Caribbean & Central America - December 2023

The value of remittances sent to Central America has increased massively in recent years, with the most dramatic spike in Nicaragua, according to a report from the Inter-American Dialogue, a Washington-headquartered think tank published 1 November.

In El Salvador, the value of remittances increased from US$5.4bn in 2018 to US$8.2bn so far in 2023, while in Guatemala it increased from US$9.5bn to US$20.3bn for the period. Honduras saw an increase from US$4.8bn to US$9.4bn for the period, while Nicaragua recorded an increase from US$1.5bn to US$4.7bn, the largest increase in percentage terms. Both Costa Rica and Panama receive comparatively fewer remittances, and the amount has remained relatively stable over the period.

This pattern is repeated in terms of year-on-year rises from 2022-2023. El Salvador saw an increase of 4%, Guatemala 10%, and Honduras 11%, whereas remittances to Nicaragua grew by a massive 40% year-on-year, following an even larger 50% increase from 2021-2022. This means that remittances now represent 29% of GDP, the highest figure of any country in the Western Hemisphere, said Manuel Orozco, director of the Migration, Remittances, and Development programme at the Inter-American Dialogue, in an interview with the LatinNews podcast released 24 October. This has been driven by a surge in Nicaraguans emigrating, particularly to the US, which saw an increase in the number of people sending remittances to Nicaragua from 259,942 in 2018 to 797,449 in 2023. There were also significant increases in transfers from Spain, up from 45,246 to 73,333 for the period, and Costa Rica, which saw an increase from 271,169 to 370,175. In total, the number of people sending remittances to Nicaragua almost doubled from 699,274 in 2018 to 1.373m in 2023.

Remittances benefit the government of President Daniel Ortega at a time of deepening isolation from the US and its allies due to its increasing authoritarianism in recent years. While sanctions imposed by Washington have attempted to target Ortega, his wife and vice-president Rosario Murillo, and their inner circle, many Nicaraguans have left the country in the face of mounting political persecution and limited economic opportunities.

Costa Rica

In previous years neighbouring Costa Rica was a popular choice, but tighter asylum rules imposed by President Rodrigo Chaves in December 2022 encouraged many Nicaraguans to make the longer journey north to the US.