Almost $4 billion has been sent home to Cuenca in the last decade from Ecuadorians living overseas, mostly in the U.S. and southern Europe. The money has fueled unprecedented growth in construction and new businesses and helped many families achieve middle class status.
On a per capita basis, Cuenca has benefited more than any city in Ecuador from money sent from overseas, according to Ecuador’s Central Bank. The city has received 14.2% of all money sent home to Ecuador, or $6,700 per person in the last 10 years. In the same period, Guayaquil and Quito received $2,280 and $1,553 respectively.
Experts say the money will continue to flow into Cuenca.
“The income has dramatically changed things for the better in Cuenca, and not just for the families receiving it,” says Quito financial consultant Carlos Segovia. “It has built thousands of new houses and condos, brought in more tourists and foreign residents and has generally put Cuenca on the world map.”
Segovia says the money is still coming, although the flow is down from several years ago. “It is not what it was in 2006 and 2007 but it is still substantial and it has actually increased over the last two years.”
According to Segovia, the money should provide a “soft landing” for Cuenca if there is a sharp downturn in the Ecuadorian economy. “I believe we will see some hard times in the next two to three years but they won’t be as bad in Cuenca because of the overseas income,” Segovia says. “The construction and real estate markets are currently in a recession and may stay that way for several years for most of the country. On the hand, I think a real estate recovery will begin much sooner in Cuenca.”
Segovia says the government withdrawal of proposals to increase inheritance and capital gains taxes have opened the door to new investment.
It is not just money coming home to Cuenca that is making a difference. According to a report from the city’s Chamber of Industries, many Ecuadorians living overseas have returned to invest in the city. The reports cites new hotels and restaurants opened by returning Ecuadorians. “The talent returning from Europe and the U.S. is making Cuenca more sophisticated, more world-class,” says the report.