The Diplomat
Ecuador received more than US$1 billion in 2020 from its migrants in Spain, according to a study.
According to the Spanish startup Sendity, the digital money transfer service in the Spain-Latin America corridor, Ecuador, Colombia, Dominican Republic and Peru are the five Latin American countries with the highest proportion of remittances received from Spain.
Specifically, Ecuador received $1,082.1 million from Spain alone in 2020. This amount represents between half and a third of the total amount received in remittances from around the world, some $2,848 million, equivalent to 2.74% of the country’s GDP. There are more than 400,000 Ecuadorians living in Spain, representing the third largest foreign community, whose situation will be discussed during next week’s official visit to Madrid by the President of Ecuador, Guillermo Lasso.
In second place is Colombia, which in 2020 received $840.6 million in remittances from Spain, out of a total of $5,355.2 million. The Dominican Republic and Peru received US$668.5 million and US$407.4 million, respectively, and Bolivia, a total of US$299.1 million.
According to Sendity, the economies of many developing countries depend, to a large extent, on the money they receive from migrants living abroad. In the case of Latin America, migration flows have increased significantly, which has translated into an increase in remittances. The smaller economies in the region tend to be more economically dependent on their migrants.
The fundamental importance of remittances in these countries lies in their contribution to sustaining families. They are also a determining factor for government macroeconomic policy, since they allow the country’s current account deficit to widen and help stabilize the exchange rate, which facilitates the acquisition of goods from abroad and the development of exports. These factors also have a direct impact on investment to improve the necessary infrastructure, which in turn generates employment and the movement of economies.
