In recent years, the money Haitians abroad have sent back home in remittances has accounted for at least one third of Haiti’s overall economy. And despite the coronavirus pandemic driving unemployment to historic highs in the United States, remittances from the diaspora increased markedly last year.
As a nurse, Daniel Eugene has remained employed throughout the pandemic. The Miami-based essential worker estimates that he sent more than $5,000 to Haiti in the past year, which he said was an increase from the year before.
Paraphrasing a favorite adage, Eugene summed up his mentality toward sending money back home, during a tumultuous year for people of all nations, regardless of wealth.
“Two men may be crossing the river together, but one might still come out more wet,” said Eugene. “People in Haiti are still coming out worse off than in the U.S.”
Across the U.S., the pandemic has had disparate impacts on the diaspora, with some individuals continuing to experience financial hardship. But overall, the amount of remittances sent to Haiti last year increased by 14% over 2019 levels, according to Creative Associates International, a development organization that tracks remittances. Haiti’s remittance growth was larger than the average 6% growth for Latin America and the Caribbean.
Experts and Haitians living in the U.S. cited the growing economic need in Haiti, a kidnapping crisis that has demanded ransom payments and financial stability at home as key reasons behind this growth.
Remittances to Haiti have risen for a couple years, from $3.1 billion in 2018, to $3.3 billion in 2019. The $3.8 billion the diaspora sent back to Haiti in 2020 is a record high, according to the February 2021 Creative Associates report. The authors, Manuel Orozco and Jessica Spanswick, analyzed central bank figures from Latin American and Caribbean countries.
Haitians in U.S. send more money
In terms of countries where remittances originate, the U.S.-based diaspora sent the largest share of remittances by far. The share of remittances coming from the U.S. could have increased from 76%, to as high as 84%. However, Orozco said the latter number could be a high estimate, since central bank figures tend to underestimate remittance flows from countries like the Dominican Republic.
Chile had the next-largest share of remittances to Haiti at 5%, though overall, remittances from there declined by 20% from 2019 levels, per the February report.
In Chile, which is home to more than 150,000 Haitians, economic production declined by 6% in 2020 due in part to the pandemic and social unrest, per media reports.
Remittance growth to Haiti largely depended on economic conditions in the host country, Orozco said.
“The growth followed, predominantly, the global markets,” said Orozco, a political scientist who leads the Creative Associates Center for Migration and Economic Stabilization. “In some countries where the economic conditions were in worse shape, the growth of remittances from that country to Haiti did not increase significantly.”
In the U.S., the relatively large share of Haitians with legal status compared to immigrants from other countries in the region, coupled with their representation in essential industries like health care, could have helped stave off a decline in remittances, Orozco said. Undocumented employees, he said, were often the first to lose work during the pandemic.
Health care had one of the lowest unemployment rates last spring , and was the only sector where rates were equal for immigrants and U.S.-born residents.
The unemployment rate for all immigrant workers in the U.S. jumped sharply in the second and third quarters, to 20%. However, by the fourth quarter of the year, unemployment had returned to its first-quarter level of 7%, the Bureau of Labor Statistics reported.
But Orozco said the employment figures do not fully explain the rise in remittances to Haiti, which experienced political unrest, a continued scarcity of formal employment opportunities and the coronavirus pandemic.
“The Haitian diaspora felt a bigger obligation to continue sending money,” Orozco said. “The only explanation I have is that they prioritized sending money back home and [sent] more money because of the lockdowns, the scarcity in Haiti.”
Financial need, kidnappings, monetary policy stretch diaspora wallets
2020 was a tumultuous year for Haiti, with COVID-19 and political instability further weakening the country’s economy. After contracting by 1.7% in 2019, Haiti’s economic production, or gross domestic product (GDP), declined by another 3.8% last year, the World Bank reported in April.
As he stood in line at a computer repair store on Rogers Avenue in Flatbush, Gary Gava Valme said he has not stopped sending money home since last year. His family needs the financial assistance.
“I have two kids in Haiti, my wife’s in Haiti,” Gava Valme said, as he waited his turn at the counter. “I send money for them every month.”
Roughly a third of Haiti’s GDP comes from remittances, making it the most remittance-dependent economy in the Western hemisphere by more than 10%, according to the Economic Commission for Latin America and the Caribbean (ECLAC).
But last fall, remittance recipients received bad news, when tighter currency regulation by the government led to a rise in value of the gourde. This also meant recipients received less gourdes at money transfer stations, The Haitian Times reported, and had less purchasing power as prices in the broader economy stayed relatively constant. From August to October 2020, the gourde roughly doubled in value, to 62 gourdes against the dollar.
Haiti’s currency has lost some value since then, and was at 87 gourdes to a dollar as of May 2021.
For the diaspora, this means the amount of money they send to family and friends purchased fewer goods.
“We’ve been ripped off by the government in two different ways,” said Eugene, referencing the $1.50 transfer fee on every transaction meant to fund schools. “We end up sending more money.”
The Haitian diaspora has not only sent money to help people eat, but also, increasingly to help friends or family escape danger.
In one instance, Eugene received word through a Whatsapp group chat that a mutual friend had been kidnapped. He contributed $100 to pay the ransom, pitching in with other friends who knew the victim – an acquaintance Eugene said he used to play soccer with.
As the coronavirus spread worldwide last year, kidnappings by armed gangs increased in Haiti. In the first half of 2020 alone, 161 kidnapping incidents were reported, a 200% increase from the prior year, the United Nations reported.
Prominent faith leaders and visitors from the diaspora have become victims of kidnapping, prompting many to reconsider travel to Haiti, according to media reports. In some cases, kidnappers have demanded hundreds of thousands of dollars in ransom money.
“I’m thinking the diaspora is not only sending money to their people, but they’re actually financing the kidnapping,” said Eugene. “The ransom might be one of the reasons why you see people sending more money to Haiti.”
Not everyone has been able to resume supporting friends and family in Haiti as much as they did before the pandemic, however.
Carline Dormatus said she has not sent money back to family in Haiti since March 2020, when she lost her job as a home health aide after her patient got the coronavirus.
“What I’m getting from unemployment isn’t covering my bills, so I can’t,” said Dormatus, 59, of Flatbush. The checks, she said, do not even cover half of her $2,250 monthly rent.
“I know they’re struggling back there, but I can’t, I’m struggling myself,” said Dormatus, who was born in Haiti.
[Editor’s Note: This article was updated at 2:40 p.m. on May 14 to clarify the data on share of remittances originating from the U.S.]
Thank you for this excellent article. I wonder how much of the increase went to ransom payments for kidnappers!