An exodus of nearly 8 million Venezuelan migrants who have fled poverty and political turmoil is boosting the economies of other countries across South America, two studies published by leading international financial institutions have found.
The foreign workforce will lift the economies of their main host nations in Latin America and the Caribbean by 0.10-0.25% on average each year from 2017 until 2030, according to the research.
If access to jobs were increased for Venezuelans migrants the economic benefits could be greater still, the World Bank, the Inter-American Development Bank, the Organization for Economic Cooperation and Development (OECD) and the UN Agency for Refugees (UNHCR) concluded.
“This study evidences what we already knew: migration is good business,” said Ronal Rodríguez, a Colombian researcher studying the impact of Venezuelan migration at Bogotá’s Rosario University. “Receiving migrants makes us a better country and allows us to continue growing. It’s as simple as that.”
The Venezuelan migration crisis is now the largest in the history of Latin America and exceeds the number of people displaced from war-torn Syria. Venezuelans began fleeing their country en masse when its economy collapsed in 2014, generating rampant inflation, poverty and insecurity.
More than 6.5 million of the 7.7 million people who have left Venezuela have sought a better life in Latin American and the Caribbean – particularly in Brazil, Chile, Colombia, Ecuador and Peru.
While Venezuelans are often blamed for straining healthcare systems and economies across the region, their contribution to the labour force actually benefits local economies by filling undesirable jobs and increasing local demand for goods and services, which increases tax revenue, the economists concluded.
Public services offered to migrants increase state spending by 0.1-0.5% of GDP, but those costs fall quickly and are eventually exceeded by the additional economic growth, the study found.
In Colombia, the arrival of 3 million Venezuelans has helped formalise the country’s economy, as migrants are more likely to take low-paid official jobs than Colombians who prefer to work cash-in-hand in the shadow economy, Rodríguez said.
Venezuelans have also filled vacancies and addressed labour shortages for undesirable jobs, such as bus drivers.
“This adds to our tax base, which is particularly important due to our ageing economy”, Rodríguez said.
South American countries are struggling with low economic growth and the World Bank predicts the region to increase by 2% in 2023, lower than any other region in the world.
Politicians could speed up their lagging economic growth by better integrating migrants into their local communities and job market, the researchers found.
South American countries have been pragmatic in introducing special permits which allow Venezuelans to work legally but xenophobia is still a barrier preventing Venezuelans from finding jobs. 30% of Venezuelans – particularly women and young people – reported being discriminated against.
Venezuelan migrants are commonly forced to work informally and are overqualified for their jobs as their studies and skills are not recognised abroad. It is not uncommon for trained professionals such as lawyers to work as waiters to make ends meet across the border, limiting their income and the economic benefit for their host country.
“For these benefits to materialise, specific policies are essential that promote the economic inclusion of people,” said Carolina Mejía Mantilla, an author of the study carried out by the World Bank and UNHCR.
It is not just the economic benefit of Venezuelan migrants that is often overlooked in Latin America where migrants receive predominantly negative media coverage but also their cultural impact, Rodríguez said.
“Beyond economics, Venezuelans are bringing about a socio-cultural transformation. They have improved the gastronomy of Colombia with their fusion of European flavours that are outside of Colombia’s traditional cuisine and contributed to greater diversity of live music,” Rodríguez said.
