For the first time since October 2008, remittances from Salvadorans living abroad are on the rise. The Salvadoran Central Bank reports that Salvadorans in the U.S. and other countries sent family members $343.2 million in March 2010, up 8.7% from March 2009. In the first quarter of 2010, remittances totaled $848.4 million, up 0.60% from the same period last year.
The Latin American Herald Tribune reports that 240,000 Salvadorans live and work under the Temporary Protected Status (TPS), and send money to their families back home. Another 2.25 million undocumented Salvadorans live and work in the U.S. and contribute to the family finances.
Remittances, which account for 17% of the Salvadoran GDP, have decreased over the past year and half due to the slump in the global economy. Remittances are El Salvador’s largest single source of income and the recent downturn has affected all levels of the Salvadoran economy.
Economic support from family members living abroad has been useful in the short-term, and even helped some Salvadorans enjoy a middle-class lifestyle. Unless they are properly invested, however, remittances are not a long-term solution for economic development. In fact, the drain on the labor-pool, one of El Salvador’s greatest assets, could be detrimental to the country’s economic and social development.