Table 5 Household Use of Remittances
Country
Average amount
sent per month1
Percentage of families
that receive remittances
Percentage of remittances saved or
spent on a business or agriculture
El Salvador
$339
22%2
6.1%3
80.5%4
Guatemala
$363
30%5
18.3%6
49.4%7
Honduras
$225
32%8
8.2%9
8.2%10
corridor.28 Using remittances for economic development in migrants’ countries of origin is not an easy or simple proposition,
but it deserves more exploration by policymakers and practitioners. The development community can play a role assisting the
diaspora and remittance receiving communities organize and
implement “collective remittance” investments and provide alternative uses for individual recipients.
Veteran staff of some foreign assistance organizations
working in Central America are skeptical about remittances’ current impact. “Some NGOs have decided that they flatout can’t work in areas with high remittance flows because
people don’t want to do anything productive,” said Catholic
Relief Services (CRS) El Salvador Country Representative
Erica Dahl-Bredine. “People don’t want to do anything except receive remittances.” This perspective is shared–to an
extent—by some Central American nongovernmental organizations and analysts. Enrique Merlos, a program coordinator with the Salvadoran organization FUNDE, said that
currently, remittances are limited to helping the families of
migrants survive. “It’s not creating economic impacts,” Merlos said. “It’s not creating jobs or increasing incomes.” Merlos said there was a dearth of both collective and individual
remittance wealth-generating projects. He said that the
amount of remittances invested into sustainable enterprises
is small “due to the lack of mechanisms and policies…If I [a
remittance recipient] am not conscious of how to invest I’ll
just buy things. There needs to be training and programs for
productive investment.”
Even in El Salvador, which has the largest and best-organized Central American diaspora, government-supported
efforts to channel remittances to productive investment are
Percentage of remittances
spent on consumption
rare. The Salvadoran government has a long history of working with the diaspora on projects like roads and schools, but
they have not been as engaged in projects that gener