Could Venezuela’s Loss Be Latin America’s Gain?

In recent years, more than 4.7 million Venezuelans have fled their country—most of them since 2018. The exodus from Venezuela registers only slightly behind that from Syria as the second-largest forced displacement crisis anywhere in the world today and will likely surpass the Syrian one by the end of this year.

The severity of the crisis in Venezuela is undeniable. On top of ongoing political persecution of those who participate in protests and opposition activity against the country’s authoritarian government, Venezuela’s economy, once among the most prosperous in Latin America, has imploded. Inflation exceeded 1 million percent, and GDP has contracted by almost two-thirds over the past six years. In this environment, malnutrition is widespread, and the health care system has collapsed; hospitals now lack basic medical supplies such as gloves, syringes, and disinfectant.

Yet unlike many other displacement crises that have spawned mass migration to Europe or the United States, most Venezuelans who have fled are staying close to home, with some 80 percent of Venezuelan migrants within Latin America. Those Venezuelans who have moved elsewhere—mostly to the United States or Spain—have moved gradually over a period of several years, rather than in a single major migration surge, as with the Syrian and Afghan refugee flows to Europe in 2015-2016 and the Central American flows to the United States in 2014 and 2019. Today, almost every country in Latin America hosts tens of thousands of Venezuelan migrants, and a few, such as Colombia, Peru, Ecuador, Chile, Brazil, and Argentina, host between several hundred thousand and well over 1 million.

And so far, host governments have handled these large inflows of Venezuelans fairly well, with limited international assistance. This may be Latin America’s lesson to the world. At a time when policymakers are throwing up barriers to migration, Latin American countries have largely opened their doors to those fleeing Venezuela, offered them access to basic education and health care, and tried to integrate them into their economies and local communities.

The response isn’t always perfect. As a forthcoming Migration Policy Institute report shows, there are often hidden barriers to registering for school, getting a job, receiving medical care, or getting a professional degree recognized. But overall the response has been much more flexible than in other places around the world. And survey results indicate that most Venezuelan adults are working in the countries where they have moved. The lack of a language barrier in countries other than Brazil and Guyana facilitates labor market integration, of course, but so does the simple fact that Venezuelans have been free to move wherever they want within countries, often with legal documents that allow them to work.

The Latin American response stands in sharp contrast to the way humanitarian crises elsewhere in the world have usually been dealt with. Normally, the international community declares a crisis and steps in early to designate those fleeing as refugees. United Nations agencies build refugee camps and supply needed services, while host governments (with a few notable exceptions) restrict access to work and public schools. Host governments fear being overwhelmed by massive inflows that can create a backlash from local populations. Keeping incoming populations separated allows the international community to shoulder the costs of maintaining the refugees and mitigates political fallout.

In contrast, the response in Latin America has been almost wholly developed by national governments, and most countries have emphasized self-reliance, short-term legal status, and integration over refugee protection. Governments have largely treated Venezuelans as migrants instead of refugees, with the partial exceptions of Brazil and Mexico, which have granted asylum to more than 20,000 and more than 8,000 Venezuelans, respectively. This is largely because many countries lack fully developed asylum systems, and they were also worried about provoking a backlash from host communities struggling with some of the same poverty that Venezuelan migrants are facing.

Instead of refugee protection, Colombia has provided special temporary residency permits to almost 600,000 Venezuelans, while Peru has done the same for more than 400,000 people and Brazil for nearly 100,000. These permits are careful balancing acts, since they provide legal protection and the right to work, but also suggest that the government is providing only a short-term measure that will be lifted as soon as the Venezuelan crisis is over. Colombia has now gone further by creating a special employment-based permit for those with a job in the formal economy, and Ecuador has just launched a wide-ranging campaign to give temporary residence to many Venezuelans living in the country illegally.

In theory, most Venezuelan migrants in Latin America have far fewer rights than refugees elsewhere in the world—at best, they get temporary permits to stay and work in host countries, but in practice most have been able to find employment, housing, schools, and basic health care quickly. They often start at the bottom rung of the economy, but they are integrated into local communities rather than singled out as a population in need of help. They may have fewer formal protections than migrants elsewhere in the world who are granted refugee protection, but in reality they may have a faster and easier pathway to setting up a new life.

The reasons for this welcoming stance are complex. Most governments in the region had banded together to condemn the Venezuelan government’s authoritarian turn, so it marked an act of political literarity with the opposition to welcome those fleeing the regime. It was also an act of solidarity with the Venezuelan people, who welcomed migrants and refugees from elsewhere in Latin America during better times in Venezuela.

Moreoever, there was a recognition that borders are porous in the region, and it is almost impossible to stop people from crossing them if they desperately want to. Latin America has a history of regional mobility agreements and expansive refugee law, though this framework had not really been tested before. And, of course, it was easier to offer short-term legal status or employment-based visas rather than asylum or refugee status.

Studies now show that this migration, as large and unexpected as it was, is benefiting the receiving countries. Chile’s Central Bank revised growth upward to reflect the inflow of more than 370,000 Venezuelans, who are expanding the labor force and contributing needed human capital. Studies by the World Bank and the private bank BBVA have shown similar results for Peru, where more than 850,000 Venezuelans have settled.

In part, this is because the Venezuelan migrant population tends to be more highly educated than the native-born population in receiving countries. In Chile, for example, just over 20 percent of the adult population had an advanced degree—either university studies or a technical certificate–in 2017, while more than 50 percent of Venezuelan migrants did, according to one survey.

While 31 percent of Peru’s working-age population had an advanced degree in 2018, 42 percent of the Venezuelan migrant population did. Increasingly, countries in the region are trying to find ways to recognize professional credentials earned outside their borders in order to take advantage of the talent that Venezuelan doctors, dentists, nurses, teachers, engineers, and other professionals bring—skills that are often in short supply in host countries.

But this may not be the whole story. Recent migrants also fill labor market niches where there is existing demand, such as coffee pickers in Colombia or food preparers in Peru. And there is an extensive literature suggesting that immigrants are more likely to pursue entrepreneurship than native-born workers, including one recent study in Chile.

But while this migration flow may have large overall benefits for the economies of host countries, it also generates significant strains on public services, creates a shortage of housing in some cities, and generates fears of job competition. While studies do not yet exist showing the extent to which these fears are rooted in reality, the fears themselves are widespread.

It is very possible, for example, that this migration is bringing overall economic benefits to countries but depressing wages in specific sectors where there is a great deal of labor supply, such as construction. And schools and emergency rooms that were already overcrowded in many Latin American cities have only become more congested with the arrival of recent immigrants. Polls show that citizens in some of the principal host countries are growing restless about the unending arrivals. The lack of clarity about when this flow will end compounds the anxiety of the public and resulting political pressures on governments.

Responding to this changing mood, several governments have imposed entry restrictions on Venezuelans over the past year, and it is becoming harder in many countries to get even temporary legal status. This has not necessarily slowed the outflow, but it has meant that many more Venezuelan migrants cross borders illegally and then live in the shadows.

A year ago, a majority of Venezuelans living in neighboring countries had obtained some form of legal status from their host government; today, it’s probably just under half. That may compound the root problem of inequality in host societies rather than fixing it, since migrants who lack legal documents tend to be willing to work for lower pay—but imposing restrictions helps the public feel its political leaders are restoring a sense of order.

Ironically, what made the Latin American response so successful at the beginning—its local, almost spontaneous nature, with little presence or pressure from the international community—may actually be problematic going forward. As the burden for providing education, health care, and housing to tens of thousands of new migrants increases—and as workers fear competition from growing numbers of Venezuelan immigrants—it will be increasingly important that the international community provide support to help these countries deal with their role in absorbing a vast exodus.

The U.N. system, international nongovernmental organizations, international development banks, and donor governments have now started to respond. They have pledged over $384 million   for international relief efforts, and hundreds of millions of dollars more in loans and concessional grants from the World Bank and Inter-American Development Bank are now in the pipeline. It’s only a part of what is needed, but it is an important start.

Rather than refugee camps and temporary schools, the countries in the region need to upgrade infrastructure for schools and medical facilities, implement measures to unleash investment for housing construction, and undertake efforts to strengthen financial access, entrepreneurship, and job creation. In most cases, national and local governments and local civil society organizations need to spearhead these efforts instead of international organizations. To be politically viable and address overarching, systemic weaknesses, they must benefit both migrants and host communities equally.

Latin American countries have managed this crisis well so far, and most of the countries could see long-term benefits in labor market and economic growth as a result. But international support will be crucial in helping them deal with the significant costs for services and infrastructure and helping them to maintain a degree of openness to those fleeing Venezuela. Otherwise, this unique and encouraging approach to dealing with a regional displacement crisis could provoke a political crisis for well-meaning host governments.