A country of retirees
This article was translated from an opinion column by Otto Martín Wolf, La Prensa, Honduras, December 4, 2006. Sr. Martín is a regular contributor to this newspaper.
A country of retirees
Our principal export product is people. We send people outside the country and these people send money back to us: las remesas (money transfers).
After las remesas are the conventional products of exportation that have a big problem: We have to work to obtain them. For example, when you send a box of shrimp (or any other product) to the exterior, in return comes a check. The difficulty with this type of exportation resides in that, if you want another check the following month, you have to send another box of shrimp and for this you have to work.
But, if you export people, most likely a check will come every month, maybe for life!
This is the reality of Honduras; it is our reality.
We have to be clear that our economy is sustained by the money of remesas. The growth of banks, shopping centers, the sales of cars and televisions, hamburgers and donuts, all depends in major part on las remesas. If they don't exist, the Lempira might move to 30 or 40 per dollar and with the tendency to continue devaluing perpetually.
And, besides, if these people wouldn't have gone (how many are there, 800,000?), they would be here competing for jobs, the use of public services like hospitals, schools and increasing the number of criminals.
The business, from the financial point of view, is circular. We get rid of the problem and, in return, they send us dollars.
Besides, those who venture looking for opportunities − men and women − are valiant and merit admiration and respect. Futhermore, all those who are human have a right to look for a source of income wherever they can find it: Miami, Madrid, or Karfanabú.
What worries me are two things: The first is what could happen if las remesas terminate. Say for example, if the USA entered a depression like happened in the 1920's (God forbid) and our compatriates lose their jobs and can't send more money. Fortunately, this outlook isn't possible in the near future.
The second of my worries is for something that is already occurring and this is where the immediate and long term danger for Honduras lies.
Many of our compatriots who receive las remesas are accustomed to not working, simply because they have no need to do so.
Normally we haven't been fanatics of work, they say, but now the thing is getting more complicated; many of our relatives outside the country are paying us not to do so. We only have to sit and wait and each month go to Western Union or the bank and later go out to spend. This situation is, more or less, like this mountain of people are retired and each month receive a retirement check.
How does this money increase our production capacity? In very little. What it does increase is the capacity to buy televisions, stereos, clothes and food. It is a cycle that I don't like at all: We export people − receive dollars − import televisions − reexport those dollars.
We are learning to consume, not to produce. I definitely don't like this prospect.
La Gringa: Official Honduran estimates are that las remesas are expected to reach US $2.3 billion in 2006 and while reports vary, remesas are expected to represent somewhere between 25% and 40% of the gross national income of Honduras.
In his article, Mr. Martín asked if 800,000 was the number Honduras living in other countries. Other estimates report that it may be as high as 1 million. Out of a population of approximately 7.3 million (again, accurate statistics are just not available) that would mean approximately 12.5% of Hondurans have left their country to try to find a better life. If the CIA's estimate that 39.9% of the population is 14 and under, one million people represent about 24% of the potential working population.
No matter which statistics you choose, it is pretty clear that the country of Honduras would collapse without the money transfers from relatives working in other countries, primarily the USA (estimated at approximately 94%).
I translated this article almost entirely by myself without aid of Google or dictionary! El Jefe was very impressed, but if any of you Spanish speakers notice any errors, please let me know.
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10 comments:
Since you live there it is probably a considered a good thing.
Living in the U.S., I would have to disagree, this money is not tracked, hurts the economy here since it is not re-invested, and will eventually cause the depression to a lesser degree than the one they mentioned and fear.
Found, Neither the author nor I are saying it is a "good" thing, although it is crucial for survival of many families and for the survival of the country for that matter. I find the statistics completely shocking!
It's a much bigger problem than just Honduras. Central America alone (not including Mexico) will receive US $9.3 billion in 2006, at the average rate per family of $224 per month.
Honduras doesn't have any sort of welfare or unemployment benefits. These remesas have become that. And like welfare benefits, they sometimes (often?) have a bad effect on the recipients.
But, as the author pointed out, much of the money does flow back to the US in the form of payments for imported products.
Thanks for commenting.
That is pretty scary. All indications are that the US will continue to get tougher on illegal immigrants and I would think some percentage would be Honduran.
I guess a few of the locals will have to go our of retirement and look for work.
It's not really so different here in Holland. In our case there is just simply a lot of money around. People still have savings from the economic boom from a few years ago or have investments. A lot of people have a lot of money in home equity. There are just a lot of wealthy people here.
The labor market is also difficult now, and there aren't a lot of desirable jobs. A lot of young people are leaving the country in search of jobs and a better life abroad. These is also a growing aging population.
The government has done all they can to wean people off of state benefits, but they say there still aren't enough working people to support the economy and provide a broad enough tax base. They are trying to encourage knowledge migrants to come here and start businesses.
The economy here too is closely tied to the US, mostly through the export of agricultural goods. We are all nervously watching as the US economy is showing signs of slowing down...
I want to say too that I agree with found in that I don't think remesas help the US economy very much. The US is not exporting all that much for people to buy anymore, because even things marked with US brands or 'made in the US' are often mostly foreign made or have a high percentage of foreign parts. I think remesas look much more like the US importing cheap labor and driving up their own trade deficit even more.
Don Ray, lots of Hondurans do get deported back to Honduras, I forget the latest number. From what I've heard/read, many of them just turn right around and head back.
Patrick, Interesting that the young Dutch are leaving and the government is encouraging foreigners to come.
There is that saying, "The U.S. sneezes and Central America (and the world?) catches cold."
Well, the solution for Honduras is obviously within its own inept and corrupt government. Whether there will ever be any change, I don't know.
Of course you are all correct. The US economy has slipped a little. Where it will go???? We do not manufacture much here anymore. That saddens me and at the same time scares me. We rely on China for much of our manufactured goods. The learned trades of our fathers have rapidly diminished. If we had to gear up to manufacture again, could we? This war in Iraq! 400 billion, yes, with a "B" and another 160 billion recently appropriated by congress... is going to kill us. It is all borrowed money! Much of it from China. And none of it is included in the budget. We have grave problems looming in our near future. Pokey
I am more surprised by the comments than on the article. I find them condescending and incredibly self-centered. The fact is that people leave Honduras and other countries like it because the prospects of staying are bleak at best. The people they sent money to (parents, kids, wives, etc..) do not leave a life of luxury or retirement buying TVs, hamburgers or donuts. At best the subsist from month to month, occasionally gathering enough money to buy a small item not needed for substenance or medicine. There is simply no work in Honduras if you are over 40, do not have college education and no political connections. Have you seen the classifieds where the jobs explicitly ask for "younger than 35". That's why the informal economy is the largest segment of the Honduran economy. Mr. Wolf's article is miopic in the sense that indicates that Honduran's live only of remesas. In fact, remesas are just a portion of it all.
I have seen the employment ads and wrote about it last month:
Equal employment opportunity
Contagious, you don't have to tell me how bleak the situation is in Honduras -- I see it every day. But as long as the greedy, corrupt politicians are in charge, it will never get any better, no matter how many remesas are sent.
theres a bank here that has a very interesting way of dealing with remesas...If your loved one sends his remesas through the bank always, the bank will help you cost the repatriation expenses of your loved one once they deport his sorry illegal alien behind....
It makes me sad that banks work this way because they promote illegal migration...well in fact the government promotes illegal migration also, but then again thats what happens when they vote for....well when they vote period.
That's interesting, Daniel. I hadn't heard of that before. I'm wondering if by "help with repatriation expenses" you mean that they offer a high interest rate loan?
Also, I didn't even know that there was repatriation expenses. I thought they were sent back at the expense of the deporting government? I'd like to know more about this.
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