The Remittance Industry: El Salvador's Post-War Struggle

Written by Mneesha Gellman and Josh Dankoff

Thursday, 05 June 2008 02:37

The 12 year civil war in El Salvador, officially from 1980-1992, facilitated an exodus from the country. As part of its cold-war foreign policy, the US played a key role in prolonging the war by supporting the Salvadoran military throughout the 1980s during widespread persecution and execution of peasants, leftists, and anyone agitating for social change (or even being suspected of it). A rampant culture of impunity, combined with poverty and desperation after the war has led to constistantly high levels of migration. Strict immigration laws have punished those looking for livelihood improvements and deportation has spawned El Salvador's serious gang problem, further trapping the country in a cycle of violence, poverty, and... more immigration. An important lynch-pin in this cycle is remittances or remesas as they are known in Spanish: money sent home by working immigrants abroad.

El Salvador's Civil War Legacy

Leonora Hernandez squints through the fog bank to keep us on the winding trail over the mountains in Morazán Department, located in the far northeast corner of El Salvador. A guide with Prodetour, a community-based tourism association, Leonora is leading us on a hike through El Salvador`s civil war history and at the same time, giving us her assessment of its future. We make our way from a former FMLN (or Frente Farabundo Martí para la Liberación Nacional, the resistance group and now opposition political party) encampment to the village of El Mozote, a remote village where more than 800 people were massacred by the US-supported El Salvadoran Ejercito Nacional, or National Army in 1981 for being suspected FMLN sympathizers; a touching memorial now marks the spot. Leonora, born in 1972, grew up in a nearby village, and shares her own story.

Leonora holds a Polaroid of herself as a 15 year old FMLN guerrilla.

"I left school after 6th grade, at age 15, to join the FMLN. I didn't know what else to do, people were hungry, I was hungry. I hugged my mom before I headed deep into the mountains and said, 'see you soon.' I didn't see her again for five years." Leonora trained in communications with the FMLN, learned to make radio broadcasts, and eventually worked with Radio Venceremos, the clandestine radio program that kept civilians in touch with guerrilla actions and intentions. She believed that the revolution could make things better, but is now confronted with a global economic crisis out of her control. As the cost of oil rises, the cost of El Salvador`s 'canasta basica,' or basic basket of necessities, rises too. Leonora just got electricity in her home last year, fifteen years after the Peace Accords were signed in 1992, and decades since the guerrillas rose up in protest of the living conditions of the poor. Despite a reasonably paying job as a guide where she gets to share her experience with curious internationals, the benefits of the revolution have not reached people like Leonora the way they were promised.

Where Revolution Failed, Remittances Succeed

Remittances from Salvadorans have stepped in to fill the gap in meeting daily needs that neither the government, nor the international community have managed to fulfill in the post war reconstruction process. In 2006, $2.5 billion, or roughly 17% of GDP, was sent by immigrants back to El Salvador in the form of remittances, and three quarters of this money was spent on direct consumer spending. (1) Just a year later, El Salvador received more than $3.6 billion in remittances. (2) In addition to supplementing basic household expenses such as food, electricity and water bills, much of the remittance money is going to consumer spending on imports. As the most densely populated country with the smallest slice of land in Central America, El Salvador is nowhere near self sufficient in food, and increased food imports from Guatemala, Honduras and Costa Rica have eaten into some of the remittance money, but imports from the US also gobble up a substantial portion. In fact, El Salvador spent more than a quarter of its $7.6 billion of imports on products from the US. (3) Meanwhile, El Salvador only exports $4 billion of goods, which highlights the troubling nature of relying on imports. In light of the fact that more than 2.5 million Salvadorans currently live in the US in search of greater earning power, (4) the cyclical nature of their hard earned remittances flowing back out of the country through import purchases is problematic.

While some families do set aside remittance money for home construction or small business ventures, the majority do not. As Leonora told us, `A lot of families get $500 from their family in the US on a Thursday, and on Friday they are at Pizza Hut. By the end of the weekend, there is no more money.` All of this spending on imported goods and going to international companies translates into remittance money quickly leaving El Salvador, and not circulating within the local economy. Its not just the success of marketing campaigns making those in the Global South feel they should purchase Northern goods to demonstrate their affluence and gain social status. Common in post war countries is a lack of saving culture - when people have seen everything they've worked for destroyed through war, sometimes repeatedly, it becomes easier to use resources for short term, or immediate gratification that brings status rather than planning for long term security. The near future, not to mention five years from now, can appear too uncertain for those who have had previous long term plans undermined.

Yet the use of remittances for consumer spending also indicates that poverty is just around the corner, and thus there is increased motivation for additional family members to immigrate to keep the remittance money flowing. Though the numbers are difficult to know for sure, people we spoke to said that anywhere from 400 to 750 Salvadorans leave the country each day (with or without proper documentation) in search of greater economic security.

An education specialist we spoke with who was active in the FMLN and served time as a prisoner of the National Army, told us that "if it weren't for remittances, people would pick up arms again. In real terms people are worse off than they were before the war." The minimum wage in El Salvador has decreased in real terms over the last 10 years from $96.70 per month in 1997 to $93.36 in 2007. (5) Meanwhile, the price of the canasta basica, or basic basket of staple foods to feed a family, has risen sharply. In the last year alone, the urban canasta basica, which consists of rice, beans, coffee, milk, meat, eggs and cooking oil, rose more than 12% to $159.77, while in rural areas, it rose more than 22% to $122.78 per month. This increase reflects an international trend in food prices and is in part a function of the unprecedented jump in the price of oil. (The same rise in oil and gasoline sparked a recent nationwide transportation strike in Nicaragua. Click here to read more. ) It does not take long to see that the price of food is higher than the local minimum wage, which helps explain why the almost one quarter of Salvadorans that receive remittances spend so much on consumer goods. In short, many cannot afford to meet even basic needs without remittances. Low salaries at home and the myth of money flowing easily from the US also helps explain why so many people attempt to leave El Salvador for the higher wages in the US.

A pick-up heading north at a Central American border crossing.

The Perils of Going

This is not an easy time for Central Americans trying to get to the US. Visa applications cost a non-refundable $131, close to the price of the monthly canasta basica, and the vast majority of people that apply for a visa are denied. Those attempting to enter the US without documents face a range of challenges: from abuse by coyotes (or immigration 'facilitators' that charge thousands of dollars to get to the US), to dehydration and starvation on the Mexico/US border, to deportation if caught. There has been an overall increase in the militarization of the US Mexico border over the last 10 years, and the US government now considers being on US soil without proper documentation a federal offense, at times mandating several months of jail time before deportation. In 2006, more than 250,000 of Central Americans were deported from Mexico and another 50,000 from the US; more than 20,000 of these were Salvadoran. (6) During the same year a staggering 514,000 Mexicans were deported from the US. (7) Once a person reaches the US, their safety is hardly guaranteed, as the US Citizen and Immigration Services (managed by the Department of Homeland Security), raids border towns and work places. These raids have increased substantially over the last several months, recently demonstrated in the case of 300 undocumented workers being arrested in an Iowa factory early in May 2008.

Police checkpoints, like this one in El Salvador, are frequently encountered on the road to the U.S.

There is no one profile of the kind of person who decides to try their luck jumping the border - the lure of remittances gets to many. We were surprised when a 34 year old El Salvadorian police officer we were speaking with, told us about his own attempt to go north. Unsatisfied with his ability to provide for his wife and three kids on his $450 per month salary, he paid a coyote to get into the US without a visa last June. A man charged with upholding the law in his own country, and accustomed to the power and prestige that comes with the job, it was not an easy transition to make himself vulnerable and be considered 'illegal.' He was quickly arrested by US immigration officials in San Antonio, Texas and was appalled at the human rights violations of immigrants in detention. ´When I saw the immigration guards beating other people in custody, I spoke up. I said that I am a police officer in my country and that this is not humane treatment.´ Unfortunately, the immigration officials did not appreciate his comments, and he was deliberately held for four months in custody to punish him for speaking out.

The Perils of Staying

Because of the incidence of child soldiering during El Salvador's civil war, families that could sent their young children (boys especially) to live abroad. In Los Angeles, California, these children underwent adolescence far from the protection of family and after being terrorized by Mexican gangs (itself a continuation of gang violence as survival technique), they formed the only community they could to afford themselves protection: las maras, or gangs. With more than 300 gangs operating in El Salvador, the two largest, "18th Street" and "Mara Salvatrucha," are based in Los Angeles. (8) But since the US government started deporting green-card holders with criminal records, many convicted gang members were sent back to El Salvador. Unaccustomed to life in El Salvador after years abroad, and used to the level of power and revenue gang activities has brought them in the US, it did not take long for these gangs to wreak havoc in El Salvador. The gang problems have gifted the capital, San Salvador, one of the highest murder rates in the world - roughly 10 murders per day in 2006 - and have not made average Salvadorans feel more secure in an already rough post war transition. (9)

Unexploded ordinance and bullets from the civil war.

Of course, not all of El Salvador reels from gang violence and not everyone wants to leave. People we spoke with were adept at analyzing their country's complex situation, and some Salvadorans are joining the ranks of the middle and upper class. Evident in San Salvador's wealth is the fact that some are doing quite well under 'free' trade and international business policies of the past 15 years, though the shantytowns tell the other side of the story. While the draw to immigrate is painted by some as the only answer to their problems, the remittance industry, and the historic and ongoing dependence on the US, translates into complex relationships for Salvadorans today.

Now back at his job as a police officer after being deported from the US, Enrique just shrugged when asked if he would try to cross the border again. Though the risks of immigrating are great, the benefits of working in the US and sending remittances back to one's family have not disappeared, and he may try his luck again.

Mneesha Gellman and Josh Dankoff can be contacted at jadankoff (at) gmail (dot) com.

NOTES:

(1) American Public Media. One Home, Two Nations. Accessed 26 May 2008. http://marketplace.publicradio.org/features/onehome/chinameca_remittances.shtml

(2) Interamerican Bank. Remittances Map 2007. Accessed 26 May 2008. http://www.iadb.org/mif/remesas_map.cfm?language=Spanish

(3) United States Department of Trade. Fact sheet on US/El Salvador trade relations. Accessed 26 May 2008. www.trade.gov/promotingtrade/westhemprosperity/elsalvador.pdf
and World Bank. 'El Salvador at a Glance.' Accessed 26 May 2008. devdata.worldbank.org/AAG/slv_aag.pdf

(4) American Public Media. One Home, Two Nations. Accessed 26 May 2008. http://marketplace.publicradio.org/features/onehome/chinameca_remittances.shtml

(5) 'Nocaut por los altos precios´El Economista de El Salvador. May 20 2008.

(6) Statistic from CARACEN Internacional public awareness poster, San Salvador.

(7) Federation Internationale des Ligues des Droits de l´Homme (FIDH). 'Estados Unidos - Mexico Muros, Abusos y Muertos en las fronteras: Violaciones flagrantes de los derechos de los migrantes indocumentados en camino a Estados Unidos.' March 2008.

(8) Overseas Security Advisory Council. San Salvador, El Salvador: 2006 Crime and Safety Report.' Accessed 26 May 2008. http://www.osac.gov/Reports/report.cfm?contentID=45275

(9) Overseas Security Advisory Council. San Salvador, El Salvador: 2006 Crime and Safety Report.' Accessed 26 May 2008. http://www.osac.gov/Reports/report.cfm?contentID=45275

For more information on immigration issues in Spanish, see CARECEN: http://www.freewebs.com/carecenelsalvador/