Wednesday, February 1, 2023

Remittances help reduce poverty and inflation in Latin America

MIAMI ( Associated Press) – Sarah Salgado is a single mother of three young children. He left Nicaragua almost in secret, and since arriving in the United States three years ago, he has sent money, clothing, medicine and food to his parents and siblings in his country of origin.

She has been doing this since she got her first job as a helper in a restaurant and continues to do so even though she already has her own business, her income has been affected by inflation.

“It is not easy to command, but when it is done with love, it is not a sacrifice,” Salgado, 35, told The Associated Press. “Life is hard here, but we have the freedom to work, change jobs or do several things at the same time,” the woman said in a telephone interview from her mobile home in Pahokee, Florida, about 145 kilometers northwest of Miami .

Salgado is an example of what the millions of Latin American immigrants living in the United States do to help support their families. Remittances sent from abroad are important to Latin America and represent an additional source of income for low- and middle-income households, as they contribute to meeting basic needs, reducing poverty, improving nutrition, and access to health and education. Contribute to reach.

In the first nine months of 2022 – the latest information available regarding the same period last year – remittances to the region grew by 9.3% to nearly $142 billion, According to the World Bank (WB), the highest growth worldwide compared to other regions. The largest increase, 45%, occurred in Nicaragua, followed by Guatemala, which received a 20% increase in remittances; Mexico, with 15% and Colombia, with 9%.

However, this increase will be less than the 26% recorded for all of 2021, a record that was not seen for a decade. For next year, the World Bank predicts that remittance growth will slow to 4.7% in the second half of the year, mainly due to a decline in US economic activity.,

“Remittances are of vital importance in maintaining consumption in receiving countries,” Jose Manuel Salazar-Zirinch, executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), told the Associated Press. “Its development becomes fundamentally relevant, especially in those countries in the region that are most dependent on this flow,” he said. As an example, he cited Central America and Haiti, which have the lowest per capita incomes.

According to ECLAC, in some low- and middle-income countries, remittance flows exceed the amount received from foreign direct investment and official development assistance. They represent about 24% of the gross domestic product (GDP) in Haiti and about 20% in El Salvador and Honduras.

They are the biggest contributor to GDP in Guatemala, about 20%, after exports and foreign investment, said Guillermo Díaz, a researcher at Rafael Landívar University. Families there get between $550 and $600 a month. For some six million households – out of a total of 17 million who receive remittances – that money is their main source of income.

In Mexico, 25% of households receive remittances, ie one in four. In Nicaragua, half, according to the Inter-American Dialogue, a Washington research center. Remittances from abroad account for 60% of the income of receiving households and, on average, 15% of the income of senders.

Salgado fled his country in fear for his life and crossed the US-Mexico border in 2019 with his three children, aged seven, five and one. Upon his arrival in Florida, he requested asylum and obtained a work permit. They worked in restaurants and supermarkets and were left on the street during the pandemic until they offered them accommodation in a house warehouse with one bed for four. She is now a partner in a credit counseling company and sells jewelry online.

Since she lives in a moving house, she pays less rent and this is enough to send $50 to $200 to her relatives every week or between 15 days, depending on their needs.

With that money, his parents and three siblings pay for electricity and water and buy food. His 70-year-old mother is ill with Parkinson’s; His father, 72, is a carpenter and barely has a job. One of his brothers drives a taxi, the other does not work.

“People are bankrupt, prices are high, there’s no work, they survive,” he said, referring to his relatives in Nicaragua.

Typically, immigrants who send remittances from the United States are people who earn about $30,000 a year and the amount of remittance varies according to their cost of living, said Manuel Orozco, director of Inter’s Migration, Remittance and Development Program. Explained – American Dialogue…

In the case of Mexicans and Central Americans, the majority of money remitters are men and women age 39 or younger who work in construction and the service sector, in restaurants or cleaning homes. South Americans who help their families with money, on the other hand, tend to be somewhat older and have more qualified high-income jobs.

Sonia Arias, 57, is one of the South Americans who sends remittances to her family. She has been living in Charlotte, North Carolina, for a year and a half, from where she regularly sends money to her native Ecuador to support her son. She works two jobs: one as a take-out bagger and the other, in the afternoons and evenings, as an assistant to a senior citizen.

On average, she sends about $1,000 a month to cover living expenses for her 17-year-old son, Kenneth, who lives in Quito. The money sent by Arias pays a monthly pension for the school where the teen studies, bills for electricity, water, telephone and transport and accommodation.

“Ecuadorians believe that the United States is a paradise to live and work in, but the reality is that one comes here to be sacrificed, to suffer,” she reflected in a conversation with the Associated Press. “Every day you have to get up early and spend a lot of time on the bus and train to go to work. There is no time for anything other than work, ”added the woman living legally in the United States.

To prevent his son from spending money without control, the remittance is received by his cousin, who manages the expenses and is in charge of making the payments. The woman plans to take her son to the United States through regular immigration later.

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Associated Press reporter Gonzalo Solano from Quito; And Sonia Perez contributed to this note from Guatemala City.

Nation World News Desk
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