Nicaragua Sees Nearly $1 Billion in Remittances from the U.S. in 3 Months NTI OCON/AFP via Getty Images

The communist dictatorship of Nicaragua saw a growth of nearly 12 percent in the amount of remittance money emigrants sent to the country during the first quarter of 2024, mainly driven by remittances sent from the United States, according to a report published by the Nicaraguan newspaper La Prensa on Sunday.

According to statistics from the Central Bank of Nicaragua (BCN), remittances sent to the country during the first three months of 2024 totaled $1.14 billion, marking an 11.8-percent increase from 2023's $1.02 billion in the same time period.

Of the $1.14 billion received in the first quarter of 2024, the report states, $930.7 million came from the United States, representing a staggering 81.6 percent of the total. The increase, according to BCN, means Nicaragua remains the Central American country with the most growth in remittances received.

Since 2023, Nicaragua has experienced a dramatic upsurge in the amount of remittance funding received by locals from Nicaraguan citizens abroad who have either fled or been banished from the communist regime. Dictator Daniel Ortega turned remittances into a crucial funding resource for the economically-ailing regime.

La Prensa estimated that some 800,000 Nicaraguas have left their country in recent years due to Ortega’s growing repression after the April 2018 protests, which saw thousands of Nicaraguan citizens flock to the streets to demand the end of communism in their country.

In 2023, Nicaragua received a record-breaking 4.32 billion euros (roughly $4.6 billion) in family remittances, an amount that represented nearly 30 percent of Nicaragua’s Gross Domestic Product (GDP). Of the total, $3.56 billion came from the United States. In 2022, Nicaragua received a total of $3.22 billion in remittances, or 23 percent of its GDP.

While the overwhelming majority of the remittances came from the United States, Costa Rica, Spain, Panama, and Canada were all listed as top countries of origin. All five countries collectively amounted to 97.4 percent of all remittances sent.

Reports published in 2023 detailed how the Ortega regime benefits both economically and politically from the increase in remittances.

Nicaraguan analyst José Dávila explained to the outlet Nicaragua Investiga at the time that Ortega's main benefit from the migrant crisis caused by his communist regime — and the surge in remittances it has led to — is that it calms internal unrest.

“It seems to be the perfect business of the regime that Nicaraguans leave en masse in search of freedom and then send remittances to their families,” Dávila said.

Nicaraguan economist Enrique Sáenz stressed that remittances “are serving as social policy” for the communist regime, as the increase in economic activity means that Ortega does not have to “lift a finger” in terms of wage and social policy.

“These expenditures in consumption contribute to the fact that Nicaraguan businesses – from the neighborhood beauty salon, the grocery store, the barber shop, to the supermarket or the bean and corn producers, etc. – see a growing market through the income of these families, who, without the remittances, would not be able to buy,” he continued. “This contributes to mitigate the social and political unrest.”

Sáenz also stressed that the goods or services paid for with remittances generate direct income to the regime, as all of them are subject to taxation such as the Value Added Tax (VAT), which helps the communist regime balance its budget.

“This definitely helps the Nicaraguan economy in the sense that it finances household consumption and within that consumption many items pay taxes, either the fixed fee or value added,” Sáenz said, “so Ortega also benefits in some way by taxing these transactions that are financed with remittances, and that helps tax revenues.”

Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.

Source link