Remittances on the rise fuel housing boom in Guatemala
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Remittances on the rise fuel housing boom in Guatemala

The small village of Horcones sits at the end of a pot-holed road in Jutiapa, in southeastern Guatemala. Around 40 percent of the population works producing livestock, earning an income that is not reflected in the conspicuous wealth of the whitewashed, Grecian-columned houses that decorate this farming community.

The majority of people here seem to know someone who works abroad and sends money home, a situation that is replicated around the region and accounts for affluent properties springing up in less-than-affluent areas.

Remittances, money sent by expatriate workers to their home countries, have been steadily rising in Guatemala, despite increasing deportations of those workers from the United States. 2014 was a record year for the Central American nation, with more than $5.5 billion received in remittances — an increase of 8.6 percent compared with 2013.

Griselda Toj lives in Sacatepéquez, 40 km from Guatemala City. Each month she receives, on average, $330 from her husband, who works on a dairy farm in Idaho.

“The money he sends back helps us a lot to buy food for the children, send them to school and buy them medicine if they get sick,” she says. “If he wasn’t there we wouldn’t be able to cope because over there he’s got a lot of work.”

Poverty, violence and family reunification are among the main forces driving Guatemalans to make the journey north.

“Our life is difficult here. My husband left three years ago because my son became ill — he had asthma and bronchitis,” says Toj. “The medicine is expensive and he had to use a special apparatus. We could hardly afford to pay for it.”

In December 2014 alone, $496 million was sent back by Guatemalans working abroad, predominantly in the U.S., which represents an 11 percent increase compared with the same month the previous year.

Like many people who receive remittances, Toj is saving to build a house — an example of the effect that money sent from abroad has on reducing the country’s housing deficit, according to Guatemala’s Chamber of Construction. However, others say the increased cashflow is pushing up the price of land, which adversely affects non-migrant households.

Experts highlight that while remittances enable some people to save, invest in education and contribute to the local economy, they are an unstable source of income that is often squandered due to a lack of financial information for recipients on how to manage the money.

“Yes, remittances can reduce poverty,” says Beatriz de Azurdia from the National Council of Migrant Services (CONAMIGUA). “But we need to take into consideration the risks migrants face and the abandonment kids feel, which can cause families to disintegrate and children to lack guidance. Also, the senders have little say over how the money is invested.”

To combat the latter, a Guatemalan company recently introduced an electronic remittances gift card, which allows migrants to specify how the money they send back is spent.

In July, the Guatemalan government launched a campaign outlining the risks of exploitation and death that illegal migrants face on their journey north. However, the lack of employment opportunities in Guatemala and many people’s desire to emulate the improved lifestyle of their neighbors, is keeping the American Dream of immigration alive.