually without Total/Average 2,417,000 10% Table 2 Unauthorized Northern Triangle Immigrants in the U.S., 2011 Number of Unauthorized as Percentage of Percentage change Ranking as source unauthorized percentage of total total unauthorized in unauthorized of unauthorized immigrants1 immigrant population2 population3 population 2000-20114 immigration to the U.S. El Salvador 660,000 46% 6% 55% 2nd Guatemala 520,000 60% 5% 82% 3rd Honduras 380,000 68% 4% 132% 4th Total/Average 1,560,000 58% 15% 90% ----- 2 Briefing Paper, June 2012 to drop, falling sharply during the U.S. status than they had at home, Central Figure 2 San Marcos, Guatemala recession, but migration flows have American immigrants experience more stabilized since 2009. Over the past de- poverty than the overall U.S. popula- cade, immigrants from this region were tion. In 2009, about a quarter of Hon- among the fastest-growing foreign-born duran and Guatemalan immigrants Tacaná populations in the United States — in- to the United States lived below the creasing by 90 percent between 2000 poverty line. Salvadoran immigrants, and 2011.9 who are more likely to have authorized San Marcos Northern Triangle immigration has status, had an 18 percent poverty rate. a variety of causes but is driven primar- All three rates were higher than the ily by the combination of immigrants’ general U.S. poverty rate, which was 14 inability to satisfy their economic as- percent (see Table 3).10 pirations in their countries of origin, Guatemala and conversely, labor opportunities in the United States. The jobs are mostly Part One: Remittances in construction, maintenance, food Weathering Hurricane Stan from Abroad service, and agriculture. Migration is also to some degree self-sustaining—as In October 2005 Hurricane Stan hit mountains immigrants become established in the Guatemala for days, pouring 20 inches and volcanos.12 United States, they can facilitate mi- of rain, flooding rivers, and knocking The indigenous gration by family members and others out roads and bridges.11 Entire villag- village of Panabaj, near from their home communities. es were buried under torrents of mud Lake Atitlán, was so com- In spite of a higher socioeconomic and rock that fell down the slopes of pletely inundated that relief efforts were ended several days after Table 3 Socioeconomic Status of Northern Triangle Immigrants, 2009 the storm—despite the fact that hun- dreds of residents were still missing. Median individual Percentage living Percentage without The mayor declared the village a mass income1 below poverty-line2 high school degree3 13 grave. The department of San Mar- El Salvador $19,715 19% 53% cos, which borders Mexico in the coun- try’s southwest, was among the most Guatemala $17,497 26% 55% damaged by Stan (see Figure 2). Even Honduras $16,723 27% 49% before the storm, San Marcos was one of the most impoverished regions of the Total U.S. $28,900 14% 13% country: 85 percent of the population lived in poverty, while 62 percent lived in extreme poverty.14 San Marcos also suffered from economic inequality: 47 percent of the department’s land was held by 1 percent of the population, while smallholder producers possessed only 3 percent of the department’s total land.15 These economic realities meant that emigration was a longstanding tradition in San Marcos. So when the storm hit, San Marcos native Isaías had already been living in the United States for three months. While he was in the States, Isaías learned that his father had Andrew Wainer Andrew been killed in a landslide during Stan. Isaías immigrated twice to the United States to support his family in the department of San Marcos, He was desperate to return home, Guatemala. He worked as a greens-keeper on a golf course in Florida where he learned about large irrigation systems, a skill he has been unable to transfer to his own agricultural production because of but weighing his economic prospects a lack of local technology and know-how. in the United States and in Guatemala, www.bread.org Bread for the World Institute 3 Isaías continued to work as a greens-keeper at a Florida golf have drawbacks.
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