With appropriate policies, the country can transform this challenge into an opportunity for all of its inhabitants
- Venezuelan migrants and refugees could contribute more than 2.2 billion Peruvian soles in tax revenue over the next five years.
- Labor productivity could increase by 3.2 percent thanks to the large number of migrants in the country in 2018
- As consumers and workers, Venezuelan immigrants contributed 8 percent of GDP growth in 2018 according to the World Bank and Peru’s Central Reserve Bank.
- This contribution is largely because the Venezuelan population is young and skilled. Fifty-seven percent of female working-age Venezuelans in Peru have some tertiary education.
LIMA, November 26, 2019 – Venezuelan migrants and refugees represent a major economic opportunity for Peru, have the potential to raise the country’s productive capacity and significantly drive growth, according to a World Bank study presented today.
Making this opportunity a reality requires adapting public policies and institutions to adequately integrate the Venezuelan migrant and refugee population into the Peruvian economy and society.
This is the conclusion of the report “An Opportunity for All: Venezuelan Migrants and Refugees and Peru’s Future Development,” which the World Bank released today as part of a research series on Venezuelan migration in Latin America and the Caribbean. The series also includes an analysis of the situation in Colombia, carried out in 2018, and in Ecuador, which will be published in early 2020.
Migration from Venezuela is unprecedented in the recent history of Latin America and the Caribbean. An estimated four million people have fled Venezuela to escape the economic, social and political crisis that has devastated the country’s economy, public safety and living standards. Some 870,000 Venezuelans have migrated to Peru since early 2017.
The report acknowledges that assisting such a large group of people poses a challenge for public services in the recipient communities. Nevertheless, services have managed to meet this challenge.
For example, the study finds that of the total estimated demand for 2019, the Peruvian public education system has already incorporated some 35,000 Venezuelan students, allowing many of them to enroll after the school year began to avoid falling behind in their studies.
Demand in the health sector has also been high. In 2018, a single healthcare center in Lima received more than 15,000 visits from Venezuelans, representing nearly a fourth of the total population served by that center.
Despite this, the potential benefits of the social and economic integration of Venezuelan migrants and refugees far exceed the costs of doing so.
Despite working informally and receiving lower wages than local workers, Venezuelan immigrants could generate tax revenues totaling 2.256 billion Peruvian soles annually between 2019 and 2025, on average, thanks to the rise in aggregate demand and tax collection, according to the study.
Additionally, the added value of labor productivity could increase by 3.2 percent due to the large influx of migrants and refugees in the country in 2018.
“Peru has acted with solidarity in response to the significant needs of the Venezuelan migrant and refugee population. Today there is a unique opportunity to channel their immense potential to invigorate the country’s economy, transforming this challenge into an opportunity for all,” said Marianne Fay, World Bank Director for Bolivia, Chile, Ecuador and Peru.
This potential will only materialize if the measures necessary for their adequate integration are adopted, however. These measures have become increasingly urgent in an environment of growing discrimination against Venezuelans, which is often associated with perceptions about a lack of safety and appropriation of services. These perceptions are not supported by the data.
To the contrary, evidence from Colombia and Peru demonstrates that crime in recipient countries has not increased due to the arrival of migrants. Rather, estimates show that their arrival could drive growth and enrich the diversity of these countries and communities.
“Despite the major influx of Venezuelans, sufficient support has not been mobilized, unlike in similar situations around the world. We are calling on the international community to join forces to transform this humanitarian crisis into a development opportunity for the migrant and refugee population, as well as for the recipient communities,” said Paula Rossiasco, Senior Social Development Specialist at the World Bank and co-leader of the research team.
Drawing on quantitative and qualitative data, the study analyzes the characteristics, challenges and opportunities of Venezuelan immigration in Peru, as well as the institutional framework for the response.
For example, it found that the Venezuelan population arriving in Peru is overwhelmingly young (42 percent are aged 18 to 29), come mainly from urban areas and are highly qualified. Fifty-seven percent of those of working age have some tertiary education, half of which have a college degree.
The analysis seeks to contribute to the development of response plans, strengthen multisector coordination mechanisms and channel sufficient resources to meet the needs of recipient communities.
Making this response a reality demands urgent actions. These include:
- Adapting the institutional and legal system to facilitate the integration of migrants and refugees;
- Expanding the supply of services for everyone in the main recipient areas;
- Increasing support for the most vulnerable migrant population; and
- Dispelling myths that engender discrimination and xenophobia.
The World Bank supports the countries that receive Venezuelan migrants through evidence-based research, technical assistance for the implementation of response policies, financial resources and its ability to convene parties to strengthen alliances and mobilize resources and actions to benefit the migrant and refugee population and that of recipient countries.
The report on Venezuelan migration to Colombia contributed to the development of public policies that facilitate migrants’ integration into the Colombian economy and society. It also helped to obtain global concessional financing to meet needs associated with Venezuelan migration.
World Bank assistance is based on its extensive global experience with similar situations, such as the crisis in Syria. It focuses on the most pressing needs, such as the adaptation of the institutional and legal response system and support to recipient communities and the migrant population, generating an enabling environment for public policymaking.
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