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EL SALVADOR: ‘Many Swapped Farming for (Shrinking) Remittances’

CHIRILAGUA, El Salvador, Mar 11 2009 (IPS) - The global economic crisis has begun to be felt in this Salvadoran town on the Pacific coast, where remittances sent home by family members working in the United States have begun to shrink.

Like in other parts of the country, remittances in Chirilagua – a town of 20,000, with a similar number of people living in Los Angeles, Houston, New York and other U.S. cities – have become not only a main source of income but also a source of major cultural change.

The town, once inhabited mainly by farmers who used horses to work in the fields and wore cowboy hats and boots, is now full of youngsters riding ride around on bicycles and wearing baseball caps, bermuda shorts and sandals, while waiting for the next monthly transfer from their relatives abroad.

“Nearly everyone receives remittances,” which have brought about “profound” cultural changes, said Mayor José Méndez, who has governed Chirilagua – located 175 km east of the capital – for five consecutive terms since 1994.

“Many people have swapped farming for remittances,” the loquacious 71-year-old mayor told IPS.

But things have begun to change, say observers, because remittances, which have become a lifeline for the local economy, shrank in 2008 for the first time since records on the phenomenon began to be kept in 1995.

Sociologist Juan José García, an expert on migration and remittances, told IPS that although global remittance flows grew 2.5 percent last year with respect to 2007, the slowdown was significant when compared to 17 percent growth in 2004.

“A crisis lies ahead: the tendency is for remittances to substantially decline in 2009 and 2010,” said García.

The Central Reserve Bank (BCR) reported that annual remittances grew threefold from 1998 to 2008, to 3.78 billion dollars a year, making them the country’s main source of foreign exchange.

Last year’s remittances represented 17 percent of GDP in this country of 5.7 million people.

Ninety percent of the 2.9 million Salvadorans living abroad are in the United States, where most of them live and work as undocumented immigrants.

Official figures indicate that 381,700 families, accounting for nearly 27 percent of the population, receive transfers from abroad. The money mainly goes towards food, clothing and paying the monthly power, phone and water bills.

The BCR reported that remittances declined last year by 2.1 to 6.6 percent a month from August, when the global economic crisis broke out, to November.

One of the victims of the recession spreading outwards from the United States is María Hernández, who is now scraping by selling tortillas in the central square of Chirilagua.

Her two children, Jamileth and Antonio, left for the southeastern U.S. state of Virginia four and seven years ago, respectively. But since October, they are no longer sending her the 400 to 500 dollars a month that she used to receive, because they are now only working part-time.

“The flow of remittances has stopped. But fortunately I am used to working, as I have done since the age of seven,” says the 55-year-old single mother, while placing a tortilla on a hot plate, a Mother’s Day gift from her kids last May.

Hernández told IPS that she is now having trouble “paying the 100 dollars a month for my house, since the sales of tortillas only stretch far enough to buy food” and pay the bills.

According to an analysis of the latest U.S. Census Bureau data by the Pew Hispanic Centre, a Pew Research Centre project, unemployment among foreign-born Hispanics in the United States rose from 5.1 to eight percent in 2008.

And media reports put the unemployment rate among foreign-born Latinos at 12.4 percent in the state of California – the highest rate in 40 years. A majority of Salvadoran migrants live in Los Angeles county and the rest of southern California, where they generally work in construction, services, retail and tourism – the industries that have felt the strongest impact of the recession.

Statistics from the Dirección General de Migración y Extranjería, El Salvador’s immigration office, show that more than 20,000 Salvadorans were deported from the United States in 2008, as a result of tighter controls, said Gilma Pérez, coordinator of the migrants programme at the Central American University’s Human Rights Institute.

Pérez also said the crackdown on illegal migrants and the profound crisis affecting the United States have temporarily curbed emigration to that country, with the number of Salvadorans attempting the journey shrinking from around 700 to 400 a day.

In Chirilagua, meanwhile, some 100 people show up every day to pick up their money transfers of between 50 and 200 dollars from the La Guadalupana savings and credit cooperative, said Abisahí Romero, who works at the office.

The cooperative, which has been operating for 10 years, is now associated with the U.S.-based Western Union, a global leader in money transfer services.

But in the last few months, Romero has noticed “a major drop in the number of people receiving remittances, and in the amounts that are being sent.”

In fact, he said, there have been “at least 10 cases” in the office so far this year in which families from Chirilagua and the surrounding areas have actually wired money to their relatives in the United States, to help them weather the recession there.

Some of the families have sent up to 1,000 dollars to the U.S. – savings built up here with the remittances sent by their loved ones abroad.

Rosalía Márquez, who owns a beauty salon in Chirilagua, said she has seen her revenues drop 60 percent in the last six months.

“Revenues have really shrunk; if there are no remittances, there is no work,” complained the cosmetologist. She was forced to lay off her two employees, and says many of her clients have told her they are no longer receiving remittances.

In the nearby town of Intipuca, where a huge part of the population emigrated to the United States, fancy U.S.-style houses, luxury cars and travel agencies coexist alongside youth violence and poverty, and the local hero is Sifredo Chávez, the first Intipucan to make the journey to the United States in the late 1960s, who later helped family members and friends move there. A statue of Sifredo stands in the town’s central square.

José Rodríguez, a 72-year-old peasant farmer who lives alone now that his entire family has left the country, laments that the remittances have become “scarce” but says he has not lost hope that things will change in El Salvador so that people will have opportunities and will no longer have to move abroad – a reference to next Sunday’s presidential elections.

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