ABSTRACT
The Salvadoran case gives an opportunity to study the impacts of remittances. The civil war that has been raging in El Salvador has resulted in the massive migration of Salvadorans to the United States. The impact on the economy of El Salvador cannot be underestimated; the loss represents the equivalent of 64 percent of coffee exports for 1986. Even though future trends in remittances cannot be precisely predicted, remittances clearly represent a major source of income to the economy of El Salvador. The chapter focuses on the utilization of remittances by small businesses in El Salvador. Time and resource constraints confined our study to the metropolitan area of San Salvador. The universe consisted of the small businesses in greater San Salvador, an area comprised of 18 municipalities. The picture that emerges from the data is that for those small businesses receiving remittances in El Salvador, the income plays a very large role in economic development.
