Exiled Nicaraguans and family remittances: A financial pillar of the Ortega regime

Humberto arrived in Miami less than 13 months ago, after leaving Nicaragua on an “excursion” to Guatemala, subsequently crossing Mexico and turning himself in to the U.S. Border Patrol on the north bank of the Rio Grande. He was held for a few weeks in a detention center until his aunt vouched for him; she paid for a plane ticket to Florida and put him to work in a family restaurant, where the college student has applied for asylum. Sending money to his mother and younger brother, who stayed behind in Managua, was one of his priorities when he received his first pay checks.

“I came before they approved the humanitarian parole issue. I crossed over illegally, because I did not see a future in Nicaragua. I earned about $350 a month in a clothing store, but it was not enough to pay for my college and to help my brother and my mother with the house,” Humberto told EL PAÍS. “Now I send them more or less that amount as a remittance, but I hope to be able to increase that money when I am granted asylum, and manage to continue studying and to have a better job in this country.”

Humberto, who was studying for an engineering degree, is part of the exodus of 725,000 Nicaraguans who have left the country since 2018, when social protests broke out and the nation was plunged into a socio-political crisis, mixed with unemployment and a totalitarian shift. Almost 7% of Nicaragua’s entire population is on the run. Between 2021 and 2022, U.S. Customs and Border Protection (CBP) estimates more than 200,000 Nicaraguans have crossed into the United States. Most of them, like Humberto, share the same priority: sending remittances back to their families.

According to figures from the Central Bank of Nicaragua (BCN), as of last May, remittances from the United States were growing at a rate of over 80%. Three out of every four dollars that came from family remittances in 2022 originated in the United States, followed by Costa Rica and Spain. In total, family remittance inflows totaled $2.47 billion in 2022. Paradoxically, these overseas remittances provide the regime of Daniel Ortega and Rosario Murillo with one of their main economic supports.

A “policy of expulsion and exclusion”

A recent report by the U.S.-based Inter-American Dialogue think tank describes the Nicaraguan exodus as a “policy of expulsion and exclusion” on the part of the Ortega government. “Growth is largely driven by family remittances, which are projected to increase to $5 billion in 2023,” says the study, conducted by political scientist Manuel Orozco. “This means that economic dependence on remittances will be over 30% of GDP and one million households will receive money.”

On the other hand, these figures reflect the importance of the United States as Nicaragua’s main trading partner, despite the fact that the Ortega and Murillo regime maintains an anti-imperialist discourse and diplomatic relations are experiencing serious flashpoints, to the extent that Washington has been left without an ambassador in Managua. “Exports to the United States represent 35% of GDP, half of which comes from the free trade zone, from 130 companies - 34 U.S. and more than 40 Nicaraguan,” adds Orozco in his analysis.

Enrique Sáenz, an economist and exiled opponent of the regime in Costa Rica, explains to EL PAÍS that family remittances represent “liquid dollars or euros, since if they come from Spain, they are also transformed into dollars. [Remittances] from Costa Rica are also called liquid currency, because they directly feed the reserves of the Central Bank, where we see servants of the dictatorship boasting about the magnitude of the reserves in the BCN.”

“While the tyrant rails against imperialism, Nicaraguans are turning to the empire and it is from the empire that they send these dollars with their sweat, with their sleeplessness, to be able to help their families who suffer from unemployment and the consequences of the high cost of living,” says Sáenz. The economist points to the latest Gallup survey. Published last March, the poll reveals that 47% of Nicaraguans’ economic projections for 2023 are negative, compared to 42% who are optimistic that things will get better. In Gallup’s view, a factor that generates feelings of economic stability is remittances from migrants to their families.

Massive migration, economists and experts agree, has led to Nicaragua posting low economic growth of 3% in 2022. Although macroeconomic figures keep the economy out of trouble — albeit without generating wealth — Nicaraguans still fail to make ends meet, in a context of a constant rise in the basic cost of goods and services.

“Nicaraguans continue to live on 2017 income levels of $2,200 per capita per year (the basic family income in Nicaragua is $250 per month), while the basic cost of food is $6,000 per year,” says Orozco. “Nor is there an increase in the labor force in the formal economy. On the contrary: informality is growing. Those who are doing well are the Nicaraguans who work in commerce or receive remittances,” notes the Inter-American Dialogue report.

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