Nicaraguan migrants support 20% of their country’s economy

The migrants Nicaraguans, who represent 10% of its population of Nicaraguaare supporting 20% ​​of the economy of the Central American country, according to the study “Growth without development” of the Center for Transdisciplinary Studies of Central America (Cetcam) released this Saturday.

The study, prepared and presented in San José by the Nicaraguan exile and Master in Economics Marco Aurelio Peña, warns that “the massive emigration of Nicaraguans who seek to position themselves in the labor markets of the rest of the world becomes a drain of brains and muscles which to date has not been able to be corrected”.

”That people emigrate to work, obtain income and send a fraction of it to their relatives guided by their survival instinct and spirit of improvement, through family cooperation, reveals the incompetence of the different Latin American governments in terms of economic policy for not stopping this situation”explains the expert in the study.

For Peña, “in an autocratic government like Nicaragua’s, where the economic authorities announce the increase in monetary remittances as an ‘achievement’, the passivity on the phenomenon seems to be deliberate in order to perpetuate their own political system and the functioning defective of an economy highly dependent on foreign cooperation and current transfers”.

NICARAGUA REACHED A RECORD IN REMITTANCES

Nicaragua captured a new record of 3,224.9 million dollars in remittances in 2022, 50.2% more than a year earlier, which represented 20.6% of gross domestic product (GDP)according to data from Nicaraguan Central Bank.

”The massive emigration of labor force and human talent, what it does is decapitalize a country from the point of view of human capital, which is when we include human talent, such as experience, profession, abilities and skills, modernization, qualifications (…), everything that gives added value to the person in the labor market”the economist told EFE.

For Peña, Nicaragua should have taken advantage of “its demographic bonus a while ago, that is, a stage in population growth in which the majority of the population is young, is at its productive peak, in an age range between 16 to 40 years, and what is happening is the opposite”.

“Many people have left Nicaragua, many entrepreneurial people, university students, professionals and technicians with much more accumulated knowledge than previous generations”noticed.

The drain of talent and muscle affects the growth of a country, “because they are people who are not being counted on to carry out a growth and development strategy with the country’s own factors and with less dependence on foreign cooperation and remittances “, he pointed.

“But for authoritarian regimes it is very convenient because migrants send remittances to their families and with these remittances they consume and pay taxes, and the dollars increase international reserves”he added.

DEPENDING ON THIRD COUNTRIES

Likewise, Peña said that the sustainability of remittances depends on the economic situation of other countries.

“So if you wish evil on USAthe Nicaraguans who are in the United States would do badly and, therefore, it would do badly for Nicaragua”he mused.

Of the total remittances received between January and July 2023, 82.2% of the flows came from the United States (2,157 million dollars), which registered a year-on-year growth of 74%, according to official data.

Nicaragua projects to exceed 4,000 million dollars in remittances this year, which would be a new record.

Until last July, Nicaraguans received 2,623.9 million dollars in family remittances, 57.1% more than in the same period of 2022, mainly driven by those from the United States, according to data from the Central Bank of Nicaragua.

“In short, the Nicaraguan migrant population sustains the national economy since it contributes a fifth of the national income”held.

(With information from EFE)