Giacomo Mattei & Luis Campos
Emigration as Economic Alleviation
Some countries actively encourage emigration as a strategy for development. Migrant laborers send back a portion of their earnings – remittances – which can have multiplier effects on the home economy.
For many countries, remittances make up a larger portion of gross domestic product (GDP) than foreign direct investment (FDI). The World Bank’s data shows that Nicaragua’s 2022 GDP was over 20% remittances and just over 8% FDI. In 2023, remittances to Nicaragua were nearly 50% higher than the year before, standing at $4.24 billion, an estimated 28% of GDP.
Venezuela, on the other hand, has consistently received fewer remittances and very little FDI between 2000-2022 (both remaining largely below 2% of GDP according to World Bank data), though the Inter-American Dialogue estimates that remittances reached 5% of GDP in 2023. Interesting hypotheses can be considered to explain this behavior, such as the migration of entire family households, and/or a lack of confidence in the country’s future as a destination for personal and family investment.
While there is not sufficient data about the amount of remittances and their weight in Cuba’s economy, indirect evidence suggests that the chronic economic crisis was aggravated further after an estimated decrease of 3.31% in remittances since 2022, despite an amendment to the limit approved by the US government. Thus, in Cuba, migration appears to be an asset for political stability rather than a path for economic alleviation, given other structural factors that exert a more significant effect on the national economy.
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