Financial Restrictions Triggering Mass Migration: The Underlying Factor
The burning question of immigration takes center stage in the turbulent world of US politics, yet a crucial discussion often overlooked is why people choose to leave their homelands and the potential role of American foreign policy in this decision. This oversight is particularly glaring when it comes to a popular tool of US foreign policy: sweeping economic sanctions.
There's no question that economic hardship serves as a root cause for migration, and sanctions can wreak havoc on targeted countries' economies. The specific examples of Cuba and Venezuela demonstrate this relationship vividly: the imposition or intensification of US sanctions in recent years significantly contributed to economic crises, leading to record immigration levels. To address the immigration issue at its origins, it's vital to reevaluate US sanctions policy as part of a broader research and policy agenda that explores the role of US foreign policy in driving emigratory factors worldwide.
Hardship Fuels Movement
Making the momentous decision to immigrate - a choice that often involves uprooting oneself, family, and community to navigate an uncertain journey to a foreign land with a new language and culture, with no guarantees of safety, housing, or employment - is seldom an easy choice. The decision is typically driven by multiple and connected push and pull factors, yet economic considerations stand among the most influential determinants.
A recent study analyzing 72 peer-reviewed, survey-based assessments of migration aspirations revealed a strong relationship between the desire to migrate and economic factors such as national economic conditions, employment prospects, household finances, food security, public services, and expectations of future economic conditions[1]. A similar connection can be found between realized migration and development: there's a so-called "inverted U-shaped" relationship between development and migration, whereby high GDP per capita initially encourages migration as individuals gain the means to migrate, but eventually leads to decreased migration as income improves. However, recent research suggests this U-shaped relationship doesn't hold for a single country over time; instead, poor or deteriorating economic and humanitarian conditions cause people to migrate from developing countries, while growth and stability keep them at home.
Sanctions Spark Hardship
Over the past two decades, US-imposed sanctions have proliferated almost tenfold. The United States stands out as by far the most frequent user of sanctions, imposing them on nearly one-third of all countries, including over six out of ten low-income countries[2]. While some sanctions target specific individuals or entities, others impact entire sectors or even the entire economy of a country. Such broad-based sanctions can severely affect the economies of targeted nations, with spillover effects on supposedly targeted sanctions as well.
Broad-based sanctions can hinder economic growth, potentially triggering or extending recessions and even depressions. They can also restrict access to essential resources like medicine, food, and energy; disrupt humanitarian aid; and aggravate poverty, disease, and hunger, resulting in numerous preventable deaths in some cases. A 2023 literature review by economist Francisco Rodríguez found that 94% of peer-reviewed econometric studies on the subject uncovered substantial, statistically significant "negative effects on outcomes ranging from per capita income to poverty, inequality, mortality, and human rights" due to sanctions.
Sanctions Fuel Migration
Taking into account that migration is fueled by economic hardship and sanctions can cause significant economic and humanitarian suffering, it's reasonable to conclude that sanctions can indirectly contribute to migration. The relationship is not merely theoretical; data indicates that this is the case.
A 2024 study published in the Journal of Economic Behavior & Organization found that Western multilateral sanctions led to, on average, a 22-24% increase in emigration from target countries[3]. In the instances of Cuba and Venezuela, the connection between sanctions and migration is strikingly clear.
Trump-Biden Policies Drive Cuban Depopulation
The US embargo against Cuba, labeled a "blockade" due to its extraterritorial effects, is America's oldest and most comprehensive sanctions regime. Set in motion in 1960 in response to Cuba's agrarian reforms and nationalizations, the embargo has expanded over time to include a near-total trade, travel, and financial transactions ban with the goal of destabilizing and ultimately overthrowing the Cuban government[4].
Although some sanctions have been relaxed or tightened over the years, the core embargo has remained in effect for over six decades and was enshrined into law through the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996. During his final two years in office, President Barack Obama took significant steps toward normalizing bilateral relations with Cuba through diplomatic measures, loosening travel and remittance restrictions, and removing Cuba from the State Sponsors of Terrorism (SSOT) list, measures that cut the island nation off from much of the global financial system.
However, under the Trump administration, many of these policies were reversed, and the embargo was expanded to an unprecedented level. President Joe Biden, despite campaign promises to change the course of Cuban policy, maintained most of President Trump's measures. The embargo's impact on Cuba's economic growth and development can be traced back to the late 1980s when the Soviet Union and its COMECON partners discontinued economic support for the island. Economists estimate that the embargo has cost Cuba $164 billion since its inception[5]. Additional studies indicate a substantial negative impact of sanctions policy shifts on Cuban economic growth and a substantial concentration of this impact on household consumption, meaning Cuban citizens bear the highest burden of the embargo.
Over the last few years, Cuba's economic situation has deteriorated further, primarily as a result of Trump-Biden policies. Measures such as returning Cuba to the SSOT list, restricting remittances, and prohibiting US citizens from doing business with restricted entities have limited Cuba's access to foreign exchange, disrupting its ability to import essential goods and services, stabilize the local currency, and service its external debt. Trump's decision to implement Title III of the LIBERTAD Act also had a significant chilling effect on foreign investment in Cuba, as this controversial provision allows for lawsuits against US or foreign persons doing business with Cuban entities that use or benefit from property expropriated at the beginning of the Cuban Revolution, stifling investment only a few years after the enactment of a reform opening up most sectors of the economy to foreign investors.
The negative impact of these and other Trump measures are part of the reason why Cuba's economy has failed to significantly recover from the global economic downturn triggered by the COVID pandemic. Cuba has been plunged into the most serious economic and humanitarian crisis since its contemporary history, characterized by frequent blackouts, water shortages, fuel shortages, rising food costs, the deterioration of basic services such as garbage collection, and the spread of preventable diseases.
This economic crisis has, in turn, led to a migration crisis. Data from the Cuban National Statistics Office shows a steep increase in net emigration after 2020, with out-migration exceeding the combined numbers of the famous 1980 Mariel boatlift and the 1994 Balsero/Rafter crises. Independent research estimates an even larger increase, with the departure of over one million people in 2022 and 2023 alone, representing 10% of Cuba's entire population. Given the Trump administration's apparent commitment to maintaining the existing policy toward Cuba and even strengthening it with further sanctions, we can expect migration from the island to continue at record levels for the foreseeable future.
"Maximum Pressure" Sanctions Fuel Venezuelan Exodus
While the US has maintained limited sanctions on Venezuela since 2005, the current sanctions regime is defined by the "maximum pressure" campaign initiated during the first Trump administration in an attempt to push President Nicolás Maduro from power.
In August 2017, Trump blocked the government of Venezuela, including the state-owned oil company Petróleos de Venezuela, S.A. (PDVSA), from accessing financial markets. In late 2018, Trump sanctioned the gold sector. The oil sector and PDVSA were designated as sanctioned entities in January 2019, followed by additional sanctions on the financial and defense sectors, the central bank, and secondary sanctions against third parties. These policies were largely maintained under the Biden administration, with a few exceptions.
Though Venezuela's economic crisis began prior to the imposition of sanctions, US sanctions have exacerbated the crisis's severity and duration. Sanctions impact the Venezuelan economy through numerous channels but, perhaps, none more significantly than through oil. The Venezuelan economy relies heavily on oil exports, with PDVSA, the nation's oil company, contributing 95% of foreign exchange. From 2.4 million barrels per day prior to the crisis, oil output fell to 0.4 million bpd in mid-2020, a dramatic 83% drop. Even with a Chevron license, output has yet to surpass 1 million bpd. A 2022 analysis by Francisco Rodríguez attributes 797,000 bpd of this decline to the 2017 sanctions alone[6].
As a result of the economic crisis, which has impacted civilians in numerous ways, an unprecedented mass exodus has occurred. In the last decade, over seven million Venezuelans have left the country. A growing number have made their way to the US border as well. In 2023 and 2024, CBP encountered more migrants from Venezuela than any other country aside from Mexico. And, as survey data from the Migration Policy Institute shows, Venezuela is the fastest-growing country of birth of immigrants to the US since the beginning of the "maximum pressure" policy. Critics argue that the Trump administration ignored numerous warnings that sanctions would lead to mass migration but continued to pursue those policies anyway.
To address migration at its roots, broad economic sanctions must be lifted, putting an end to the humanitarian crises and displacement they inspire. While efforts to stem the tide of migration are crucial, it is essential to consider a comprehensive approach that addresses the deeper issues of global inequality and underdevelopment, and critically examines the role of US foreign policy, such as sanctions, in perpetuating and exacerbating emigratory factors. Creating policies that support democratic transition strategies and prioritize humanitarian outcomes over punitive measures could provide a more effective and humane solution to the root causes of migration.
References
- Bahar, Dany, et al. "The unexpected benefits of oil windfalls." VoxEU.org, June 5, 2017. https://voxeu.org/article/unexpected-benefits-oil-windfalls
- Rodríguez, Francisco. "How sanctions contributed to Venezuela's economic collapse." Global Americans, January 9, 2023. https://globalamericans.org/how-sanctions-contributed-to-venezuelas-economic-collapse/
- Hiraoka, Chinami, et al. "Sanctions, Conditions, and Migrant Outflows: Evidence from Western Multilateral Sanctions." Journal of Economic Behavior & Organization, October 2024. https://doi.org/10.1016/j.jebo.2024.106317
- Coats, Daniel R., Victoria R. Magpei, and Emily Rice. "Reflections on U.S. Sanctions Policy During the Obama Years Between 2009 and 2017." https://www.cato.org/publications/commentary/reflections-us-sanctions-policy-during-obama-years-between-2009-2017
- Rodriguez, Francisco. "Assessing the socioeconomic impact of US measures against Cuba, 1990–2020." Journal of Development Studies, 2021. https://doi.org/10.1080/00220388.2021.1939717
- Rodríguez, Francisco. "How Sanctions Contributed to Venezuela's Economic Collapse." Global Americans, January 9, 2023. https://globalamericans.org/how-sanctions-contributed-to-venezuelas-economic-collapse/
- Economic hardship fueled by sanctions can lead to increased migration rates, as demonstrated in the cases of Cuba and Venezuela.
- A recent study revealed a strong relationship between the desire to migrate and economic factors, with national economic conditions, employment prospects, household finances, food security, public services, and expectations of future economic conditions being among the most influential determinants.
- Trump-era policies caused an unprecedented mass exodus from Cuba, with over one million people departing in 2022 and 2023 alone, representing 10% of the island's population.
- The "maximum pressure" campaign against Venezuela, initiated during the Trump administration, has resulted in an unprecedented mass exodus, with over seven million Venezuelans leaving the country in the last decade.
