The Consequences Of Emigration In Venezuela

The consequences of emigration in Venezuela

It is impossible not to recognize that at present the problem of Venezuelan migration in the country brings with it consequences both on the issue of security and on the economic-labor side. Given this event, it is valid to verify various opinions about the subject and seek possible solutions to these facts.

First, we must take into account that a large percentage of this migration are qualified professionals who are forced to leave their country due to the growing economic and food crisis.

The Lima Chamber of Commerce gives us a brief review of this:

Fleeing his country turns out to be the only option for thousands of Venezuelans who oppose the dictatorship of Nicolás Maduro, and, in recent years, Venezuela has been facing a strong economic crisis. Therefore, and under the context of emigrating from Venezuela, around 46.000 Venezuelans have found in Peru a place to live. Therefore, and given the growing Venezuelan migratory wave in the country, specialists analyze the social, labor and economic implication that this event has in Peruvian land.

Second, the Chamber of Commerce of Lima considers that, despite the seriousness of the situation of that country, for Peru the insertion of businesses made by Venezuelans may be positive because they inject money into the Peruvian economy.

On this high migration there are many opinions that are mainly poured into the issue of employability and economic involvement, generating a climate of concern about the lack of job opportunities and the exploitation of foreign labor in the country.

For all the aforementioned we ask ourselves the following questions: Should we see Venezuelan migration as a problem that directly hits the country’s economy and avoid more income from Venezuelans? Or, on the contrary, can you take advantage of this migration as an opportunity to grow and start the already hit local economy?

From our perspective we consider that we have a great opportunity with this migratory wave to enhance the Peruvian economy based on the benefits that would be obtained in the long term without mentioning that there are current normal problems of the recent migration. These problems fall more than anything because of the increase in the informal sector. According to Valdiglesias, "the duration of these problems will depend on the quality of public policies that are implemented to achieve the benefits of immigration".

Venezuelan migration and positive effects on the Peruvian economy

First World countries such as the United States, Canada, among others, have favored migratory waves in their economies. It is correct to remember that Peruvian history has gone through several similar moments such as Chinese and Japanese immigration because of World War II. In turn, it is necessary to realize that these immigration caused positive effects on the Peruvian economy in the long term. That is why believing that Venezuelan migration is only stagnating the current economy is an argument that lacks validity due to the country’s own economic history.

Valdiglesias, points out that, at an initial point, the labor market is beaten in the face of the increase in supply generating a salary fall. However, the theory predicts an increase in labor demand because companies now have more public to attack. As a result of all this, an increase in employment, money and economy size will be obtained.

It is logical to indicate that what Valdiglesias comments is true and confirmed thanks to the theory of supply and demand. This theory makes us see that the main consequence of the Venezuelan exodus towards our country in the short term is the fall of wages due to the increase in the population seeking employment or informal. This effect hits all those involved within the economically active population, both Peruvians and foreigners.

In his research, Valdiglesias comments on the matter:

While a labor supply shock was indicated that makes wages levels, this would then be counteracted by a work demand clash through capital stocks increases, by companies. In fact, immigration theory indicates that this by itself increases the demand for work, counteracting the initial effects of labor overages; However, this effect would be in the medium or long term, depending on the type of economy.

Indeed the consequences are different according to the region and country. These distinctions are based on internal variables such as base salaries, employment laws, among others. An example of this is the case of Russian migration in Israel. A study on this indicated that I take 4 to 7 years counteract the effects of the average salary decrease.

There are currently more than 800,000 Venezuelans in Peru concentrating the majority in the capital, Lima. A BBVA Research report indicates that most Venezuelans are in productive age and have mostly a greater number of years of studies than the average of the Peruvian population. The report indicates that in 2018 the potential GDP grew 4.4%, almost a percentage point more than what would have increased if the migration of Venezuelan citizens would not have occurred and that in 2019 the growth of the potential GDP including migration is estimated at 3.7%. Without it, it amounts to 3.two%.

These current reports are already showing the positive side of Venezuelan migration and its medium and long term effects on our economy.