Central American Migrant Remittances Breaking Records, Beats Foreign Investment

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Central Americans are sending home billions of dollars, giving poor governments there little incentive to improve social safety nets for the working class leaving for the U.S.

In 2017, El Salvador brought in a record $792 million from foreign direct investment, according to the United Nations Conference on Trade and Development, or UNCTAD. It is unclear if that includes remittances from their people living abroad. If it did, or if it did not it doesn’t matter here. El Salvadoreans sent home a record breaking $534.2 million as of December 2018, according to that country’s central bank.

Guatemala FDI was $1.14 billion in 2017. That’s chump change compared to what their foreign workers are sending home to family. Last year, they sent a record breaking $9.3 billion in remittances, according to the Bank of Guatemala.

And then there’s Honduras, the next group of Central American countries populating migrant caravans heading to the U.S. border in numbers never before seen.

FDI to Honduras was $1.18 billion in 2017, according to UNCTAD. Remittances were $427 million in December after hitting a record 12-month high of $456 million in May.

The dependence of these small nations on migrants to sustain the livelihood of some of the population has led these countries to do little to stop an ever increasing outflow from Central America. {snip}

According to the World Bank, remittances accounted for 21.1% of El Salvador’s GDP, 19.9% of Honduras’ GDP, and 12.1% of Guatemala’s. By comparison, remittances are only 3% of Mexico’s GDP and 0.2% of Brazil’s.

Mexico’s trade relationship with the U.S. helps. {snip}

Mexico’s remittances are worth more than Pemex oil and gas sales.

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