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.
After 16 months of continuous growth, remittances in July were down 9% compared to the same period in 2010.
According to the Bank of Guatemala (Banguat), remittances received in July totaled $349.8 million, 9% less than the $384.6 million received in the same month in 2010.
"Compared to remittances received in June, when there was a monthly record of $416.4 million, the drop was 16 percent.
The crisis has been worsened by higher food prices, bad bean and wheat harvests caused by drought and less remittances.
A contributing factor is the movement of agricultural human resources, which has caused excess labor supply in some regions. This happened in addition to last year's drought, which destroyed 90% of wheat and bean crops, basic components in the daily diet of Guatemalans.
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.
In the first half of the year remittances reached $1.93 billion, $203 million less than the first half of 2008.
According to monthly stats published by the Banco de Guatemala (Banguat), remittances summed $349 in June, the highest monthly figure since October 2008.
Ruben Darío Narciso, consultant for the Asociation of Economic and Social Investigations (Asies, acronym in Spanish), was quoted by Elperiodico.com.gt: "A reduction in remittances has negative effects, causing a reduction on the purchasing power of households that receive the money, and increasing precaution when spending in goods and services".
Fourth quarter of 2008 registers first decline in nearly a decade. Flows of money sent home by migrants hit by economic slowdown, exchange rate swings
After almost a decade of growth, remittances to Latin America and the Caribbean are likely to decline in 2009 for the first time since the Inter-American Development Bank started tracking these flows in the year 2000. Remittances have been decreasing since late 2008.
Fourth quarter of 2008 registers first decline in nearly a decade. Flows of money sent home by migrants hit by economic slowdown, exchange rate swings
After almost a decade of growth, remittances to Latin America and the Caribbean are likely to decline in 2009 for the first time since the Inter-American Development Bank started tracking these flows in the year 2000. Remittances have been decreasing since late 2008.
Export revenues grew by 2.8% and tourism by 4.3%, but remittances fell by 9.6%.
The statistics published by the Bank of Guatemala and noted in sigloxxi.com, referred to the period between January 1 and March 5.
The drop in remittances is highlighted: “In February of this year, $281.9 million entered the country from family remittances, an amount $36.4 million less than what was captured during the same month in 2008, a decrease of 11.4%.
Inflation is declining and economic growth is decelerating - Analysis of the Executive Secretary of the Central American Monetary Counsel.
The excessive volatility in the financial markets and the low investor and consumer confidence levels are omens that the crisis is going to last, which is being translated into lower levels of consumption and investment and high unemployment rates in the most developed countries.
At the end of 2008, remittances reported a 4.5% increase compared to 2007, the lowest growth since 1999, according to data from Banguat.
Prensalibre.com reports that "for 2009 a growth close to zero is expected, however we do not believe that it will be less than in 2008," said Victor Lozano, an official from the International Migration Organization.
Income earnings from remittances and tourism grew less than 5% in 2008.
Last year the growth was 14% for remittances and 16.8% for tourism, according to data from the Bank of Guatemala (Banguat).
The global economic crisis has been the main factor for the drop in earnings income for the "no chimney" industry, and in the case of remittances, this is due to massive deportation from the US this year, according to analysts.
The international crisis has started to show in the country, according to indicators, consumption has been one of the most affected.
A sign of this is the income from remittances recorded by the Bank of Guatemala (Ban-guat), which after an increase of 14.3% as of November 20, 2007, this year for the same period the increase was only 5.0%.
The most revealing thing was that, according to the International Organization for Immigration, 50% of what is sent home by Guatemalans in the United States is used from consumption. Up to now there had been now drop, however the slowdown of the growth rate is significant.
Only $361 million were received in October compared to $371 million last year, according to the Guatemalan Bank (Banquat).
According to the International Immigration Organization (IMO), family income from remittances total close to 11 percent of the Gross National Product (GNP) for Guatemala and benefits 4.1 million persons.
En 2007 this Central American country received remittances on the order of 4,128 million dollars and for this year they expect 4,300 million
Central American banks were booming -- but close ties with the USA darken their future.
Central American was undergoing an interesting banking system evolution. Now the crisis has hit hard. Remittances have dropped and so has international business. More expensive capital halts investments in infrastructure and global liquidity restrictions will have a strong impact.
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