Opportunities Generated by Remittances for Salvadoran Industrial and Financial Services Companies

Abstract

During the last decades, remittances have become an important source of income for developing economies due to the large number of their citizens emigrating to work in developed countries. In their countries of origin, these people do not have the necessary working opportunities to provide and satisfy their families’ basic subsistence needs.

In Latin America, this phenomenon has increased more during the last decades, so the governments have given importance to the statistics of remittances since their economies depend largely on these. But not everything is positive since most Latin American countries lack of strong productive structures that cover the internal demand of consumer goods. This makes the importation of consumer goods expensive.

In the families, most remittances are used for consumption and this makes that the money people get from abroad goes back out through the purchase of imported products. El Salvador is not the exception. This phenomenon causes the country to lose the opportunity to increase its economy since most remittances are not kept in the country’s productive and financial system.