by Hannes Warnecke-Berger | July 1, 2020
Remittances are the dominant factor in the contemporary economy of El Salvador, which is enjoying a new comparative advantage in the international economic system—the export of cheap labor to the Global North and particularly the United States. The Salvadoran economy is part of a transnational economic space, but this space is perverse: Although the poor are nominally receiving more money, remittances cause them to be caught in a vicious cycle of economic instability. At the same time, the elites are able to access remittances indirectly by becoming a Keynesian oligarchy—an oligarchy that extracts wealth by controlling the demand structure of the economy instead of production. Remittances represent bread and butter for the poor and a vehicle for transnationalization for the rich, and this leads to a new stasis of elite rule: remittances provoke the rescaling of social conflicts in favor of elites. Transnationalism in this regard must be interpreted as an elite strategy for suppressing the bargaining power of the subaltern class. In this transnational remittances economy, opportunities for the subaltern class and migrants to participate directly in reshaping this economic space are limited or nonexistent. As a consequence, they must rely on translocal moral economies linking migrants with their families at home, where they are still able to impose some control. Meanwhile, elites foster transnationalism by dismantling these very modes of control. In this sense, remittances are the silver bullet for facilitating neoliberalism in the Global South. In El Salvador, they produce ultrastability for the oligarchy and chaos for the poor.
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Labels: Economic Elite, El Salvador, May 2020 issue, Social Inequality
