Migration & Development in Central America: Perspectives for the Alliance for Prosperity

On January 13th the Inter-American Dialogue hosted a discussion on migration and development in Central America in light of the recent congressional funding approval of the Alliance for Prosperity. As a point of departure for the discussion, Manuel Orozco and Julia Yansura presented the main findings of their newly released book, Centroamérica en la mira: La migración en su relación con el desarrollo y las oportunidades para el cambio (Central America in Focus: The Relationship of Migration to Development and Opportunities for Change; See English summary report here.), the product of three years of fieldwork in the region. The presentation was followed by a panel discussion with Ambassador Francisco Altschul of Embassy of El Salvador, Armando Trull of WAMU, and Mark Lopes, United States Executive Director at the Inter-American Development Bank.

Manuel Orozco began by noting that violence and emigration in Central America have deep-rooted structural causes that pre-date the recent increase in media attention. Violence is nothing new in Central America, and has affected the region in various forms for the last five decades. Moreover, the region’s economic model, which is still based on the Washington Consensus of the early 1990s, is “unsustainable,” Orozco argued. This economic model capitalizes on unskilled, informal and poorly paid labor in the agricultural sector, leading to low productivity and a situation in which countries’ main “competitive advantage” is a cheap, informal workforce.  

[caption id="attachment_46056" align="alignright" width="500"]IMG_5323 Photo by Ben Raderstorf / Inter-American Dialogue[/caption]

While lack of economic opportunity and high levels of violence have caused millions of Central Americans to emigrate, migration is not taken as seriously as it needs to be, Orozco argued. Despite the large numbers of Central Americans leaving their home countries and the powerful economic impacts of their mobility, policy responses have lagged. 

Migration presents important economic opportunities for the region, Orozco noted, and should be taken into greater consideration for economic development plans. Remittances, while important on their own, can be further leveraged through financial inclusion and bankarization. The nostalgia trade is also an important area. Recent surveys show that migrants spend thousands of dollars a year on products from their home countries, creating markets for diverse, high-quality exports.  Concluding his remarks, Orozco called for a focus on developing human capital, strengthening the rule of law, and boosting innovation and investment.

Picking up on these themes, Ambassador Francisco Altschul recognized that the Alliance for Prosperity represents a fundamental shift because it not only focuses on security, but also addresses the economic development issues revealed in Orozco and Yansura’s new book, including human capital development. While the U.S. Congress recently approved US$ 750 million for the plan, the Ambassador noted that the three Northern Triangle countries have allocated significant funds from their national budgets to contribute, signaling a strong local commitment. 

Mark Lopes from the Inter-American Development Bank agreed, noting that despite the challenges, he is optimistic about the plan. He emphasized that the Alliance of Prosperity is a long term plan, and continuity, transparency and institutional memory will be essential for its success.  Lopes explained that most of the current leaders handling the plan will most likely not be present in 20 years, and therefore is important to keep a clear track of what is going on now in order to support future work.

Adding to the debate, Armando Trull presented a more critical take on the Alliance for Prosperity. Trull shared some of his recent findings from interviews in Central America and with Central American immigrants living in the Washington, DC metropolitan area. There is widespread distrust of public officials in Central America, particularly in light of recent corruption cases in the region, he pointed out. Therefore, one of the most important tasks ahead in the context of the Alliance for Prosperity is to ensure that funds will reach those who need them the most.  

The panel was subsequently opened to questions and comments.  There was lively discussion over the subject of development and solutions, including a debate over entrepreneurship and informal businesses and the significance of the Alliance for Prosperity vis a vis previous development strategies. Michael Shifter of the Inter-American Dialogue concluded the event, noting that countries in the region face tremendous challenges, and that commitment, persistence and transparency will be needed to find long-term solutions.

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