Caribbean & Central America - August 2018 (ISSN 1741-4458)

This article analyses recent trends in Central American migration, starting with a brief historical context and moving on to current developments. It considers geographical divisions, reasons for migrating, and growth in the overall migrant population. Finally, it considers implications of these current trends for Central American countries.

Although Central American immigration is a relatively new phenomenon, mostly dating from the late 1970s, its impact in the region and on foreign policy is quite significant. On the latter, it has come under renewed scrutiny since US President Donald Trump introduced his anti-immigrant rhetoric which targeted mostly Central Americans. The population of Central American migrants in the US has nearly doubled from 2000 to the present, but the trend has changed from 2009 onwards resulting from causes that stem from the impact of globalisation. Though migration has continued, over the past five years, it has done so at a declining rate. Overall growth in the migrant population in the US has been offset by large numbers of deportations. In the long run, continued decline will affect economic growth and prosperity in the region.

Historical context

Migration from Central America is a phenomenon of the late 20^th century, shaped by a combination of dynamics, mostly associated with political instability and poorly performing economies. In the 21^st century, migration has been shaped mostly by globalisation and transnational organised crime.

The region exhibits four different outmigration periods. The first migration wave predates the 1970s, which was shaped mostly by intra-regional mobility of Salvadorans moving to Guatemala, Hondurans to El Salvador and Nicaraguans to Costa Rica. A second wave, 1970s to 1990, is shaped by conflict-related dynamics, with people escaping from civil war, repression, and military rule during that period. A large outflow of people moving abroad came from El Salvador and Nicaragua. The third wave is the post-civil war transition and the gradual integration to the global economy. During this wave people migrated as an economic rationale, responding partly to a demand for foreign labour and economic necessity. The final and current wave is shaped by continued economic needs, external demands for foreign labour and insecurity resulting from the consolidation of transnational organised crime networks. Since 2009 the region has experienced major shifts associated with insecurity and violence.

Recent trends of Central American migration

As of 2017, Central American migrants had practically doubled from 2.6m people to 4.3m people within a span of 17 years. This number reflects patterns associated with flows from two main sub-regions. Recently, policymakers have distinguished two regions within Central America, the so-called Northern Triangle and the Southern region, which includes Nicaragua, Costa Rica, and Panama. Migration follows similar patterns linked to the rationales shaping the two sub-regions. The Northern Triangle is considered a region exceedingly affected by the ravages of violence associated with dense waves of transnational organised crime, particularly narco-trafficking, with out migration as a consequence. The second region is mostly defined by intra-regional migration networks with Costa Rica and Panama as labour importing countries for Nicaraguans working in domestic labour, security, transportation, and construction activities (Panama in particular for construction).

Drivers of migration from the Northern Triangle

Central American migration, particularly from the Northern Triangle countries, underwent changes in the post-2009 period, particularly related to increased insecurity coming from transnational organised networks. The slow economic recovery, the effect of the 2009 military coup in Honduras, as well as the expansion of youth gang violence and narcotrafficking networks in El Salvador and Guatemala had a broader and devastating effect on increasing emigration.

Waves of severe violence and insecurity associated with a prevailing environment of the operation of organised crime networks has informed decisions to emigrate. A larger number of people have sought to leave their home countries, including many applying for political asylum to escape persecution from narco-trafficking networks, gangs, or extortion rings. For example, in a 2014 study of Salvadorans, at least 20% stressed their interest to emigrate, particularly among those between the ages of 18 and 24, while 28% stressed that insecurity was the primary reason.

Insecurity is not accidental; the Northern Triangle is affected by violent homicides and extortions that intimidate people and push them out of their neighbourhoods and country. These homicides are not negligible in number and since the mid-2000s they have ranged between 38 and 40 a day for the three countries combined. They are accompanied by thousands of cases of extortion a year, and the intimidation and turf wars of an estimated 100,000 youth gangs (over half in El Salvador). In addition to insecurity, the economic factor is also central to this situation. Within a macroeconomic context, Central American economies are split between two poles of growth and wealth generation, with a third ‘missing middle’. First, the growth in the region has been driven by its dependence on the global economy, specifically on merchandise exports (predominantly agriculture and ‘maquilas’) and tourism (much of which comes from the diaspora itself). In terms of merchandise exports, fewer than 20 products account for more than 60% of exports by 50 top companies, which in turn employ only a fraction of the total labour force.

The second pole of growth is linked to migration. Remittances, nostalgic trade, diaspora tourism, and other services represent nearly 20% of GDP, on average. Remittances alone amounted to US$17bn in 2015, representing over 50% of household income in some 3.5m households in the region. Moreover, remittance recipient households have a total stock of savings of over US$3bn, the majority in informal, ‘under the mattress’ savings. This economic factor has contributed to inform people’s decision to migrate as the opportunity costs of migrating are not negligible.

In fact, amid these poles is a vast informal sector, comprised of more than two thirds of the labour force and the business sector together. It is euphemistic to talk about a private sector in Central America when most of these enterprises are one-person businesses that make less than two minimum wages. In turn, the low levels of income are the by-product of this economic model based on agriculture or other low-performing products that rely on unskilled, uneducated and underpaid labour. Therefore, the consequence of an obsolete growth model, accompanied by high rates of informal work, and the presence of drug cartels, extortion rings, and youth gangs, have triggered emigration.

In fact, research showed that migration is triggered by different factors, including insecurity. Looking at the municipal data level, in Honduras, a 1% increase in homicides drives migration by 120%, while increases in the size of economic informality boost migration by 12%. In Guatemala, a 1% increase in homicides drives migration by 100%, while increases in economic informality boost migration by 4%, and a decline in the human development index increases migration by 5%. In El Salvador, a 1% rise in homicides increase migration by 188% and economic informality by 27%. A similar pattern was found between the migration of minors and violence in the three countries. These trends have continued in 2016 and 2017. Surveys of migrants in 2016 and 2017 show that 20%-30% of Central American respondents cited insecurity as a reason for having left their country.

Another driver of migration is the US demand for foreign labour. Central American migrants meet an important demand in certain low-skill or labour-intensive sectors of the US economy, particularly construction, domestic work, food, and hospitality services. For example, one important growth factor in the US economy is in real estate and construction where only 4% of the labour force works. In that sector more than 25% of migrants work in construction and may represent at least one-third of workers in that industry. A similar case is of female domestic workers, about a third of which work in that sector in a US economy where less than 2% of the labour force works in that activity.

Migration of Nicaraguans

As with the Northern Triangle, Nicaraguan foreign labour migration is a by-product of the poor model of growth, one which precedes the 1980s period when thousands of Nicaraguans left escaping the civil war. Given the economic asymmetries of Nicaragua and Costa Rica (Costa Rica’s economy and minimum wages are at least five times that of Nicaragua) and a growing international demand for foreign labour in strategically important areas of other countries’ economies, there are more than 700,000 Nicaraguans living and working abroad, particularly in Costa Rica and the US. These migrants are sending over a billion dollars in remittances. Nearly half of those flows come from Nicaraguans in the US and the other half from Costa Rica.

These flows are only a part of a larger set of economic engagements that this community establishes with their homeland. Nicaraguan immigrants in the US not only send money home but also consume nostalgic products (beans, tortillas, cheese, etc.), call home, visit the country, or donate to charitable projects in their home community. In addition, remittance recipients have important stocks of savings and investments they make in their own initiatives.

However, despite these numbers, labour migration is not integrated into the government’s national development plans. Given the magnitude of informality and the extent of wealth generated through migration-related transnational activities, it is important to consider new development approaches.

A declining trend in Central American immigration to the US?

This increased outward migration has not directly translated into a dramatic increase of immigration to the US. Rather, during 2009-2017, migration growth to the US has been seeing mixed patterns. For the Northern Triangle the growth in the number of migrants for this period was 1.9%. Two main factors are, one, that enforcement efforts are reflected in more apprehensions and difficulties entering the US, especially with Mexican authorities detaining prospective migrants, and two, the steady pattern of deportations.

The table below compares people entering the US, the majority (89%) by crossing the US border, with the exception of Salvadorans where over half entered legally. In addition, many unaccompanied minors have sought to come to the US in numbers that are comparatively as large as, or larger than, the annual growth in the enrolment rate in secondary school within their home countries. In 2014 more than 50,000 unaccompanied minors had crossed the US border, and by the first half of 2018 the number was over 30,000.

The magnitude of this migration is measured by considering the number of people who are apprehended along the Mexico and US border as well as by those who eventually enter. Thus there are still large numbers of people who attempt to leave their countries but remain in transit trying to enter the US. Total migration outflows from these countries may be two or three times higher than the number of people crossing the US-Mexican border.

But while migration has continued, it is doing so at a declining rate (see Table 2 below). This decline is particularly noticeable because the pattern of deportations has remained steady. Eventually, because most migration to the US is irregular without legal authorisation to work, the continued numbers of deportations effectively reduce the number of people in the country. In turn, the replenishment ratio of migrants from the Northern Triangle declines because the number of entries is not too large. In fact the net number between new migrant entries and deportations, in 2017 is 67,000. If to this situation is added continued border enforcement and the termination of Temporary Protected Status (TPS) for more than 300,000 Central Americans from El Salvador and Honduras, the size of the migrant population will effectively decline further.

Implications of changes in Central American migration

Central American migration continues to be one of the largest outflows of people in the world. However, as the number declines, there are some concerns that may point to a deterioration of the economies and societies in Northern Triangle countries.

First, while migration has been shaped by a demand for foreign labour, economics and insecurity in the region, there seems to be a slowing rather than increasing migration pattern relative to the total number of migrants. The economic implications for the Northern Triangle countries point to declining family remittances in the short term, in turn affecting economic growth as they are a driving economic force. Under the current model of economic growth, economic opportunities will remain limited. Slowing migration not only affects the receipt of remittances but also long-term transnational engagement, including family ties.

Second, given the continued apprehensions and deportations, the problem of job generation and reintegration is not negligible. For example, deportations alone amount to half of the annual labour force growth in El Salvador. However, the skill set of those returned, many of whom have been at least 10 years out of their home country, is suited to the US labour market rather than the home country. More problematic is that current reintegration programmes are mostly focused on light workforce development support or on entrepreneurship in countries with highly informal economies. In turn, unemployment or informal work rates will increase, affecting growth and development.

Moreover, with declining migration it is difficult to find short-term practical solutions and mitigating strategies for US labour shortages because the demand for foreign labour in the US is not negligible. There are many activities in the US economy that are requiring low-skilled foreign workers.