Guatemala's business sector responded with concern to President Trump's warning about imposing export tariffs and levies on remittances and transfers.
The announcement made by the president of the United States comes after the Guatemalan Constitutional Court issued a ruling in which it limits its foreign policy functions to the Executive, by granting a provisional injunction that prevents the negotiation or signing of any agreement.
During 2018, family remittances to Central American countries and the Dominican Republic totaled $28.670 million, of which $9.288 million went to Guatemala.
In 2018, family remittances to Central America and the Dominican Republic (CARD) grew 11%, showing a slight slowdown with respect to what was observed in 2017 (12.0%). This slight slowdown was observed in all countries except Honduras, explained the Economic Commission for Latin America (ECLAC).
The US president is already putting into practice his premise "America First", which leads Central America to anticipate negative changes in the flow of remittances from that country.
From a statement issued by the Central Institute for Fiscal Studies (Icefi):
Icefi recommends changing the economic and fiscal model in Central America in light of possible adoption of radical US policies.
The amount of remittances from one Central American country to another now reaches $1 billion.
Revistamyt.com reports: "The money transfer company AirPak, representative of Western Union (WU) in Central America, has announced the start of a strategy that aims to compete in the market of remittances sent by internal migrants in the isthmus."
According to Carlos De Paredes, manager of the company in Guatemala, the local market is worth around $300 million and about $1 billion at the regional level. The firm has no presence in Panama.
New firms are expected to entry in the remittance industry with new technologies, especially for mobile phones.
According to Luis Felipe Rodriguez, vice president and general manager of Western Union in Mexico, the slowdown in the U.S. economy has led to a slower pace of job creation, which along with more efficient border controls and even more restrictive laws in some states such as Arizona, has caused an unprecedented decline of migration to that country. "Regulation in the United States is changing the dynamics in the business of remittance companies," he says.
Billions of dollars that alleviate poverty but put conditions on the productive development of Central American countries.
Taking the example of El Salvador, whose economy over the last 20 years has received $40 billion dollars sent by Salvadorans from abroad, an article by Roberto Flores in Alainet.org points to the extraordinary influence of the phenomenon in reducing the poverty-despite the stagnation of the Salvadoran economy-but also its involvement in the country's productive matrix.
From the month of September recipients of remittances in Guatemala, Honduras and El Salvador will be able to receive them on their mobile phones.
By using a its cellular network platform, the Guatemalan company Tigo Money, a subsidiary of Tigo, will offer international services for money receipts.
Since early 2011, Tigo Money has been in the remittance business nationally in Guatemala.
By country: Guatemala $4.37 billion; El Salvador $3.65 billion; Honduras $2.86 billion; Nicaragua $1.05 billion; Panama $592 millions; Costa Rica $530 millions.
Inter-American Development Bank Report:
Remittances to Latin America and the Caribbean rose to $61 billion in 2011
MIF’s annual analysis of migrants’ money transfers shows year-on-year growth of 6%
A website will allow senders to compare the costs of their remittances from the U.S. to Central America, encouraging competition between providers of such services.
The Center for Latin American Monetary Studies (CEMLA), the Multilateral Investment Fund (MIF), a member of the Interamerican Development Bank (IDB) and World Bank today (Thursday 2 February) launched enviacentroamerica.org, a free online tool that can be used to compare and make transparent the costs of remittances from the United States to six Central American countries and the Dominican Republic.
The recovery in the amount of money sent to their countries of origin by Central American emigrants remains strong.
In the first quarter, in Nicaragua, remittances totaled $ 287.5 million, 8.2% higher than in same period in 2010.
Monetary transfers to Guatemala (the largest recipient in Central America), totalled $1,758.7 million in the first five months of 2011. An increase of 10.4% compared to the same period in 2010.
In the first two months of 2011, Nicaragua received $137 million in remittances from abroad, 10% more than in the same months of 2010.
All of Central America and Mexico has seen a recovery in remittances according to a report from the Inter-American Development Bank (IDB), which states that money flows increased by between 6 and 16% in the first two months of this year.
Slow recovery tied to a lagging U.S. economy, 3% growth in 2010 due to increased domestic consumption and rising remittances and international trade.
The countries in Central America are recovering gradually, led by a rebound indomestic demand (following its sharpcontraction in 2009), which has partly spilled over into imports. Pickups in exports and morerecently remittances have been further positive developments.
Inflation deceleration and Risks to economic recovery.
The quarterly report from the Executive Secretary of the Central American Monetary Council (SECMCA) focuses on the region's inflation and recovery prospects.
Inflation, measured by year-on-year change in consumer prices, slowed in the second quarter of 2010 to 4.9%, compared to 2.9% in June 2009. This level is within the target limits set by the region's central banks.
Monthly Index of Economic Activity (IMAE), exports, remittances, international reserves, exchange rates, inflation, tax collection, banking system, foreign investment, tourism and outlooks.
Oscar E. Mendizábal, editor of the Blog “Desde Guate” (From Guatemala), gathers and analyses the main factors influencing the Central American economy (except Panama) during the first six months of this year.
One year after the fall of Lehman Brothers, SECMCA analyzes the international situation, and Central America's perspectives and current situation.
Production continues to fall, as evidenced by the Central American Monthly Economic Activity Index, confirming a process started on the last trimester of 2008. June's variation was -1.9% when compared to the same month of the previous year.