Migrant Remittances to Central America and Options for Development

Cover of Migration Taskforce Report

Remittances are the most visible economic activity among migrants, and these person-to-person private financial flows, directed to families back at home, bring many benefits. Largely due to an obsolete model of economic growth that does not deliver wealth within their societies, people have migrated in order take care of themselves and their families.

A new report, written by Manuel Orozco, Director of the Migration, Remittances, and Development program at the Inter-American Dialogue, with the North and Central American Task Force on Migration, recommends leveraging remittances through financial access, education, and investment in order to strengthen economic developments and reduce the need for Central Americans to migrate in the first place.

Specifically, the report recommends formalizing the savings of remittance recipients that can then be mobilized for credit in the local economy and can contribute to both the informal sector, and new strategic sectors. Overall, the report implores for more attention on the informal sector, especially considering that it comprises over two-thirds of the labor force and business sector.

The report begins by demonstrating that generally, people who have considered migrating reported economic hardship in their home country. Next, it illustrates the staggering growth of remittances since 2016, and Central America's dependence on them as a total of their GDP. The report then discusses the effects of the ongoing economic downturn on remittances, and how countries can take full advantage of the money they do get, so that in the long term, individuals don't feel financial pressure to migrate.


  1. Increase its competitive capacity across informal and formal businesses.
  2. Formally employ its labor force abroad.
  3. Use migrant foreign savings (savings increased from remittance recipient’s income) as a financing base.
  4. Promote a guest worker program to have a positive effect in the increase of remittances.



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