Record migrant dollars sustain families while driving inflation, land speculation, and deep social costs across Ecuador’s southern highlands.

Walk through the canton of Gualaceo or the town of Chordeleg, just 45 minutes from Cuenca. You will see three-story mansions with ornate columns, mirrored glass, and American-style SUVs in the driveways. Yet, there are few major industries here. There are no smoking factory chimneys, no massive tech parks. How is this possible?

The answer lies in the data released this week by the Central Bank of Ecuador: $6.5 billion in remittances entered Ecuador in 2024, and the projection for 2025/2026 is $7 billion. Between July and September, remittances flowing into Ecuador reached $2.012 billion, the highest quarterly total ever recorded. The funds arrived through 5.68 million separate transfers, with the average transaction climbing to $354.40, according to official data.

A disproportionate amount of this cash flows directly into the provinces of Azuay and Cañar. This is the “invisible factory” of the southern sierra.

The “Dutch Disease” of the Andes

This influx of dollars acts as a lifeline, preventing absolute poverty, but it also creates a localized economic distortion known to economists as “Dutch Disease.”

• Real Estate Bubble: Migrants sending money home prioritize one thing: building a house. This drives land prices in rural Azuay to levels comparable to Miami or Madrid. A local farmer cannot afford to buy land to grow corn; only a migrant family can afford it to build a house that often sits empty, waiting for a return that may never happen.
• Inflation of Services: The availability of “migrodollars” drives up the cost of local labor and services. Plumbers, masons, and electricians charge rates that reflect this inflated economy, squeezing those who earn local Ecuadorian salaries.
• Dependency: The region has become an economy where the primary export is people. The local production of goods is withering because it’s easier to buy imported goods with remittance money than to make them.

The Human Toll: Orphans of Migration

Behind every Western Union transaction is a fractured family. The “orphans of migration”—children raised by grandparents or aunts while their parents work in the US or Spain—are a massive demographic here. Teachers in Azuay report classrooms where 70% of students have parents abroad.

This social fracture feeds directly into the security crisis. Unsupervised youth, often with access to easy cash sent by guilty parents, become prime targets for recruitment by gangs. They have money but no guidance, making them susceptible to the allure of the “easy life” offered by criminal organizations.

While the government celebrates the foreign reserves these dollars bring—stabilizing the dollarization system—the reality on the ground is a region that is wealthy in cash but hollowed out socially. We are eating, building, and driving thanks to the sweat of undocumented workers in New York and New Jersey. The expat retiree living in Cuenca benefits from the modern malls and services these dollars support but must also navigate the inflationary pressures they create.