Migration as a development opportunity: insights from Venezuela

“Migration is a powerful catalyst for development…”

…to quote Diego Beltrand, the Director General’s Special Envoy for the Regional Response to the Venezuela Situation at the International Organization for Migration (IOM). A recent regional study conducted by the IOM reveals the key factors contributing to this, highlighting the importance of legal residence status, integration in the formal labour market, access to financial resources and the elimination of prejudice and discrimination.

Whether, following what was widely regarded as an illegitimate re-election, Nicolás Maduro being sworn in as president on 10 January will see more Venezuelans emigrate largely depends on the country’s economic and political development. According to IOM estimates, there are currently close to 7.8 million Venezuelans living abroad. This exodus began during the catastrophic economic crisis of 2015/16, further escalating in the wake of the pandemic, political persecution and repression. Of the around one million people who have left Venezuela every single year since April 2018, a total of 91 percent of them now live in other Latin American countries, the majority having moved to neighbouring Colombia (2.9 million), followed by Peru (1.6 million), and Brazil (627,000).

Who is leaving the country?

Venezuela is an immigration country in which each and every person has their own tale of migration – stories of emigration and immigration that span the globe and the generations. For members of the middle and upper classes, having two passports is more the rule than the exception. However, the current situation, with people fleeing the country to escape economic hardship and the authoritarian regime, is new – and these days you might even hear people say: “We used to fly to Miami for the shopping, now we go for the work”.

It was therefore the well-educated Venezuelans who left first, with the less qualified following suit – as the IOM Peru Country Report clearly shows. If at all possible, migrants will tend to go where they already have family, friends and professional contacts. While the more privileged travel by plane, the less privileged try their luck in neighbouring countries or embark on the treacherous route to the north via the Darién Gap. The majority of these migrants are of working age, often travelling with one or two children, and there are generally equal numbers of men and women – in short, nothing out of the ordinary.

Here to stay

Around 90 percent of the Venezuelans living in Colombia and 70 percent of those in Peru intend to stay for the long term – this in itself is reason enough to include them in future planning. In general, people in Latin America enjoy significant freedom of movement – where the problems begin, however, is with permanent residence status. Just 65 percent of the Venezuelans living in Peru have a residence or work permit. The reasons why they are not in possession of these documents is the bureaucratic jungle and long waiting times. Deportations are unheard of.

Around 50 percent of Venezuelan immigrants in Peru and Colombia have an academic or professional vocational qualification. Yet, only 34 percent of men and 20 percent of women are in formal employment, with the majority working in the informal sector or in self-employment. Despite these circumstances, Venezuelans still make a considerable contribution to the economy, generating 1.35 percent and 1.91 of the total tax revenue in Peru and in Colombia, respectively. In all the countries included in the IOM study, these revenues far exceed the social investment in immigrants for things like state healthcare and school education. In addition, many countries receive international assistance for the reception and integration of migrants. In other words, from a purely economic perspective, the status quo already benefits the receiving countries.

Unlocking potential and removing obstacles

So what impact would it have on the situation if immigrants were granted legal residence status and skills and qualifications recognition was improved, enabling them to be integrated into the formal labour market with all the mandatory social insurance contributions that this entails? The IOM study comes to the clear conclusion that, for Peru and Colombia, this would result in a potential increase in tax revenues of over 50 percent, while the equivalent increase for Chile would be around 25 percent and for Costa Rica 20 percent.

Another issue that hinders the economic participation of immigrants is the limited or non-existent access to financial products such as bank accounts or loans. This is partly due to their lack of legal status but can also be attributed to national differences in banking products. In Venezuela, for instance, credit cards are widely used, whereas in Peru and Colombia they play a far more minor role.

Lastly, despite living in what appears to be a similar cultural environment, immigrants still have to contend with prejudice and discrimination. Apart from economic restrictions, there are also social barriers that need to be dismantled for immigrants to be able to make a fair and equal contribution to their new home country.

Presenting migration as an opportunity on the global stage

In 2025, Colombia will be chairing the Global Forum on Migration and Development. As a region which experiences both emigration and immigration in equal measure, Latin America and the Caribbean are well equipped to highlight, at international level, the role migration can play in economic growth.