Nicaragua, Trump, Deportations and the Affect on Family Remittances

In the face of the threatened migration crisis, Nicaragua should join the Central American Northern Triangle and Mexico in defining a strategy to face Trump

By Carlos F. Chamorro  (Confidencial)

HAVANA TIMES – The family remittances that Central Americans residing in the United States send to their countries probably won’t be affected by an inapplicable tax announced during President-elect Donald Trump’s electoral campaign, but they will feel the collateral impact of a rise in deportations.

Manuel Orozco, political scientist and researcher for the organization Inter-American Dialogue, calculates that as a result of Trump’s policies, deportations could increase by 20% over those of the Obama administration.  Half of deportees come from Central America, and although the number of Nicaraguans is considerably less, Orozco would like Ortega’s government to involve itself together with the rest of the region and Mexico in defining a joint strategy with which to face Trump.  For one thing, the deportations would reduce the flow of remittances, but in addition “it’s the obligations of the Nicaraguan state to protect its citizens,” he indicated.

Where are the winds of change pointing in Washington with a populist, rightist and nationalist president?

Manuel Orozco: They point in the direction of the nationalist style of populism.  There’s an orientation towards protectionism and insularity in the United States, together with a reversal of Obama’s policies in terms of Obamacare and topics of national security.  The Obama doctrine, made up of multilateralism and cooperation, will be reversed.  They’re also thinking of repealing the Dodd-Frank banking law that had a component of protection for the banking rights of citizens, as well as changing the immigration policies, among other things.

Is there any more clarity about what the Trump policies towards Latin America might be?

MO: At the moment, they’re looking for staff.  They’re going to apply a strategy that revolves around national security, and within that, the theme of immigration and also economic development. In terms of Latin America, the topic of democracy for example is going to be debated to some extent, in relation to Cuba and Venezuela and possibly Nicaragua.  But the predominant focus is going to be on strengthening security against drug trafficking and other international threats.

During his campaign Trump said he would deport 11 million undocumented immigrants.  Last week he stated that it would only be the three million who had criminal records.  But the official data indicates that really only some 600,000 fit under that category. What in reality can we expect?

MO: What can be expected is not a literal reading of what Trump proposes, but an interpretation of what he wants to do in relation to immigration. This means that – yes – he wants to strengthen the border and reduce undocumented immigration, and also increase the deportation of people who are undocumented.  This implies that they’re going to reorganize resources that already exist, without having to go to Congress to increase the volume of deportations.  We’re not talking about millions of people; nevertheless, it could be about 20% more than what Obama has done, for example.

What weight do the Central Americans have in the numbers of undocumented immigrants, both those who have already been deported, and who could potentially be deported?

MO: Citizens of Central America represent about half of all those deported, while making up about 35% of the undocumented.  Any increase in deportations will have great implications for Central Americans.  There are some three million undocumented Central Americans in the US, and the number of deportees has been around a hundred thousand per year.  This number may increase, and I don’t believe that it will increase exclusively with those people who have criminal records because they’re still serving their sentences. Instead I think they will be concentrating on certain categories of the economy where they are considered competition, such as slaughterhouse work or the farm sector.

In other words, Trump’s promise to expel the criminals isn’t necessarily certain or viable in practice since, as you say, they’re in prison.  Do you believe his policies will affect the people who are working and are sending remittances back to the region?

MO: Exactly – it’s already affecting those who are sending remittances.  The reality has been that although the volume of people deported has been fairly high – an average of 350,000 people a year under Obama’s government, half of whom are Mexicans – there’ve been quite a lot of people entering.

Around 400,000 Central Americans have left the region for the United States, and in fact some 140,000 are entering. This reflects the fact that Central America represents the second greatest world immigration crisis after Syria.  That reality is going to be confirmed by Trump, and this administration is going to have to identify ways of handling the problem.  While President Obama gave priority to formalizing the status of the undocumented, this administration is going to concern itself more to see how they can reduce the entry of migrants, and they’re going to find out that there’s a serious security problem in Central America. So, it’s possible that strategies like the Alliance for Prosperity might be increased, or that their financing is maintained.

The data indicates that the majority of the undocumented Central Americans are Salvadorans, Hondurans and Guatemalans; Nicaraguans are in fourth place, but there’re still a significant number of Nicaraguans who go to the United States and who also are sometimes deported.

Around 3,500 Nicaraguans have been deported from the U.S. That’s not a giant number compared to the 50,000 Guatemalans, but it’s substantial considering the scope of Nicaraguan emigration to the US, which is around 300,000.  Each year some 6,000 Nicaraguan enter the United States without documents.

The deportations will affect this population in the same way.  The difference has been that Nicaragua has an escape outlet to Costa Rica, where more than 15,000 Nicaraguan enter each year and the rate of success for entering is virtually 100%.  Nonetheless, total remittances from the 4 or 5 thousand Nicaraguans who enter the U.S. and send money home are about equal to those sent by Nicas living in Costa Rica.

The governments of the Central American northern triangle countries will meet with Mexico to coordinate a joint strategy in the face of Trump’s policies.  Should Nicaragua form part of that initiative, or should it continue on the sidelines as it is at present?

MO: Nicaragua should join in, because from the perspective of national interest, the protection of its citizens in any part of the world is an obligation, it’s the state’s responsibility. It should also involve itself in any strategy in which the rest of its neighbors are participating, even though Nicaraguans only represent a tenth of the deported.

What can we expect of Trump’s policies in relation to the remittances? He even spoke of establishing a tax on the remittances.  Is that viable?

No, it’s not viable.  Taxation of a payment transaction is already codified; you can’t establish a remittance tax based on the nationality.  For that reason, it’s not viable, technically or legally. Future changes in remittances have more to do with the deportations and the number of people that are entering.

Trump proclaimed in his campaign that he would look over all the free trade treaties beginning with NAFTA, which involves Mexico and Canada.  Would CAFTA – the Central American Free Trade Agreement – also be included in this initiative?

MO: Rhetorically, the objective of the Trump administration would be to review all the proposals and commercial ties contained in the free trade agreements; that would not only include NAFTA and CAFTA, but also the agreements with Chile, Colombia, etc.  In this moment, the general picture is that CAFTA hasn’t affected the U.S. – Central America relationship.  To a certain extent, NAFTA is said to have affected some of the small businesses in the United States, especially in the transportation sector for example.  So it’s possible that the revision process has more implications for Mexico than for Central America.  On the other hand, for the U.S. in general, CAFTA is a development strategy, so that given the small volume of exports to the United States – less than 30 billion annually – it probably won’t be affected.

For the Central American business sectors is the election of Trump good news or bad news?

MO: I believe it’s an opportunity.  This is one of the most important paradoxes of United States political history – that the person elected with a protectionist and isolationist position is an emblem of globalization, a tycoon with a global presence. In itself, this reflects a great contradiction and an ideological connotation within this anti-globalization movement.

The private sector can take advantage of the opportunity to strengthen investment via alliances with the US private sector.  Private enterprise in the United States is looking for a way to strengthen and protect its international space. Paradoxically, the Trump administration will look for a way to fortify the presence of the United States outside the country within a protectionist context.

What impact might the ongoing process of authoritarianism and the dismantling of democracy in our country have on U.S. – Nicaragua bilateral relations?

MO: The interpretation of this new government is going to be very conservative in relation to autocratic countries like Cuba, Nicaragua and Venezuela.  There’s a perspective of how to subordinate the topic of security to that of democracy.  Therefore, an administration like this one is going to raise the level of rhetoric and discourse against the autocrats while it maintains as its priority the theme of security.  Criticism of Nicaragua is going to be more vocal than it was with the Obama administration.  This means that whoever is chosen and positioned in the U.S. State Department is going to be openly critical of the Sandinista regime.

And the evolution of the law known as the Nica Act in Congress?  What might Trump’s position be?

MO: With a Republican Congress and Senate, the possibility that the Nica Act passes is very high.  The reality is that the Nicaraguan government isn’t well regarded, and as a result I believe that Congress is most probably going to pass this law. Paradoxically, what could happen is that some of the provisions are increased or that they strengthen the part that has to do with granting visas to people who are on some black list, or an increase of the diplomatic rhetoric, and not only in multilateral terms, but an increase in help for democracy in Nicaragua.