By Judith Flores
As the exodus of Nicaraguans for political and economic reasons increases, remittances to Nicaragua increase: millions of dollars are entering the Central American country.
A situation that provides some “stability” to the economy and allows those who stayed in Nicaragua to consume in the local market and put bread on their table.
The Central Bank, in its recent report, said that from January to August, Nicaragua received US$1.96 billion in international remittances, a figure representing an increase of over 40% compared to the same period – eight months – of 2021.
Last year, Nicaragua received close to US$2.2 billion under this modality.
Figures published by the Bureau of Customs and Border Protection (CBP) reveal a substantial increase in the emigration of Nicaraguans.
A total of 145,684 citizens of that country entered the United States in a period of 11 months corresponding to the fiscal period 2021-2022, which ended last September 30, and whose final report is expected to be presented in the coming days by the authorities.
The behavior indicates that emigration tripled in the recently concluded fiscal period compared to the previous period (2020-2021). The September report and the final report for the year are expected to be presented by the Border Patrol in the next few days.
Nicaraguan emigration -whose main destination is the United States- does not seem to stop.
Influencers on social networks have published videos showing images of huge lines that Nicaraguans make daily to carry out passport procedures at the offices of the General Directorate of Migration and Alien Affairs (Dirección General de Migración y Extranjería).
A second destination is Costa Rica. The newspaper La Prensa reveals that, from January to July 2022, more than 46,000 Nicaraguans have requested refuge in that country.
By the end of the year, the number of Nicaraguan emigrants will exceed 200,000 – a significant number for a small country, the third poorest in the region, with an average population of 6.5 million.
The regime recently acknowledged that remittances stimulate trade.
It was stated by the president of the Central Bank, Ovidio Reyes, who assured that the dynamic of remittances reception is stimulating commercial activity “because many of these remittances go to low-income families and when the remittances arrive, they are used for consumption”.
Remittances represent 17% of the Central American nation’s Gross Domestic Product (GDP). The remittance-sending countries are the United States, Costa Rica, Spain, Panama, and Canada.
According to the latest World Bank report, “real GDP increased by 10.3% in 2021 and continued through the first half of 2022 with 5% growth. Private consumption facilitated by remittances and exports drove the expansion in the first half of 2022.
However, the figure presented generates doubts because not even many developed countries have reached the “prosperity” supposedly achieved by Nicaragua. There are plenty of reasons for this: the aftermath of the pandemic and, incidentally, the war in Ukraine, for example.
Nicaragua has been facing a socio-political crisis for almost five years, which has contracted investment compared to pre-2018 levels.
All this is motivated by the country’s brutal repression and, of course, the Covid-19 effects mentioned above.
Even though the latter has rather allowed Ortega to have access to millions of dollars in loans and international aid.
Former opposition deputy in exile Eliseo Núñez states that it is relative that the economy in Nicaragua is “doing well” as the Ortega regime pretends to sell.
“Ortega has over-indebted the country in this period. He has possibly managed to break the cycle, which would mean that in this bad cycle, he managed to do things that allow the economy to continue functioning.
“But when you look at the panorama with an objective assessment, you see that exports have grown in value, but not in volume, except for the free trade zone, which has grown in volume”, the analyst emphasized.
INDEBTEDNESS
“The second thing is that the issue of indebtedness has a ceiling. It is already reaching a percentage at which the indebtedness begins to limit, and when that happens, Ortega no longer has an economic engine.
“He achieved, during the period 2018-2021, the disbursement of 29.7% of all the debt that Nicaragua has since 1990 in disbursements,” explained Nuñez.
The debt currently exceeds US$17.7 billion.
“Ortega has a private debt. Most of it is Albanisa- of about US$5.2 billion with Petróleos de Venezuela S.A. (Pdvsa). Up to February, another US$7.6 billion of debt correspond to the public sector.
“There is almost US$13 billion between private and public debt. And the internal public debt is almost US$6 billion, which is an unsustainable debt”, added the Nicaraguan opponent.
With information from Gaceta