Expatriates keep Salvador afloat with remittances

May 19, 1991|By Christian Science Monitor

SAN SALVADOR -- Every month, Irma Ochoa gets a $100 check in the mail from her son in Los Angeles.

"It's what my mother and I live on," says the middle-aged $H woman,who sells fruit juice in plastic bags in a poor neighborhood here in San Salvador. But this month the check is for $50.

"He's a mechanic, and he's just been laid off. There's a recession there, you know," she says, pointing a metallic-lime polished fingernail in a vaguely northward direction.

Four years ago, unable to find work here, Mrs. Ochoa's son joined an exodus that has swelled to an estimated 800,000 Salvadorans during the past decade. Fifteen percent of this nation's population now lives in the United States and Canada. Fleeing an 11-year-old civil war that has cost 75,000 lives and wrecked the economy, these expatriates have become an indispensable fount of financial aid for their homeland.

In macro-economic terms, "it's the single most important source of foreign currency for the country," says Mauricio Gonzalez Orellana, an economist at Salvadoran Foundation for Economic and Social Development, an economic think tank here.

U.S. officials put family remittances at $400 million to $500 million annually. Some private economists and government officials say the tally is at least $600 million. Either way, the sum is nearly equal to, or exceeds, the $540 million earned by all of El Salvador's export industries combined in 1990.

"El Salvador would be another Nicaragua without this income," says economist Lisando Abrego at the Jesuit-run Universidad Centroamericana. Nicaragua, which was also at war for nearly a decade, has seen its per capita gross national product fall 40.8 percent since 1981. During the same period, El Salvador's GNP fell 15.3 percent.

Mr. Abrego ticks off the benefits flowing from this 2,500-mile financial umbilical cord. "It's helped the balance of payments, stabilized the exchange rate, reduced inflationary effects and allowed the economy to grow."

In down-to-earth economic terms, the funds from families abroad are direct, unencumbered aid, going primarily to El Salvador's poorest. "The majority of the money goes to rural families. It's often the difference between surviving and being swamped by their difficulties," says Mr. Gonzalez.

The average monthly check sent by relatives in the United

States is $100 to $150, according to managers at several foreign exchange houses. That is two to three times the average minimum wage ($50 a month) earned by rural Salvadoran families. Indeed, the minimum wages of a rural family in Latin America's most densely populated country will not pay for the minimum monthly basket of foods, according to government figures.

There is some concern -- given optimism over negotiations under way in Mexico City -- that peace between the government and leftist rebels might end the supply of family aid money. But Mr. Gonzalez doubts that peace would immediately bring large numbers of expatriates home.

"I don't think the flow of funds would drop much," he says. "Most will want to continue to live in the United States."

Certainly there is little pressure at present for Salvadorans in the United States to return. They were granted "temporary protected status" late last year under the Immigration Act of 1990. They can now live and work openly in the United States until the middle of next year.

Mr. Abrego says protected status is a positive step that will help ensure El Salvador's recovery. The economy grew at a rate of 3.4 percent last year -- the fastest growth rate since the war began.

But taxi driver Salvador Hernandez Reyes, who has two brothers and a sister working in the United States, says he has not seen any sign of economic revival. "The foreign businessmen aren't back, and the tourists certainly haven't returned," he grumbles.

Mr. Abrego notes that El Salvador's economy would have to grow faster than 5 percent each year for 10 years to return to the per capita economic output (adjusted for inflation) of 1978.

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