Excepting Cuba, Latin America Will Receive a Record Number of Remittances in 2023, Due to the Increase in Migration

The greatest amount of remittances to Latin America comes from the US, followed by Spain. (EFE/Lenin Nolly/Archive)

14ymedio bigger14ymedio, Madrid, November 16, 2023 —  The sending of remittances to Latin America will reach a record figure in 2023, with 155 billion dollars, 9.5% more than the previous year, according to estimates made by the Inter-American Development Bank (IDB), in a report published this Wednesday. The document does not include data from Cuba, where, despite the spectacular growth in emigration, the number is contracting, according to previous data from Havana Consulting Group.

The IDB report explains that the highest increase occurs in Central America, with 13.2% more than the previous year, especially driven by the sending of money to Nicaragua, which grew an impressive 59% compared to the previous year, with the majority coming from the United States. Last year, 73.5% of remittances to the Caribbean and Central America were sent from the US, while Spain appears as the second most important origin, although at a distant 11.4% of the total.

“The sustained growth of remittances reflects new intraregional migratory flows and the contribution that migrants make to their countries of origin,” the report says. However, migration data contrasts with data on the sending of remittances. Emigration increased by 8.6% in the Caribbean in the last year and only 1.17% in Central America. However, in the Caribbean the money flow grew by only 2.6%, the region with the smallest increase of the four analyzed.

Remittances from 2018 to 2023 calculated by the Inter-American Development Bank. (IDB)

At the end of the year, the Caribbean will have received – if the forecasts are met – 18.2 billion dollars in remittances. The largest increase comes from Haiti – consistent with the strong increase in emigrants – with 5.1%, followed by the Dominican Republic (2.7%), which receives the most money, exceeding 10.125 billion dollars. On the other end, Trinidad and Tobago, which in 2022 had increased significantly, moderated in 2023 and increased by just 0.7%.

The second region – in this case a country – in growth of remittances is Mexico, where an increase of 9.8% is expected, although by volume it is the one that receives significantly the most money, with 62.247 billion dollars, almost all of it from the United States. The amount represents a historical high for the North American country.

The last block is South America, where this year the figure will increase, although only by 7.9%. Here, Argentina is experiencing the greatest growth (26.3%), according to the IDB analysis due to the “strong devaluation faced by that country’s currency and which forces migrants to send more resources to support their families.” Despite this, it is not among the country that receives the most dollars by quantity, with barely 1.5 billion dollars, compared to the 10.2 that arrive in Colombia – which isfirst by volume – where the total rose 8.2% compared to 2022.

In this area, it is worth highlighting the lack of data from the country with the most migration on the continent, Venezuela, which has more than 7 million expatriates. To estimate the receipt of money from this country, data from the consulting firm Ecoanalítico was used, which estimates the amount at 2.5 billion dollars.

It is the same operation that must be done with Cuba, which, being one of the countries where migration has increased the most in relation to its population in recent years, with some 323,000 departures to the United States were registered in 2022 and the trend continues in 2023. But remittances have decreased due to a set of factors. Among them is a change in the migration model, which indicates that families increasingly tend to leave the Island with all their members, while before, only one member used to leave and send money to those who stayed.

Another possible explanation is in the payment of the debt that Cuban migrants acquire with their family abroad, often the lender of the money to make the trip, which has become more expensive to a level never seen before for the flight between the Island and Nicaragua, where the majority then continue along the “route of the volcanos” towards the United States. Many Cubans spend the first months of their exile returning this amount to those who advanced it for them.

Growth in remittances from 2018 to 2023 calculated by the Inter-American Development Bank. (IDB)

Finally, the decline in the population on the Island itself implies that the volume of money decreases. As Cubans leave their country, sending remittances is less necessary.

These ideas would explain that between 2019 and 2023, remittances fell by 45%, according to a report published in September by the organization Cuba Siglo 21, signed by economist Emilio Morales. In that same period, money sending according to the IDB report grew by 65% ​​in the rest of the continent.

According to Morales’ document, only 9.18 billion dollars arrived in Cuba in the four years from 2019 to 2022, which the author interpreted as a change of intention of the diaspora, according to which the objective is to remove relatives from their country, not helping them while they remain there.

In total, during the last three decades, the Island has received a total of 52.252 billion dollars in remittances and another 50 billion in consumer goods, indicated the report, which accused Gaesa, the state monopoly of the military that manages much of the economy, of “undermining” that island’s economy, and spoke to the potential of Cubans living abroad when it comes to rebuilding the country in the future.


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