Remittances
Submitted by Daddy-YO on Thu, 2012/05/17 - 10:16.
A Nicaragua Dispatch (5/13/2012) article by Tim Rogers (of course) says,
"Last year, Nicaragua attracted a record-setting $967.8 million in foreign-direct investment—about $100 million less than the total amount of remittances that entered the country." Nicas abroad sent at least $1.053 billion (Inter-American Dialogue’s figure) to their families in Nicaragua. (That doesn't include what padrino Hugo sends to the Ortegas.) See,
http://www.nicaraguadispatch.com/business-travel/remittances-prop-nicara...
My contribution was a bit more than 1 ppm of that (the wife's family), thank you (er, you're welcome ... whatever). But I don't believe these measurements capture what I send, because it's all done with ATM cards on US accounts.
There was talk of taxing it
A couple of years ago. It was a trial balloon that got shot down.
What they were saying was that if it was a few bucks for mom and pop etc then that was one thing, However, where little Juan was doing real well and was sending back gobs of money allowing a family to live high on the hog, then that should be taxed as 'unearned income'.
The amounts can be surprizing
some working abroad send back a hundred or 2 every few months and more motived people send back a grand or more per month, even when they are only making 1500 a month. Most of it here seems to go into home construction, but medical care and consumer electronics take a big bite, too.
"You can avoid reality, but you cannot avoid the consequences of avoiding reality." Ayn Rand
ATMs / Self-transfers
You are right, there is no way to calculate or even estimate ATM delivery of funds (most measurement bodies admit this in a little-known or read footnote in any analysis or report); also, many people use account-to-account delivery, which is not tracked since the sender and receiver are the same person and as such the transfer is not classified as a remittance by either the sending or receiving bank. If my wife uses the Wells Fargo Global Remittance setup, it goes her from account to her niece's, and is counted as a remittance under the Express-Send contract. But, if the funds simply go direct Wells Fargo to Atlantida (we are in Honduras, not Nicaragua), from her account to her account, there is no remittance tracking - though the same amount ends up there, at almost the same exact fee. This, and many other variables, make it all-but impossible to know how much is really remitted, though even if you use the trackable numbers, it is hard to explain how so much money goes through the system (the expected income of the senders cannot explain it) given the number of people and expected salaries of them - not just in Nicaragua, but in any heavily-remitted country.
interesting observations mjt
Setting aside how one determines "the expected income of the senders", are you suggesting that remittance statistics include:
1, possible, drug or otherwise illicit monies being laundered in smaller amounts through a network of 'agents'?
And/or, 2, business or real estate transaction with ex-pats living in country that maintain foreign accounts, esp. if avoiding ex-country taxes?
I could understand that group 1 would seek the anonymity of those cash cards, or false IDs with Western Union, &c..
That sent money...
Basically, look at the stats per a country that is really heavily remittance dependent. Then, use any reasonable stat per the number of people from that country living abroad (use the highest estimate, it still wont matter), including stats that list the highest numbers for undocumented people, who are harder to count. Adjust for TPS, if need be. Adjust for any minor estimate (people who are minors rarely can and do send any money). Look at local statistics on the average amount families actually receive from family living abroad (it is remarkably tiny, really). Then start doing the math on what would really need to take place to get that much money there, via those people, many of whom are living abroad illegally and not bringing in much money and have very limited expendable income. When you figure in the fact that people who send the most money are also those least likely to use almost all trackable remittance setups, the math isn't there to begin to explain what is going on, even if you highball everything. The numbers are astounding, really. Yes, the two of the more likely explanations are ones you listed, though the people need not be expats or actually living there to utilize the setup or partake in it.
Another system
hard to keep track of statistically, is monies sent by hand. Bypassing trackable and "Costly" sources. Especially at certain times of the year, christmas,birthdays, weddings,medical emergencies, annual visits,etc., whereas the family member/friend may not send money on a monthly or regular basis. Countries with a heavy back and forth traffic, such as the Caribbean but not limited to The Caribbean. Matter of fact from a cultural "Habit" point of view some banks are well aware of this.Scotia Bank, Santander, Barclays, come to mind.
Thanks for posting the article. Interesting read.
I'm pleased it mentioned the recent focus on enforcement by Costa Rica of their Immigration law as that will have a huge impact on the hundreds and thousands of Nicaraguan migrants to the country (and their remittances). They'll be far more vulnerable to exploitation, red tape, increased costs and corruption.
Actually their rights are increasing...
Nicaraguans working temporarily in Costa Rica have more protection under the agreement signed last month between the two countries. Both countries now plan to negotiate a similar agreement with El Salvador as this country has become a new destination for Nicaraguan workers who were previously going to Costa Rica. Although the numbers of migrant workers are less, it still remains a viable proposition for Nicaragüenses working in the agricultural sector such as coffee plantations as well as construction and domestic services.
If they are being exploited, its here in Nicaragua too:
The IMF and the “Informal Labor Market” – The International Monetary Fund (IMF) is concerned that the informal labor market in Nicaragua represents 70% of all employees. Surveys say there are 1.4 million of them. In most developing countries the informal sector represents almost 80% of the working poor. They are traditionally working as undeclared labor, under the minimum wage and with no social security (INSS).
Now, if the government would also just collect the tax they leave on the table every year...$700 Million, they could tell the US to keep their waiver and put $700 million a year into healthcare and education (for example) for the families left behind.
287 thousand Nicaraguans live in Costa Rica
A report in today's LP says that according to the 2011 census results 287,766 Nicaraguans or 74.6% of all immigrants are Nica.
It used to be 400,000 and another 400,000 suspected illegals.
Recent immigration changes must have reduced that amount also.
DULEX
I was told 5 k is the max then they start looking.
They have some hidden reporting
But maybe not the ATM use in the way you say.
For example, I was told recently that you can only make one transfer per month of LESS THAN US$10,000. (The over $10,000 transactions are reportable, as you know).
A guy had transferred $9,000 for a legal matter and tried another $6,000 in the same month which was rejected and sent back to his bank in the US.
It was picked up or red flagged "upon entry" by Banco Central Nicaragua who rejected it.
The new legislation as a result of the International Financial Action Task Force will be more restrictive in order to satisfy world banking rules.