1 PARADISE IN THE ANDES: THE RECENT MIGRATION OF AMERICANS TO CUENCA, ECUADOR By THIAGO MACEDO CUNHA A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE D EGREE OF MASTER OF ARTS UNIVERSITY OF FLORIDA 2014
2 2014 Thiago Macedo Cunha
3 To my Mom and Dad for all their support and encouragement throughout my life. To Juana, my wife, who has always been by my sid e since the first day we met.
4 ACKNOWLEDGMENTS I want to thank my parents and my wife for all their support and encouragement throughout my graduate studies. I am incredibly indebted to Dr. Carmen Diana Deere for her mentoring and constant support, wh ich made me strive to continuously improve. I also would like to thank the other committee members, Dr. Philip Williams and Dr. Richmond Brown, for their comments and guidance. Additionally I want to praise the staff at the Center for Latin American Studi es for their commitment to helpin g students achieve their goals. Finally, I am grateful to all the Americans and Ecuadorians who agreed to participate in the interviews. Without them, this thesis would not be possible.
5 TABLE OF CONTENTS page ACKNOWLEDGMENTS ................................ ................................ ................................ .. 4 ABSTRACT ................................ ................................ ................................ ..................... 7 CHAPTER 1 I NTRODUCTION ................................ ................................ ................................ ...... 8 2 INTERNATIONAL RETIREMENT MIGRATION ................................ ...................... 1 4 Economic Factors .. 1 5 Health C are Costs and Quality of Treatment ................................ .......................... 18 Better Quality of Life: Non economic factors ................................ ........................... 19 Th e Role of Telecommuni .... 2 1 ...... 2 2 ......... 2 4 Concluding Thoughts on International Retirement Migration ................................ .. 2 5 3 CUENCA AS A DESTINATION OF INTERNATIONAL MIGRATION ...................... 28 History and Geographic Locat ion ................................ ................................ ............ 28 The Economy of Cuenca ................................ ................................ ........................ 29 The Cultural Importance of Cuenca ................................ ................................ ........ 3 2 Media Influence ................................ ................................ ................................ ...... 3 4 ................................ .................. 36 4 THE AMERICAN COMMUNITY IN CUENCA & MOTIVATIONS TO EMIGRATE .. 37 Demographics ................................ ................................ ................................ ......... 39 Age ................................ ................................ ................................ ................... 39 Race ................................ ................................ ................................ ................. 4 0 Education ................................ ................................ ................................ .......... 4 1 Marital Status ................................ ................................ ................................ .... 4 1 Spanish Fluency ................................ ................................ ............................... 4 2 Length of Residence in Cuenca ................................ ................................ ....... 4 3 L iving Arrangements ................................ ................................ ......................... 4 4 Motivation s Behind Migration ................................ ................................ .................. 45 Economic Factors ................................ ................................ ............................. 45 Professional Opportunities ................................ ................................ ............... 47 Quality and Cost of Health Care ................................ ................................ ....... 49 Climate ................................ ................................ ................................ ............. 5 1 ................................ ................................ ..... 5 3 The People of Cuenca ................................ ................................ ...................... 5 5 The Role of the Medi a ................................ ................................ ...................... 56
6 Dise n chantment with the United States ................................ ............................ 5 9 Final Remarks on the American Community in Cuenca ................................ ......... 6 1 5 IMPACT OF AMERICAN IMMIGRATI ON ON C UENCA ................................ ......... 6 5 Real Estate ................................ ................................ ................................ ............. 6 6 Macroe conomic Impact ................................ ................................ ........................... 7 1 Increase in Prices ................................ ................................ ............................ 7 3 Business Openings ................................ ................................ .......................... 7 7 Financial Investments ................................ ................................ ...................... 7 9 ................................ ................................ ............. 8 2 Americans ................................ ................................ ................................ .... 8 3 Cultural ................................ ................................ ................................ ................... 8 6 Volunteer Activities ................................ ................................ ................................ 8 8 Concluding Thoughts on the Impact of American Immigration to Cuenca .............. 8 9 6 C ONCLUSION S ................................ ................................ ................................ ..... 9 4 LIST OF REFERENCES ................................ ................................ ............................. 10 2 BIOGRAPHICAL SKETCH ................................ ................................ .......................... 10 6
7 Abstract of Thesis Presented to the Graduate School of the University of Florida in Partia l Fulfillment of the Requirements for the Degree of Master of Arts PARADISE IN THE ANDES: THE RECENT MIGRATION OF AMERICANS TO CUENCA, ECUADOR By Thiago Macedo Cunha May 2014 Chair: Carmen Diana Deere Cochair: Philip J. Williams Major: Latin American St udies In 2009, the city of Cuenca, Ecuador was elected by the magazine International Living as the top retirement destination in the world. Since then, Cuenca has seen an influx of immigrants arrive and settle in the city, with a significant proportion be ing comprised of Americans. The goal of this study was to identify the reasons that motivate Americans to migrate from the United States to Cuenca and how these Americans are impacting or may impact the city in the future if this migration pattern were to continue A specific emphasis was placed in researching the impact of American immigration on Cuenca in terms of real estate prices m acroeconomic variables, and investments The research was based on semi structured interviews with Americans and Ecuadori ans. The research result s show that most American immigrants in Cuenca are retired seniors who were mostly motivated to migrate because of economic factors An important percentage of recent American immigrants were negatively affected by 2007 financial cr isis and/or were motivated to migrate because of disenchantment with the US. The impact of American immigration on macroeconomic variables, and i nvestments appears to be small.
8 CHAPTER 1 INTRODUCTION The study of internatio nal migration has mostly focused on the migration of citizens from the developing to the developed world. The United States and Europe have been the destination of most international migrants from developing countries According to the United States Census Bureau, 53% of the immigrants currently residing in the United States (US ) are from Latin America and the Caribbean ( Grieco et al., 2012 p. 2 ). Recently a new wave of international migration has been on the rise. Migrants from the developed world have begun to migrate to developing countries. T his type of migration is not completely new as for many decades citizens from developed centers countries particularly for purposes of retirement. Various resea rchers have documented the experiences of US n ationals in Mexico and of the British in Spain (Cr oucher, 2009; Morales & Castro, 2008 ; Warnes, King, Williams, & Peterson, 1999) However, in recent years this migration pattern may be becoming more intense as a result of an aging population in the developed world. Over the past decade the economies of the developed countries have suffered from slow growth and high unemployment, while many developing countries continue to exhibit economic stability, moderate g rowth and low unemployment. One of the c ontributions of this thesis is the discovery that a not inconsequential share of the recent American immigrants were negatively affected by 2007 financial crisis and/or were motivated to migrate because of disenchan tment with the US. However, this study will also show that e conomic reasons are just one of t he motives for citizens from advanced economies to migrate to developing countr ies as m any other factors come into play
9 when a person decides to migrate such as q uality of health care, climate, media influence, and disenchantment with their home country. For many reasons, Latin America has become a major destination for migrants from developed centers particularly the US Besides recent economic stability and gro wth in the region other factors are also pushing citizens from developed countries to migrate to Latin America. Many people are migrating to enjoy their retirement years, but some are searching for employment and business opportunities as well. Mexico, Pa nama, and Costa Rica have experienced a significant inflow of American immigrants 1 All of these countries have specific v isas for those who wish to retire or invest in their countries. Recently, Ecuador has become a major destination for immigrants from a dvanced economies and Americans are leading the pack. It should be reason at play when a person decides to migrate t o another country. In this thesis attract Americans to migrate specifically to Cuenca Ecuador This thesis is a result of the research I conducted among the American community in Cuenca dur ing the summer of 2013. The objective of the research was to identify the reasons that motivate Americans to migrate from the United States to Cuenca and how these Americans are impacting or may impact the city in the future if this migration pattern were to continue In terms of impact, a specific emphasis was placed in researching the type of investments, if any, that Americans are making in the city. 1 In this thesis United States citizens will be referred as
10 One of the reasons motivating my choice of this research topic has been my own experience in Cuenca Since 2005, I have visited this city almost yearly and have noticed how it has changed Along with natural po pulation growth and modernization Cuenca has also become a major destination for migrants from developed centers especially retirees or people close to retirement age. In my visits to Cuenca, I noticed these new residents and how their numbers seem to be increasing over time As a result, I decided to conduct my thesis research on why Americans have chosen Cuenca as their new home. I focus specifically on American migrants because they seem to be the largest group of immigrants from developed countries 2 T he number of American immigrants that permanently reside in Cuenca has been estimated to be in the range of 2,500 to 3,000 ( 2013; 2012; Sorensen 2013). 3 Also, it piqued my interest that American citizens would seek a better quality of life in Cuenca s ince the United States is accustomed to receiving immigrants from all over the world and a large share of these immigrants are searching for a better quality of life. In addition, Azuay province o f which Cuenca is t he capital has traditionally sent many migrants to live and work in the United States and Europe In 2001 over 34,000 natives of Azuay were living abroad ( Ecuador 2008, p. 25). Although researchers are beginning to pay attention to the issue of internati onal migration from developed to developing countries there is still a need for more in depth analysis on the topic O nly a few studies have interview ed these immigrants to 2 Precise data regarding the nationality of immigrants in Cuenca is not always accurate since the available data does not take into ac count those who had a residency card and decided to return to their native countries. 3
11 understand their motivations to migrate and their goals and expectations in their new country of residence. In addition, many of the cities receiving these immigrants may not be prepared to do so and the consequences can be positive or negative depending on how the two cultures intermix Consequently, it is important for scholars to res earch what each group can gain and lose with the increase of American migration to Latin America Since this phenomenon is fairly new, there is still plenty of time for cities such as Cuenca to take appropriate steps to take full advantage of the benefits that come with foreign immigration as well as to mitigate the potential negative impacts that can result. My research was based on semi structured interviews with Americans and Ecuadorians. The snowball sample for the semi structured interviews was compos ed of 30 US citizens plus six key informants that included both Americans and Ecuadorians. The Ecuadorians interviewed had more direct experience with the American community in Cuenca. As noted earlier my research has two components The first was to us e the semi structured interviews with Americans to compile a list of factors that influence American migrati on to Cuenca. The second was to analyze the impact of America immigration on the city drawing primarily by the information provided by my key inform ants My research showed that the majority of Americans residing in Cuenca are retired or near retirement age with little Spanish fluency, if any. They are usually Caucasians with at least a high school degree. The majority of respondents had been residin g in Cuenca for three years or less and did not own the homes they lived in.
12 Economic factors, such as the cost of living, are the main motivation behind their migration. Disenchantment with the US, for both economic and political reasons, pushed many Amer icans to emigrate. A minority of respondents migrated to Cuenca mainly to open their own business or decided to do so once they arrived there. The impact of American immigration on real estate prices and macroeconomic variables appears to be small. The ma jority of respondents did not purchase the homes they live in and decided to rent instead. It appears that a combination of factors, such as returning migrant Ecuadorians and remittances, is responsible for the increase in real estate prices and the rising cost of living. American investments in Cuenca tend to be limited to the purchase of homes and the opening of savings or certificate of deposit (CD) accounts. Thus, the impact of American immigration on investments is likely small as well. immigration on Cuenca and are causing some discomfort among Ecuadorians The engagement of some Americans in volunteer and cultural activities is the most clear positive impact of their immigration to the city. In C hapter 2 I will analyze the phenomenon of international retirement migration drawing upon the existing literature My research did not focus solely on retirees as I interviewed Americans of various age groups. Nonetheless, the results showed that the majority of Americans residing in Cuenca are retired or near retirement age. Therefore, I wil l summarize the principle factors that have been found to explain this migration pattern : economic factors, health care costs and the quality of treatmen t, the pursuit of a
13 better quality of life (non economic factors) the role of telecommunications, media influence, and the existence of an a lready vibrant expat community. In C hapter 3 I explore the reasons that have turned Cuenca into a destination of i nternational migration. I focus economy, and how the media helped disseminate world. T he results of my research are presented in C hapter 4 Drawing on the in depth inter views, I identify the main demographic characteristics of the Am erican community in Cuenca and discuss the range of factors that motivated US citizens to move to the city. The impact of American immigration is discussed in C hapter 5 Drawing on the semi structured interviews and information provided by key informants, I analyze how American immigration has impacted Cuenca, especially in the realm of real estate prices and new investments I also draw upon reports and triangulate all these so urces of information to analyze the positive and negative effects of American immigration on the city. Chapter 6 summarizes the main results of my research.
14 CHAPTER 2 INTERNATIONAL RETIREMENT MIGRATION The migration of retirees to other parts of th e world where the weather is more welcoming and where their pension can be stretched further is nothing new. Europeans, especially from more developed countries such as England, are known to retire in places such as Spain, France, and Portugal (Creffield, 2010 ; Warnes et al., 1999 ) A ccording to an article published by the Institute for Public Policy Research, as many as one in five British pensioners will live abroad by 2050 (Sriskanda rajah, 2007). In the case of Americans, t he Association of Americans Res ident Overseas (AARO) estimates that around 6.3 million of them excluding military personnel, live overseas, but does not specify how many are retirees ( About AARO, 2013). Mexico has always been a favorite spot for those who wanted to live their retire ment years comfortably for a fraction of the cost in the United States. Towns in Mexico such as Mazatln Ajijic, San Miguel Allende, and others are well known for their large population s of American retirees (Croucher, 2009 ; Morales & Castro, 2008 ) The p roximity of Mexico and the political and economic ties to the United States further motivates Americans to retire south of the border. This migration pattern seems to be on the rise in Mexico as American migratio n to the country increased 84.3 % from 1990 t o 2000, with popular retiree destinations such as Los Cabos and Ajijic experiencing an increment of American migration in the range of 308% and 581% respectively (Morales & Castro 2008, p. 60). However, Mexico has not been the only destination in Latin Am erica where Americans have moved to in their retirement years. According to a report published by the Migration Po licy Institute, the number of US born seniors
15 residing in Panama increased by 136 percent between 1990 and 2000 (Dixon, Murray, & Gellatt, 200 6, p. 39) International retirement migration seems to challenge the typical explanations of conventional migration theories which seek to explain the movement of peoples from one country to another International migration usually involves migrants who w ish to reunite with family members, who are looking for professional opportunities, and/or are escaping political or religious persecution ( Trends in International 2001) However, international retirement migration does not fit the above description. R eti red migrants want to improve their quality of li fe, but are influenced by different factors Thus, international retirement migration seems to be a subset of migration theory and must be looked through a different lens. The aim of this c hapter is to give a general overview of the phenomenon of inte rnational retirement migration, analyzing principal factors motivating this migration pattern. The main components driving this type of migration are economic factors, healthcare costs and the quality of treatmen t, the pursuit of a better quality of life (non economic factors) the role of telecommunications, media influence, and the existence of a vibrant expat community. Since the great majority of Americans currently residing in Cuenca are retirees, it is cruci al to explore the issues surrounding international retirement migration in order to fully comprehend the recent migration pattern to the city. Economic Factors S cholars have documented the experience of American retirees in Mexico, Costa Rica, and Panama a nd explored why they were motivated to move abroad at such a late stage of their lives. There are many motivations for international retirement
16 migration, but the number one reason seems to be economic. Focus groups conducted in Panama and Mexico by Dixon et al. (2006) showed that three fifths of participants in Panama and one third of those in Mexico considered economic factors as the numbe r one reason to migrate The possibility of moving to another country to improve their quality of life is enticing to many American retirees. In his study of Boquete, Panam, Mason McWatters (2009) describes the main motivation of American retirement individuals voluntarily surrender their r ooted identities and their physical ties to a stable home and community in exchange for a new beginning in a truly foreign and faraway p. 1). The c ost of real estate is one of the main components of the economic motivation for retirees to move fr om their home country. Many retirees are attracted to certain cities in developing co untries due to the lower cost of purchasing or rent ing a home than in their country of origin, allowing them to stretch their retirement income The cities that usually re ceive a significant amount of retired immigrants are small or mid sized towns where the cost of housing or land is relatively low for the typical retiree from the developed world. As a result, many towns in Latin America have been significantly impacted by the influx of retired immigrants from abroad One of the paradoxes of this type of immigration is that w hen the number of retired immigrants reaches a certain critical proportion of the overall local population, property values could potentially increase as a result of their demand and ability to pay higher prices In her description of San Miguel Allende, Sheila Croucher (2009) states, RE/MAX Real Estate occupies one prominent corner of the town's central colonial
17 square, also announcing in English an a rray of featured properties with prices in U.S. dollars far beyond the average Mexican's budget, and, in recent years, exceeding the budg p. 28). Thus to measure the impact that international retirees can have on these locat ions it is important to consider the size of the city and local purchasing power. Nevertheless, the relative cost of real estate in the country of origin and destination is a major economic motivation for American retirees to retire abroad and it must be kept in mind that the result of such immigration can be detrimental to the local population. The c ost of living is another component of the economic motivation to retire abroad. One of the ideas behind international retirement migration is to live well wi th a limited amount of income. Retirees generally rely heavily on retirement pension s to survive in their senior years. It is normal for seniors to spend more on health care due to health complications that come with aging. Hence their expenses can potenti ally increa se instead of decreasing in their senior years. Thus, the idea of retirement in a country where the cost of living is a fraction of what it is in the ir country of origin is definitely an incentive. For instance, in a survey conducted among retir ed American immigrants in Lake Chapala, Mexico, 88% of the respondents cited the low cost of living as the primary factor for their decision to migrate from the United States to Lake Chapala (Sunil, Rojas, & Bradley 2007, p. 497). The lower cost of living increases the disposable income available to these retirees allowing them to enjoy the latter part of their lives with more intensity then they could have in their home countries. More disposable income translates in to more dining out, travel cultural ac tivities, and purchasing power to buy whatever they want. Therefore, a lower cost of living abroad
18 not only brings more financial security to retirees, but it also greatly improves their quality of life as a result of their higher disposable income Health C are Costs and Quality of Treatment In addition to the significant increase in the quality of life that a retired immigrant might experience abroad, the issue of health care affordability has become a major economic issue pushing senior citizens to migrat e to other nations (Croucher, 2009; Croucher, 2012 ) Although the United States has a universal health care program focused on senior citizens (Medicare) the out of pocket costs of medicine and other treatments can be extremely high and unaffordable to th ose who live on a retirement pension (Graham, 2012) Seniors in the United States who are retired and contributed to social security have access to Medicare which supposedly covers a good share of the costs of medical treatment and the purchase of medicine However, the increasing costs of medical treatment and medicine results in seniors having to use more of their retirement income to pay for costs related to healthcare. The issue of Medicare in the United Sta tes is a controversial one which generates int ense debate The growing number of baby boomers who have retired or will soon do so further exacerbates the discussion surrounding Medicare coverage for seniors and increases their anxiety Many politicians deem the restructuring of Medicare as necessary i the program from bankruptcy. Any future changes to these programs which result in a loss of benefits might ultimately push more Americans to consider retirement outside of the United States. The cost is not the only issue that concern s senior citizens about healthcare. The quality of treatment is also a concern that many seniors consider when they decide to
19 move outside of their own country. The quality of healthcare in developed countries is usually considered to be much better than i n developing countries and medical technology is consistently improving to make treatments more secure and reliable. However, medical technology only goes so far T he doctor patient relationship is also an important part of the medical treatment. Many pati ents in the Unit ed States claim that the doctor patient r elationship is less than ideal (Dudgale, Epstein, & Pantilat, 1999). More and more patients are obligated to fill out a number of bureaucratic questionnaires, consult with nurses first, and then late r speak with a doctor for a few a lack of trust among patients. Since senior citizens are naturally more prone to healt h issues, they are the ones most exposed to these frustratio ns. Medical treatment in many parts of Latin America is still based on a close relationship between doctor and patient and it is not uncommon for doctors to visit patients at home. Many American retirees long for the days when the doctor was a family frie nd o r at least an acquaintance who visited the ill patient at home. Thus, many retirees travel outside of the United States to seek more personalized medical treatment or decide to move abroad as a result of healthcare costs and treatment. Better Quality of Life : Non economic factors The ability to have a better quality of life due to the increase in economic purchasing power is a strong motivating factor for international retirement migration. However, there are other components to a better quality of li fe The possibility of enjoying a more tranquil and peaceful life is definitely an attraction to international retirement migrati on. As Sheila Croucher (2009) indicates in her book The Other Side of
20 the Fence lives south of the border as more tranquil than they were in the United States. Many explain their decision to migrate in terms of wan ( p. 58). For this reason, cities and towns where the pace of life tends to be slower are popular destinations for international retirement migration Another non economic motivation for migration overseas is the pursuit of a more agreeable climate. The importance of this factor for retirees is clearly seen just in the case of the US which ha s experienced significant internal migration on the part of retirees who wish to live in more hospitable climates without the extreme winter season prevalent in the Northern states of the country. The 1990 and 2000 Censuses showed that one out of ten retir ees moved across county or state borders ( Retirement Migration 2005, p. 4) According to the report Retirement Migration in the 2000 Census published by the American Association of Retired Persons (AARP) the counties that attracted the most number of in migrants over the age of 60 tended to be in warmer areas of the South a nd West ( Retirement Migration 2005, p. 31). Due to its warm climate, states such as Nevada and Arizona have been migration and had the fastes t growing senior populations among all states of the Union ( Retirement Migration 2005 p. 5) Furthermore, from 2000 2010 about 31 metro areas in the US, primarily in the South and West, experienced a more than 25% increase in their senior citizen populat ion (Brandon, 2011) The issue of climate helps to explain why, among other things, retirees choose specific international locations to move to and not others. Retirees usually are attracted to places with mild climates where temperatures are not too hot n or too cold in the
21 summer and winter seasons. Additionally, towns with extremely long rainy seasons are not usually attractive to retirees. S eniors are more susceptible to sudden changes in weather and can suffer severe health complications as a consequenc e. Thus, climate can exert a significant influence on migrate The Role of Telecommunications Alt hough the economic situation of most Americans who migrate abroad is in most cases much better than of those who migrate to the United States, the decision to retire abroad is still a difficult one since a person must leave behind family and friends and a way of life to which he or she is accustomed. Lately however, the distance between family and friends has decreased signif ican tly with the improvement of telecommunications. Scholars of international migration and transnationalism agree about the importance and effect of technological advancement on the strengthening of (Croucher, 2009 ; Orozco, 2005 ) In the case of international retirement migration, technology plays a crucial role as it facilitates the transition from one country to another. It also allows retirees to maintain their family ties intact by keep ing in touch with their children and gr andchildren. Services such as Skype and Magic Jack have become extremely popular among immigrant retirees in Latin America as it has significantly decreased the cost to call the United States. Moreover, those who wish to continue their professional activit ies can do so remotely and immigrant retirees may be able to supplement their incomes this way. Other services such as satellite television with American channels are also important to these immigrants as they are able to enjoy their favorite programs as i f they still lived in
22 the United States. Ultimately, the improvement in telecommunications technology has been another factor facilitating international retirement migration. Media Influence Also important to the issue of international retirement migration is to consider how seniors are able to gather information about possible retirement destinations. In the last few decades, many publications have focused on international retirement migration and been marketed towards those seniors who are interested in r etiring outside of their home country. Among these are International Living and Live and Invest Overseas International Living is arguably the most well known publication that focuses on international retir ement migration because of its yearly rankings suc To develop its retirement rankings, International Living considers many things such as the cost of living, the cost and quality of healthcare, climate, and the quality of infrastructure. Coincident a l l y or not, the countr ies that are popular among retirees have usually ranked high in global retirement index. A good example is Ecuador which has been ranked by International Living as the number one retirement destination in the world for the last five years In addition, International Living and Live and Invest Overseas frequently organize conferences to promote the places they suggest as a possible retirement destination. The conferences usually cover many of the same topics as the magazine s but provide analyse s and one to one contact and advice by cost to attend a conf erence is not cheap; the interested person can expect to pay hundreds of dollars, not including hotel accommodations, tran sportation, and food
23 The influence of media is not limited to print and/or online magazines. Television networks have also contributed to the topic of international retirement migration with the ir coverage of retirement destinations around the world. For example, Cuenca has recently received television coverage from BBC, ABC News and HGTV because of the significant number of American retirees who have settled in the city. Social media such as Fa cebook and blog posts are also crucial for disseminating information about retirement destinations around the world. In fact, many people consider the opinions of retirees who actually reside in the popular retirement destinations as more important than th at in selling their products and services. Although we can find media influence in traditional migration patterns, it seems that the media has assumed a new role in the case of inte rnational retirement migration. Imm igrant retirees do not appear to rely on the typical migration networks of friends and family to decide where to migrate. The migration networks theory is widely used to explain migration motivated by economic, political, and social factors. It can be defined 2002, p. 291). The migration networks function to provide support for the newl y arrived immigrant and decreases the uncertainty of relocation to a foreign country with a differe nt culture, laws, and language. S ocial media may be substituting the traditional role of migration networks as ebook pages. times act as a support network for retirees once they arrive in their new destinations. Social media provides retirees with an important social capital that eases their transition
24 into their adopted community. Thus, in the case of international retirement migration social media not only acts as a source of information, but as a substitute for the traditional role of migration networks. Vibrant Expat Community Not only is the opinion of retirees that reside in a particul ar location important, in many cases it is a crucial element in benefits of international retirement migration is to experience other cultures, many seniors prefer to relocate to a location where they can r ely on people of their same nationality and language Because many of the recent retirees who are moving to different countries do not speak the local language or have thorough knowledge of the local culture, it is crucial that they have a support network that they can lean on for everyday matters or in case of an emergency However, it has also been noted that in some cases a large, active and engaged expat community can deter other retirees from moving to a specific ci ty. The reason is that a cultural such an extent that it changes it. Part of the allure of moving abroad is to experience other cultures as they are. I f the local culture changes due to inte rnational retirement migration, s ome retiree s may prefer not to live in such an environment and search for other places where the expat presence is notable, but not overwhelming. Moreover, some retirees who already live in places that have been overwhelmed by international retirement migration consi der leaving as a result of the changes that have occurred. Popular retirement locations in Latin America, such as Boquete, Panama, seem to be experiencing such a phenomenon where many Americans resent the recent arrivals and consider them as
25 spoilers of a pristine paradise. In his work on residential tourism in Boquete, Mason McWatters (2009) explains this concept: complicit role in creating these perceived negative impacts, informants always blamed other residenti al tourists the newcomers for tipping the scale of balance to engender p. 1 06). There seems to be a point of saturation where even the immigrant retirees themselves cannot accept more arrival of fellow compatriots as it can potentially o verwhelm Concluding Thoughts on International Retirement Migration In this c hapter, I focused on international retirement migration. While my thesis does not center solely on American retirees l iving in Cuenc a most of the American community is composed of retirees, so it is essential to analyze the phenomenon of international retirement migration. Among the most relevant reasons behind int ernational retirement migration are economic factors, which tend to strongly influe nce on and where to migrate The relative c ost of real estate and cost of living in the countries of origin and destination are the two principal economic factors Chapter 4, which presents the results of my research, explore s new elements of economic factors by negatively impacted by 2007 financial crisis and pushed to migrate from the US as a result of rising unemployment and early retirement Relative h ealth care costs and the quality of treatment also influence decision of whether and where to emigrate.
26 People usually migrate with the intention of improving their quality of life or at least to ameliorate the ir current situation. Among the non economic factors influencing the quality of life is c limate M any people wish t o reside where they can enjoy t hemselves without worrying about extreme temperatures or severe weather. The improvement in telecommunications has also influenced internatio nal retirement migration. Internet availability and phone services such as Skype and Magic Jack provide a way for families to maintain contact even while living in different countries. Retirees take advantage of these services to ease their transition in a new country. Potential migrants use the media online blogs, and Facebook pages to gain information about the international locations they might retire. Th e media has exerted influence by dissemin ating the desirability of many retirement locations. Inte rnational Living in the world has undoubtedly played an influential role in the rising popularity of certain new locales, such as Ecuador. Moreover, media outlets, such as webpages and blogs, play an im portant role in retirees with an importan t social capital and substitute the traditional role of migration networks. Lastly, a vibrant expat community is also important i of where to migrate. Many Americans will look to other compatriots for assistance in solving problems in their adopted city. Nonetheless, overwhelm the local culture and destroy part of the allure of moving abroad. Thus, many retirees do not wish to live in a place where the American presence is so strong as to
27 undermine local traditions and customs. This is part of the reason that publications such as International Living are always seeking out new locations, and why Ecuador and Cuenca in particular, are garnering attention as a new retir ement destination for Americans
28 CHAPTER 3 CUENCA AS A DESTINATION OF INTERNATION MIGRATION In order to comprehend why Cuenca has become a popular destinati on for international migrants from the developed world, especially from the United States, it is and culturally in comparison to the rest of Ecuador. In this c hapter, I provide a general description of the city and its attractions to elucidate why American immigrants are choosing Cuenca to retire or start a new life. History and Geographic Location The city of Cuenca was founded by the Spaniard Don G l Ramrez Dvalos on April 12 1557 by the order of the Viceroy of Lima Don Andrs Hurtado de Mendoza. Before the Spaniards settled the territory where Cuenca is currently located, the Incas inhabited the area for about 80 years after conquering the Caari people in 1470. T he Spaniards took advantage of the internal conflict between the Inca emperors Atahualpa The city of Cuenca was built on top of Cuenca achieved its independence from Spain o n November 3, 1820 and the Republic of Cuenca was born. Later, the city became part of Gran Colombia an d joined the Republic of Quito, which afterward s would become kn own as the Republic of Ecuador, when the latter separated from the former. The full nam e of the city, describes a fundame ntal characteristic of the city, the four rivers (Tomebamba, Tarqui, Yanuncay, and Machngara) that cross it The four rivers provide an abundant source of water for cons umption and irrigation. Cuenca is located in a valley with an altitude of roughly 2,550 meters (8366 feet) in the southern region of Ecuador and is the capital of the
29 province of Azuay. The valley where the city is located is surrounded by the Andean mountain range f urther enhancing the beauty of Cuenca. Impressed by the beauty of its location, the famed Prussian geographer Alexander von Humboldt referred to the United Nations Educational, Scientific, and Cu ltural Organization [ UNESCO ], 1999, p. 9). The climate of Cuenca is often described as cool and mild. Temperature s never rise sufficiently to a point where an air conditioner is needed. In fact, air conditioners in houses and commercial establishments are rare. Even though it gets cold in Cuenca, it never reaches a point where snow falls, except in the Cajas National Park which is located at a higher elevation not too hot and not too cold. Consequently, many American immigrants enjoy the fact that they do not have to experience extreme weather patterns a positive characteristic of the city. The Econ omy of Cuenca Throughout most of the colonial period, Cuenc o n gold mining and farming, with some periods of boom in the export of cinchona ba rk. In the late 19th c ats carry this name because of their popular usage during the construction of the Panama Canal. During the 20th c entury, other economic activities such as the production and trade of jewelry, furniture and ceramic became prominent in Cuenca. M ost of Cuen current commerce is comprised of medium or small family
30 activity as it is home to around 130 companies with production geared towards local, national, and internation al consumption ( 2012). The production of furniture, ceramic and alcoholic beverages are the main drivers of the manufacturing sector. Cuenca and the surrounding areas are also known for the production of r oses for international export and the municipality produces 18% of all roses produced in Ecuador 2012) s economy and it provides a significant source of income to local artisans and entrepreneurs. The 1999 Banking Crisi s caused tremendous havoc in economy. Many banks and businesses went bankrupt which led to an increase in unemployment in the country. As the financial system collapsed, the government decided to adopt the US dollar as the official currency of Ec uador in an attempt to stabilize the economy. Unfortunately, many Ecuadorian citizens saw their savings disappear and e mployment opportunities vanish To many, the only solution was to migrate giving impetus to an even larger and more diverse stream of in ternational migrants than in previous decades In the 19 70s and 80 s migration from the province of Azuay to the United States was predominantly composed of young, male agricultural workers (Jokisch, 2007 ; Jokisch & Pribilsky, 2002 ) The 1999 Banking cris is had a severe impact on the country thus pushing people from all classes to migrate to the United States and Spain T he province of Azuay where Cuenca is located, is one of the regions in the country with the largest percentage of Ecuadorians who have migrated to developed countries such as the United States and Spain As of 2001, 5.7 % (34,053) of the citizens of the province of Azuay were living abroad ( Ecuador, 2008, p. 25).
31 It is ironic that the Province of Azuay has a signi ficant percenta ge of its native population living abroad, while Cuenca has become a hotspot for migration from developed countries especially the United States. However, it is precisely this international migration by Cuencanos that spurred the economy recovery of Cuenc a in the aftermath of the banking crisis of 1999 1 Through their remittances, Cuencanos living abroad provided a much needed cash infusion into the local economy. According to the Ecuadorian Central Bank, in 2012 Cuenca received $418 million in internation al remittances ( Evolucin de las Remesas 2012). T he figure is a stounding if one considers that Cuenca has a population of approximately 500,000 people and remittances in that year would equal roughly $816 per citizen. The significant influ x of remittance is a factor that produce s unwelcome inflation ary pressures as prices rise as a result of greater disposable income. Among the lower classes, g reater disposable income usua lly means greater consumption of basic necessities such as food Research conducted in May of 2013 by the Ecuadorian National Institute of Census and Statistics (INEC) concluded that the cost of a basic food basket in Cuenca was $626 which ranked the city as the most expensive of all the major cities in Ecuador ( Cuen ca & ciudades 2013). Although remittance recipients mostly spend money o n basic necessities such as food and on other living expenses, some of the money is also spent on consumer durables, goods such as cars and real estate Thus, an increase in consumption can lead to higher prices and an increase d cost of living. 1 From now on, native residents of Cuenca will be referr ed as
32 Cuenca is thus not the cheapest city in which to live in Ecuador and the cost of living is an important determinant on where to migrate. However, the cost of choice of where to migrate he absen ce of visible extreme poverty can be an attraction to immigrants from the United States According to INEC in September, 2013 Cuenca h ad the lowest poverty rate (4.2 %) and extreme poverty rate (0.46%) among the five largest cities of Ecuador ( Reporte Pobreza 2013 p. 6 ) For comparison purposes, Quito and Guayaquil have poverty rate s of 9.8% and 13.2% respectively The Cultural Importance of Cuenca Cuenca is one of the most culturally important cities of Latin America due to its indigenous heritage and because of its beautifully preserved colonial center. The city has received numerous international recognition s as a result of its dedication to the preservation of its colonial architecture 2013) recognition as a major cultural center and proudly boast about its national Athens of Ecuador. The nickname is well deserved since Cuenca hosts a variety of cultural activities throughout the year and is home to numerous universities. Undoubtedly, the premier archit ecture are its numerous churches and museums As many other old colonial towns in Latin Americ a Cuenca is home to a significant number of catholic churches, built by the Spanish in the beginning of the 16 th Century. The citizens of Cuenca and its
33 leaders have done a marvelous job in preserving these churches and they are considered major tourist attractions 2 In addition to churches, Cuenca is home to a substantial number of museums, most of which are serve the rich indigenous and colonial history of the city. Residents and tourists can choose from a variety of options such as the Central Bank Museum, Museum of Modern Art, and the Museum of Aboriginal Culture all which offer both permanent and temporary exhibitions T he city often hosts international cultural events to further enhance its reputation as a supporter of the arts. characteristic that gives the city its reputation as a cultural and historical center and resulted in the city being designated a World Heritage Site by UNESCO in 1999 Cuenca was the fourth location in Ecuador to be so recognized and this marked an international city and as an important tourist destination. Specifically, the designation of Cuenca as a World Heritage Site was due to its successful preservation of the Historic Center in combination with that of the pre hispanic archaeological ruins wi thin the same area. The World Heritage Committee affirmed having suffered traumas in the original colonial urban fabric and having conserved within the area of the historic center an archaeological park whe re the v estiges of the pre hispanic spat 1999, p. 3). 2 The Cathedral of the Immaculate Conception is probably the most important and imposing of its churches. Its construction started in 1885 and lasted for almost a century. It officially opened in 1975 and Cuencanos are very proud of its religious and cultural importance to Cuenca and Ecuador.
34 The Historic Center is certainly one of the reasons Cuenca attracts a growing number of immigrants who desire to experi to take ad vantage of its tourist potential. M any of the American immigrants either live in the Historic Center or spend significant time participating in activities located in this area. Thus, Americans are very visible in El Centro and this furthers enhances the id ea of a significant influx of American migrants in the last few years. In addition to being s elected as a World Heritage Site, Cuenca has also been recognized by other international organizations for its cultural and historic significance as well as for its good quality of life Cuenca has received a number of awards such as recognition by National Geographic in 2008 historic cities and the German Stem magazine naming the city as the best place to live for foreigners in the sa me year (Morrill & Castleman 2013, location 143) In October, 2013, Cuenca was the first Latin American city to receive the Jean Paul Prize for Heritage by the Organization of World Heritage Cities as recognition of its achievement s in conservatio n or management of property Media Influence T he internatio nal recognitions that Cuenca has received over the last decade has ion. T he media has advertised Cuenca widely as a desirable location for foreigners to live, contributing to the increase in American migration to the city. More specifically, International Living deserves most of the credit for the initial dissemination of ideal retirement location and an overall great place to live.
35 selection of Cuenca in 2009 as the number one retirement destination in the world was the spark that started it all. After International Livi ng made its selection and American migration to the city increased, other media outlets such as BBC and ABC televised stories about the attractiveness of Cuenca as a retirement location. Newspapers either print or online, such as the Miami Herald and The Huffington Post have also written stories about Cuenca as a retirement haven. These media outlets almost always emphasize ical preoccupations of living in a more industrialized society to cultural and historical preservation by international organizations later became a n argument wide ly disseminated by the m edia of the elevated quality of life that foreigners could experience by moving to the city. International television networks newspapers, and social media played an exp ected, are extremely proud of all the att ention the city has received. T he local media has also reported on the growing presence of f oreigners, especially Americans, who have chosen to live in Cuenca. The local newspapers El Mercurio and El Tiempo have con the climate, quality of life, and cultural importance to explain the increase in im migration. These local media outlets usually cite the numerous international recognitions receive d by Cue nca ers Additionally, local newspapers have written articles about the American community in the city and often elaborate upon their
36 reasons for choosing to settle in Cuenca S ome of the se media reports regardin g the size and influence of foreigners, particularly Americans, are exaggerated Nonetheless, as my findings will show, they accurately describe some of the reasons that motivate Americans to choose Cuenca over other cities in Latin America. Concluding Rem There are many factors that make Cuenca attractive to immigrants from the United States, especially retirees and explain the growing presence of Americans in the city as a colonial center an d its efforts at arc hitectural preservation attract many tourists and is one of the reasons that foreigners find it an attractive place in which to settle. nificance. The cultural importance of Cuenca appeals to immigrants, especially American retirees, who take advantage of activities sponsored both by private organizations an d the local government. Finally, the media has played an important role in advertis features, particularly its selection by International Living as the bes t place to retire in the world, which created the headline that attracted tho usands of Americans to the city. As my findings will show in Chapter 4 the media played a crucial role in advertis ing Cuenca as a more desirable migration destination for American s in comparison to other cities in Ecuador and Latin America.
37 CHAPTER 4 THE AMERICAN COMMUNITY IN CUENCA & MOTIVATIONS TO EMIGRATE One of the major purposes of this thesis is to investigate the motivations behind the recent migration of Americans to Cuenca. The limited material on international migration from developed to d eveloping countries has focused on push and pull factors (Croucher, 2009; Croucher, 2012; Morales & Castro, 2008) However, the factors that motivated Americans to migrate to Cuenca may not be the same as the factors that motivated their compatriots to mov e to Mexico or Panama The financial crisis of 2007 s to migrate abroad in order to maintain a decent quality of life. Some retirees may have been influenced to migrate to Cuenca because of its quality of health care. Other unco mmon factors, such as the size of Cuenca and its Thus, more research is needed to elucidate the reasons behind the growing phenomenon of US to Latin America migration as mot ivating factors may differ from case to case For this study, I employed qualitative methods and conduct ed semi structured interviews to allow respondents to elaborate on any issue they felt was important to the question asked. M y hope was th at by using qu alitative methods I would be able to dig deeper into the reasons behind American migration to Cuen ca and provide a more complex explanation of the issues involved. attempt to underst and the motivations behind this migration pattern The word permanently is in quotations because of its subjectivity. A person may move to another country with the intention of remaining there permanently but continuously travel back and forth to their na tive country. For this research, I only interviewed Americans, either
38 native or naturalized, who lived most of their life in the United States and moved to Cuenca with the intent of establish ing their primary residency there I made a concerted effort to interview persons of different ages, backgrou nds, social status, and race with the intent of getting different perspectives on the same issue: the motivation s behind migration. As I will show some of the motivations behind this migration pattern were pr etty consistent among most of the respondents while others were quite unique to the person as well as their particular characteristic I interviewed a total of 36 peopl e for the research: 30 respondents and six key informants. The American respondents we re recruited for the interview by various means including blog posts and introduction made by key informants 1 I interviewed people who had lived in the city for as little as three weeks to as long as nine years. It was important to do so in order to captu re a wide range of perceptions. The six informants were three Ecuadorians and three native born Americans. The three Ecuadorian key informants had an informed perspective on the American community in Cuenca One was a realtor who specialized in renting ho mes to Americans; the other was the Vice President of the Cuenca Chamber of Commerce; and the third was Executive Director of the Ecuadorian American Chamber of Commerce. The three native born Americans were individuals who had been residing in Cuenca for an average of eight years and had significant exposure to the American community through their professional activities. One owned a business where gringos 1 Of the 30 American respondents, two were native born Ecuadorians who became US citizens and lived most of their lives in the United States. They had recently returned to live in Cuenca.
39 congregated ; the other is a former journalist and part owner of a real estate co mpany; and the third owned another real estate company. In this c hapter, I first identify the main demographic characteristics of the Americans I interviewed Subsequently, I then explore the main motivations behind American migration to Cuenca as reported by the interview p articipants 2 In the last section, I examine Demographics Demographic characteristics such as age, marital st atus, economic situation, and race s motivations, and decisions. Hence, it is crucial to identify the main demographic characteristics that make up my sample as well as which of them can be generalized to t he American community in Cuenca in order to understand why they migrated to the city. Age Scholars who have conducted research on American migration to Latin America identify senior citizens as the main demographic group (Croucher 2009; McWatters 2009; Mor ales & Castro, 2008). Whether it is in Mexico, Panama, or Ecuador, these who chose to move to another country not to start a new life, but rather to enjoy their retirement In my research in Cuenca, most of the people I interviewed had reached or were near retirement age Of the 30 Americans interviewed 70% were past the age of 60 As 2 The role of telecommunications and the importance of a vibrant expat community were not spontaneously mentioned by any American immigrant in Cuenca as an important motivating factor in their decision to emigrate. Therefore, these two issues were left out of this c hapter.
40 noted before, I made a concerted effort to interview people of different ages to get different views and opinions regarding Ameri can migration to Cuenca. However, it was clear from the start that the numerical importance of baby boomers unmatched. Although the majority are retired or near retirement age, there are some who are younger and moved t o Cuenca in sea rch of a new life Exactly 20% of my respondents were under the age of 50. All of them with the exception of one, are engaged in profe ssional activities in Cuenca. Half of those under 50 are married with children who were born in the United States and mig rated with them to Cuenca According to these younger respondents, there are other young Americans who also moved to Cuenca with the goal of starting a new life. So it is important to bear in mind that although most of the American community is composed of seniors, there is a relevant portion that is younger and professionally active. Race Another important demographic characteristic among the American s migrating to Cuenca is that the community is almost entirely composed of Caucasians, with the notable e xceptions of some descendants of Ecuadorians or other Latino backgrounds On the occasions that I frequented restaurants or place s where Americans congregate, I rarely saw an African American. This is not to say that there are not African America ns among t he American community; despite my efforts, I was unable to interview a single person of this group The American community appears to be pretty homogeneous in regards to race.
41 Education All of my respondents had at least a high school degree and 63 % of t hem had a egree. There were also a number of respondents with graduate degrees such as MBAs. Altogether, the American community seems to be composed of mostly college educated individuals who had good careers in the US or at least did so u ntil the Great Recession of 2007. Marital Status Half of my respondents were married and another 30% were single, with the remaining 20% either divorced or widowed. Marital status impacts upon the decision to migrate in complicated ways, particularly for tho se who are married M ost of the immigrants interviewed researched a wide variety of places in order to choose where to establish residence. M arried couples must negotiate with their partners to choose a place where both will be happy and satisfied. However conflicts may arise as a result of this kind of international migration since one partner may be unsatisfied with some aspect of their new life and it may not make sense to remain in a place if your livelihood does not depend on it. As previously noted, m ost of the immigrants interview ed did not migrate t o Cuenca to work, but rather to enjoy their retirements One respondent told me that he moved to Cuenca with his wife, but she did not like the pace of life as well as the cool and often cold weather. He loved the city and decided to stay which eventually ended their marriage since his former wife was not happy there Another respondent complained that her husband rem ains in their apartment all day while she spends her time attending multiple Spanish clas ses and enjoy ing
42 ended and he now complains about the every little thing that happens in Cuenca. Spanish Fluenc y Most of the American immigrants I interviewed could not read, understand, and speak Spanish proficiently. In fact, 63 % of the Americans interviewed reported that their Spanish proficiency was either at the t hat they were at the remainder affirmed that they were fluent in Spanish These ratings are, of course, subjective as a person may feel that he or she speaks or understand s better than they actually do and vice versa. Neverthe less, I was amazed at the number of people who told me that the ability to speak Spanish in Cuenca is not important. Many respondents noted that even though Spanish proficiency would improve their social relationships, knowledge of the local language was n ot necessary as they could get by just fine without it. One respondent who had moved to Cuenca three months prior specifically stated that he did not believe that learning Spanish would significantly enhance his living experience in Cuenca. He went on to s ay that he knew Americans in Cuenca who have been living in the city for years and are not proficient in Spanish. Another respondent affirmed that he uses gestures to communicate with locals and does not foresee becoming proficient in Spanish. The lack of Spanish proficiency among the American community was not a surprise as scholars have noted the same phenomenon in other cities in Latin America. In her study of San Miguel Allende and Ajijic in Mexico, Sheila Croucher (2009) affirmed hockingly few of the Americans living in Ajijic and in San Miguel speak Spanish.
43 And this is not unique to only the more recent arrivals, but includes some Americans who have been living p. 64). Morales and Castro (2008) in Mazatlan, Mex ico and McWatters (2009) in Boquete, Panama also report a small percentage of Americans who are proficient in Spanish Hence, Americans in Cuenca are not unique in their overall inability to read, understand, and speak Spanish. A not un important number of my 30 respondents, 20 %, were attending some kind of Spanish language schoo l in Cuenca or studying online to learn the language. Since the majority were seniors, many expressed the difficulty of learning a new language at an advanced age and felt frustrate d after trying for a while. Although many informants demonstrated a sincere interest to learn the local language for their own benefit and out of respect for Cuencanos, it is unlikely that many will ever be come fluent as their daily interactions with the l ocals tend to be limited In fact, some of my respondents had already given up and did not intend to continue taking classes to learn Spanish. Length of Residence in Cuenca I also asked how long respondents had been living permanently in Cuenca. I made su trips to the city before moving definitely. About 94% of 30 had been living in the city for three years or less. I expected many to be recent migrants since Cuenca was chosen by International Living as the best retirement destination in the world only in 2009 and it has mainly been since then that the American media picked up on this news and spread the word. Moreover, about 43% of the respondents were residing in Cuenca for less than one year.
44 Living Arrangements The majority of respondents rent the residence they live in and only about 23 % own their homes in Cuenca. T hese results surprised me as I expected the share of property owne rs to be in par with renters. Based on the perc eptions of Cuencanos I talked to it was widely believed that Americans were purchasing property in Cuenca instead of r enting. One of the explanations for the small share of Americans who have purchased homes in Cuenca is the uncertainty regarding their p ermanence in the city. Consequently, ma ny Americans want to avoid the risk of purchasing a home and then having to wait a long time to sell it if they decide to return to the United States. Another reason is that some respondents were negatively affected b y the housing crisis of 2008 and did not want to take the same risk in a foreign country. Married couples are especially hesitant about owning property in the city A 77 year old male respondent moved to Cuenca with his wife who is 16 years younger and dec ided not to purchase a home because he did not think it was fair to bind his wife with the responsibility of home ownership in case he passed away before her. Additionally, many respondents are nervous about purchasing a home in Cuenca because they do not speak Spanish and do not understand the local regulations. One key informant explained that the main reason he decided to become a real estate agent in Cuenca was because his mother moved to the city before him and was misled by a real estate agent when sh e purchased a home. The other explanation for why the majority seem to rent is the relative low cost of rental in Cuenca compared to the United States. Many informants were amazed by the
45 size of the house or apartment that they could rent for less than $4 00 per month. One retired 67 year old woman Obviously, the price of real estate varies by location and the characteristics of the property, but overall the respondents were ex tremely satisfied by the price of their rental properties. Thus, many Americans reasoned that it was not in their best interest to purchase real estate in Cuenca when they could rent an abode for Motivations Behind Migration In this section, I provide an overall description of the main motivating factors behind American e migration to Cuenca. One of the questions I asked was whether they felt pushed or pulled to Cuenca. The rationale behind this question was to get the respondent s thinking a bout the principal reasons that influenced their decision to choose Cuenca as their destination Each respondent was given complete freedom to explain the motivations behind their decision. In addition, I specifically asked about the importance of economic factors, the Great Recession, and quality and cost of health care in their decision to move to Cuenca. Economic Factors Economic factors were by far the number one reason behind American migration to Cuenca. About 76 % of respondents claimed that they w ere primarily influenced by economic factors. Of the 30 persons interviewed all but five said that economic factors influenced their decision to emigrate, whether or not it was the most important reason Many mentioned other factors as well, but in the en d, what motivated them to move to Cuenca was the fact that they could have a much better quality of life for a fraction of
46 what it would cost in the U nited States, regardless of the state they lived in. David Morrill, co author of Expats in Cuenca: Life in Ecuador and part owner of a real estate company, has resided in Cuenca for the last nine years and has a good insight into the American community in the city. He confided to me that reasons one way or another His statem ent clearly shows that economic factors are a strong motivating factor to everyone and sums up the most important reason behind recent American emigration to Cuenca. Economic factors include the cost of living, the cost of health care, and business opportu nitie s. Each of these categories was mentioned by informants as specific economic factors that motivated them to migrate to Cuenca. Since the majority of Americans that reside in Cuenca are retirees, economic affordability is understandably a concern. M any of the potential migrants travel to the city for a trial period before f inally deciding to emigrate investigating, for example, the cost of living Although Cuenca is not the cheapest city to live in Ecuador, it is still very affordable compared to many other South American cities. Most importantly, American immigrants tend to compare prices in Cuenca to the United States. The phenomenon of price comparison is especially prevalent when Americans search for a residence in Cuenca. M any immigrants are elated when they hear the cost of rental for an apartment or house. As one retiree If I rented an apartment with this size and Additionally, the cost of utilities is relativel y inexpensive for Americans who are accustomed to US prices Based on my own personal experience, it is feasible to spend less than $100 in utilities per month with internet, gas, electricity, and telephone service
47 included. Food expense s can be comparable to the United States if a person shops in regular supermarkets, but food is much cheaper when it is purchased in the mercados market places where everything from fruits and vegetables to different kinds of meats are sold The advantage of buying products at a mercado is that bargaining is part of the game and if you play it well, food costs can decrease dramatically. Of course, in order to bargain one must be proficient in Spanish which is a problem for many of the Americans residing in Cuenca. Profession al Opportunities Although most Americans residing in Cuenca are retired and not professionally active, there are some who specifically migrate d to take advantage of entrepreneurial opportunities in the city. About 36 % of the interview participants migrate d to Cuenca and started their own business. Most of the American business owners I interviewed asserted that their main motivation was to own a business and the decision to move to Cuenca only happened after they realized the lack of feasibility of doing s o in the United States. Surprisingly, not all American business owners spoke Spanish fluently and some were not fluent at all. The fact that Cuenca has received so much international media attention in the last few years encouraged some potential migrants to ultimately make the decision to emigrate They felt that American immigration, along with tourism, would increase spendable income in Cuenca and provide business opportunities to entrepreneurs who captured this niche. Almost all of them had experience in Ecuador but one married couple with a child decided to quit their jobs, sell what they had in the United States and
48 move to Cuenca witho ut ever even visiting the city in hopes of starting their own business. For those who came to Cuenca to search for business opportunities, the lower cost of opening a business was certainly an attractive feature. Although the bureaucracy in Cuenca can be overwhelming, some of the business owners I interviewed were positively surprised by how little money they needed to open their establishments. In fact, all of them stated that they wanted to open their own businesses in the United States, but did not have the financial means to do so. Once they visited or read about Cuenca, the idea of migrating to another country to o pen a business became more tempting and eventually they decided to do so. A young couple in their late 20s and early 30s affirmed with a certain degree of amazement that they spent around $20,000 to open their restaurant. According to them, it would have c ost around $100,000 to open a similar restaurant in Kentucky. Similarly, a couple in their early 60s was pleasantly surprised by how little money they spent to open thei r Caf. Overall, the low cost of open ing a business in Cuenca compared to the United St ates was an important attraction to those who dreamed of owning their own business. The majority of these American owned businesses are in the food sector such as restaurants or cafs. Their menus tend to be oriented to North American tastes, with foods th at are commonly sold in the United States and Canada. These business establishments tend to advertise in websites that are popular among North Americans. The Vice President of the Cu enca Chamber of Commerce said that some American immigrants have been quic ker than Ecuadorians to provide the niche of products that Americans demand Moreover, some immigrants realize d after they arrive d in Cuenca
49 that there was a need for a certain product or service and decide d to offer it either informally through websites o r by establishing a local business Other American immigrants are offering their professional services for sale through websites or word of mouth. It is common to see advertisements for services such as counseling and translation o n websites or posted in local businesses frequented by Americans. I interviewed one gentleman who was a certified marriage and family counselor in the United States and once he arrived in Cuenca, he rented an office and continued his practice locally. Another is a licensed psychi atrist in the United States and continues t o treat patients in Cuenca in his own home For some, the extra income is just an incentive to keep active, while others need to work in order to supplement their income. Quality and Cost of Health Care When aske d why they chose Cuenca to establish their residence, many of my respondents answered that the quality and cost of health care were important factors, if not the main ones About one th ird of the respondents pointed to the quality and cost of health care a s influential in their decision to emigrate. For many senior s the quality of health care was an important consideration in their decision to emigrate. To my surprise, not one single respondent complained about their health care experiences in Cuenca. Som e of them related stories of their experience s with local health care facilities, while others explained how satisfied they were with the qual ity of treatment they received Furthermore some were elated to discover that many physicians received part of t heir training and education in the United States and Europe. According to respondents, many physicians spoke English fluently
50 which obviously made communication much easier. It was also surprising to some American immigrants how extremely attentive many do ctors were with them. A 64 year old respondent confessed how shocked she was when in her first consultation with a doctor in Cuenca, the physician gave her his cell phone number to call him in case of an emergency. Another respondent was taken aback when t he physician that she barely knew offered her and her husband a ride home. Many respondents mentioned the burgeoning cost of health care in the United States and the relatively inexpensiveness of it in Cuenca as a motivation. Before making the final decis ion to emigrate, some Americans spent a few weeks in Cuenca not only as an exploratory trip, but also to experiment with the local health care services and to analyze its costs. A 58 year would have to work u Another respondent who used to pay $800 per month for her health insurance in San Diego affirmed that the main reason she decided it was no longer feasible to live in the United States was because she could no longer afford health insurance. According to by the fact that h er US health insurance coverage was very limited and she would still experience considerable financial hardship if she incurred a major illness. To many American immigrants, including those who have not yet reached retirement age, the cost and quality of h ealth care was a determining factor for their emigration. Although most of the Amer icans I interviewed did not have Ecuadorian health insurance about 26 % of the respondents reported they had purchased health coverage
51 for themselves in Cuenca Health insur ance premiums vary in price depending on a range of factors. However, two different gentlemen in their early 60s whom I interviewed separately stated that they paid around $100 per month for a plan that covered themselves and their spouse s Understandably, the Americans who had local health insurance coverage always expressed their satisf action with the low price paid for a plan which included hospitalization and doctor visits Those who did not have health insurance typically explained that the cost of me d ical care in Cuenca was so low that it was not worth the trouble to purchase a plan. Again, the costs for docto r visits vary, but respondents reported they pay anywhere from $15 25 to consult with a physician. Obviously, these amounts are extremely low fo r the typical American who is accustomed to paying much more for doctor visits in the United States. Not one American who participated in this research complained about the cost of health care in Cuenca and a few made the point of comparing local costs wit h the United States Interestingly, not many considered the fact that the cost for a consultation might be low for the typical American immigrant, but was not necessarily so for the many poor E cuadorians who must survive on a minimum wage of $318 per month ( W henever a respondent marvel ed at the cost of something in Cuenca, it was always in comparison to what he or she would pay in their previous place of residence in the United States. Climate In the interviews, a no t in significant number of Americans mentioned the climate as one of the explanation s for choosing Cuenca over other cities which they considered.
52 A bout 3 0 % of the respondents spontaneously mentioned the climate as a n important factor in t heir decision to m ove to Cuenca. Many explained that they could not bear to live in hot climates and enjoyed the fact tha t Cuenca is located in the Andean mountain range, thus the temperature is cool throughout the year. Several American immigrants welcomed the idea of not having to own an air conditioning unit The website of the Municipal Library of Guayaquil temperature varying between 14 However, the reference to s climate as can be a bit exaggerated In their book Expats in Ecuador: Life in Cuenca Morrill and Castleman (2013) explain the mid to high 60s and low 70s. However, they can also vary from coolish to cold, Although most people mentioned the climate as a positive feature of Cuenca, a few were uncomfortable with the extreme changes in temperatures from cool to cold that often occurred in the city. A 58 year old female re spondent who had recently immigrated arrived for our interview with an intense cold and complained that the sudden changes in weather had severely affected her. Another female respondent confided that her husband consta ntly complained about the local weather and may not want to continue living in Cuenca because of it. T hus, climate can be a positive facto r in to Cuenca but once they arrive, it can also act as an adverse i nfluence on whethe r they decide to stay or not.
53 One of the most interesting explanations offered in the interview s with respect to the attraction of Cuenca was regarding its size. The typical expression that respondents used to refer to the their decision to emigrate. Apparently, many immigrant s wanted to get away from large urban centers but did not necessa rily want to live without entertainment and cultural attractions such as restaurants and museums Therefore, Cuenca was an optimal migrate there Many explained that Cuenca was perfect for someone who did not want to purchase a car. C ar ownership among American immigrants in Cuenca is not very common. The distances are many times short enough that one c an walk. I f walking is not an op tion, taxis are ubiquitous in the city and the costs a re low for the American wallet It is important to note that before moving to Cuenca many Americans considered other cities as well. One retiree mentioned that she visited Medellin, a city that seems to be getting a lot of publicity lately (Peddicord, 2013; Matlack, 2013) with too much A 59 year old former civil engin eer declared that he and his wife investigated other countries such as Thailand, Mexico, Panama, Costa Rica, Uruguay, and Chile He went on to say that once they arrived in Ecuador, they also made exploratory visits to Quito, Ambato, Otavalo, Loja, and
54 Cue nca Ultimately, he and his wife decided to retire in Cuenca because it was not too big and the city had good medical care. Other immigrants explained that they did not wish to live in large cities, but did not consider settling in a small one either beca use they were concern ed about more Americans immigrating. A 66 year old informant mentioned that she lived for 23 years in Lake Chapala, Mexico and witnessed the change the city experienced after so many Americans moved there As she clarified I want a social network with other Americans, but not one so large that Wal Mart feels the need to open a store to cater to he later revealed that Another couple decided against moving to Boquete, Panama because according to emigra Americans appreciate and wish to preserve. They like the idea of walking to most places and enjoy the amenities the city has to offer. F urthermore, some respondents made it v ery clear that they did not want to see who like themselves, yearn to take advantage of all the benefits Cuenca has to offer 3 Thus, s size and lack of American cultural influence are appealing features to many current and potential immigrants. 3 originates from North America and Europe.
55 The People of Cuenca During the interviews, it was common for participants to characterize Cuencanos as friendly, patient, and polite. Many Americans affirmed they were pleasantly surprised by how well they were treate d by Cuencanos from the first day of their arrival According to some respondents, Cuencanos are usually patient with the inability of Americans to speak Spanish and typically go out of their way to assist them. One 66 year old retire e related an anecdote of having asked for directions when she was lost and a n extremely patient Cuencano made sure to personally take her to her destination as he was concerned she would not be able to find it. the United States would do that? The answer is none. I was so impressed with that just knew Cuenca was for m Cuencanos are prevalent among th e Americans I interviewed and it is usually followed by a comparison with the lack of friendliness and generosity displayed by those living in the United States. 4 About 27 % of respondents as a factor for choo sing Cuenca over other cities. Moreover, many of those who did not mention the Cuencanos as an influence in their decision lauded the friendliness and helpfulness of the locals. Some retirees even went as far as to say that Cuenca resembled the United Stat es they grew up in where people were more concerned with each other and community bond was stronger. 4 A couple of respondents were former Peace Corps volunteers in Ecuador who fell in love with the countr
56 Nonetheless there were some informants who were not as impressed with the other Americans were. Some alluded to the fact that many of are extremely aggressive on the road. In addition, others mentioned the disregard that some locals have for standing in lines and the penchant for cutting ahead in front of others. However, the biggest complaint regarding the loc al culture was the lack of punctuality. When pressed to mention at least one negative aspect of living in Cuenca, many Americans referred to how routine it was for locals to arrive to meetings late and sometimes not arrive at all. An American who practices family therapy and medical hypnosis mentioned that he had Ecuadorian clients who did not show up for their scheduled sessions. Surprisingly to him, the same client would make a new appointment and not appear once again. Therefore, the lack of punctuality and respect for appointments were problems that Americans had to deal with and get accustomed to. The Role of the Media As shown in Chapter 3 the media has played a crucial role in publicizing International Living has certainly done its part to It is hard to find an American living in Cuenca who has not heard about International Living ranking Cuenca as the top retirement destination in the world When I asked r espondents if they knew about this designation, e very single American I interviewed answered yes. Some of them had already moved to Cuenca when s election was announced, but the majority had not.
57 The s election of Cuenca as the top r etirement destination in the world garnered attention in a variety of media outlets instance, a former software developer explained that she was working long hours in a stressful project for a major U.S. bank w hen she saw an article on Yahoo with the described s election by International Living and all the advantages the city had to offer. The respondent decided to subscribe to the publication to a ttain more information about Cuenca, visited the city, and eventually opted to retire there. Many respondents sub scribe to International Living and used the information provided by the publication to make an informed decision on whether to migrate to Cuen ca. However, only a few respondents admitted that they were directly influenced magazine. On more than one occasion, respondents referred to International Living as most common accusation was that the publication underestimated the cost of living in Cuenca. Another was that the magazine is only try ing to sell reports and seats at their conference. Live and Invest Overseas which is another pub lication focused on rating international destinations, was often referred to as Nonetheless of the magazine others considered International Living to be fairly accurate in their analy sis of Cuenca. believed migrants must do their own research and visit the city personally to assess its
58 advantages and disadvantages. According to these respondents, the pu blication should serve only as an informational guide, not as a catalyst for decision making. Not surprisingly, some American immigrants were concerned about all the attention Cuenca has been receiving lately. Not only have major publications endorsed Cue nca as a retirement haven, but many of the immigrants themselves have blogs depicting the benefits of life in the Ecuadorian Andes. Some respondents belie ve American immigrants should not entice others to move to the city as they are concerned that a great er influx of foreigners might overwhelm the local culture. Since many of the people I interviewed reviewed publications, web sites, and blogs to attain more information about Cuenca, it seems contradictory that some of these same individuals would be again Whether or not someone views the media coverage of Cuenca favorably, there is little debate about its influence on the recent influx of i mmigrants to the city. The s election as the best place to retire in the world enticed the interest of many Americans who were considering moving abroad. A respondent who was a former local writer for Internation al Living Once the networks spread the news, it created a spark that attracted people to the city. any people are looking for other places to live because of the cost of living in the U S so publications such as I nternational Living have an influence on
59 Disenchantment with the United States Close to 45 % of respondents It is important to note that even though many people affirmed they were pulled to Cuenca, some of them would later mention reasons to e migrate that were more of a pull factor. Thus, the share who were pushed is likely greater tha n or economic. Many respondents explained that their disenchantment with the United States was a motivating factor in their decision to emigrate. Political and economic disenc hantment were the two reasons mentioned by those who were pessimist ic regarding the future of the United States. Some Americans focused their criticism on the Iraq war, lack of personal freedom after September 11 th and the supposed negative international image of the United States. Others criticized the government response to the Great Recession and the bailout of the financial companies in 2008. Many felt the political s ituation in the United States was unbearable. Even though I did not ask questions regarding political affiliation or affinity, it was pretty clear conservative, are represented a mong the American community in Cuenca. In regards to political frustration, some people directly mentioned the policies of former President Bush and current President Obama as being detrimental to the United States One respondent Obama is trying to destroy our country because Other s mentio ned that the wars in Afghanistan and Iraq have given the United States and Americans a negative image. S ome respondents even affirmed
60 that they intend to become citizens of E cuador to be able to travel with an Ecuadorian passport instead of an American one. Some respondents complained about the lack of freedom in the United States. and wanted t o get out of there as soon as possible. Another respondent, who retired fr om a high ranking position in a U S government agency, stated that he got tired of the he felt freer in a socialist nation One respondent attributed his emigration to Cuenca as a desire to escape the s specific individual practiced medi cal hypnotherapy and alternative medicine and felt that his profession was targeted by the U.S. government He believed that certain professions are p ersecuted in the United States to protect the industries dominated by large corporations. H e decided to move abroad after becoming disappointed with the U.S. government for infringing upon citizens t to exercise their profession freely. In regards to economic disenchantment, some respondents believe that the United Stat es is in decline and a complete economic collapse is near. According to them the devaluation of th e US dollar means that the dollar is losing purchasing power and prices will surely increase resulting in runaway inflation. Inexplicably, the same immigran ts who argue such theories have chose n to live in a country where the US dollar has been the official c urrency since 2000.
61 Many respondents believed that a good share of Americans who immigrated to their jobs in the Great Recession or because they did not have sufficient income to retire in the US. Around 43 % of respondents asserted that they th emselves were negatively affected by the Great Recession. Many lost their jobs, others their house, while some saw their retirement savings disappear after the collapse of the stock market. One gentleman explained how devastated he felt when he had to walk away from a financial obligation when he lost his house in a short sale. In a different, but similar disastrous situation, a 65 year old retiree mentioned that she and her husband lost around $300,000 in the stock market. Most of the participants who were negatively affected by the Great Recession were either retired or close to their retirement years. T hus they had limited opportunity to start over or find new employment. Despite the important share of respondents who were negatively affected by Great R ecession, only two admitted that they emigrated from the United States because they could no longer afford to live there The others asserted that they had enough income to live in the US but decided not to In Chapter 5 will be further explored when I analyze the average expenditure of each respondent in Cuenca. Final Remarks on the American Community in Cuenca The American community in Cuenca is characterized by some specific demographic characteristics. Based on my in terviews, which may or may not be statistically representative, t he majority are retired or near retirement age and
62 Caucasian, generally have a college education, do not speak Spanish fluently, and do not own their own home in Cuenca The great majority of those I interviewed had moved to Cuenca within the past three years conforming to my expectations of the recent surge in American emigration to Cuenca While there are exceptions to this overall pattern, the above characteristics paint a good picture of the current American expat community. It is clear that the migration of Americans to Cuenca is a recent phenomenon composed mainly of senior citizens w ho do not intend to exercise a profession. M ost American immi grants want to spend their time on leisure activities and speak highly of their adopted city. Home ownership is not a priority and many aff irm that they do not plan to pu rchase a property since they do not want to have major responsibilities in Cuenca. In terms of motivations, economic factors ce rtainly played a major role in most mentioned the low cost of living compared to the United States as well as health care affordability as important attra ctions of life in Cuenc a. A minority was influenced by the desire to open a business in Cuenca and attracted by the opportunities and low business start up cost s available in the city. Quality of health care was also a concern for many American immigrants and all of those who ha ve used medical services in the city were satisfied by the care and attention they received. Most of the respondents did not have health insurance as they felt that costs were sufficiently affordable and did not see the necessity to purchase it. However, t ho se who did have insurance were glad to pay a low premium for the service.
63 e migrate. The majority of those interviewed felt that the local climate was hospitable. The medium size of Cuenca was attractive to many immigrants as they enjoyed living in a city where they felt reasonably safe and could walk to their destinations. Many immigrants declared the y were attracted to Cuenca because of its people American immigrants mentioned how typically friendly and patient Cuencanos are, but the lack of respect for formal appointments. T Every one I interviewed used media s ources to attain more information about the city. Some people were extremely negative about the dissemination of Cuenca as a retirement haven, especially on the part of International Living. Others had a more positive opinion of the publication. Most impor tantly, every single respondent as the best place to retire in the world and some were subscribed to the publication and had attended its conferences. Finally, various Americans felt extremely disenchanted with the future ec onomic and political prospects of the United States. Respondents complained about the bailout of the banking system, the wars in Iraq and Afghanistan, and the American political system as a whole. Some were not confident about the short term economic and p olitical stability of the United States. An important share of respondents (43 %) affirmed that they were negatively affected by the Great Recession. Some lost their jobs, houses, and savings as result of the financial crisis. Many of those affected were re tired or near retirement age and felt
64 insecure about the possibility of living in the United States on their retirement income. Hence, many were pushed to retire outside the United States and Cuenca presented a good oppo rtunity to live comfortably on their income. Many respondents pointed to the but only a couple of them identified themselves as s uch
65 CHAPTER 5 IMPACT OF AMERICAN IMMIGRATION ON CUENCA What has been the impact of American immigratio n on Cuenca? Th e second goal of my research is to answer this question. Although American migration to Cuenca is a fairly recent phenomenon and the size of the American community is not yet a significant proportion of the population, it is important t o ana lyze what the impact, if any, has been thus far. Many Cuencanos have noticed the influx of American immigrants in recent years and attribute to them some of the changes the city has experienced. As in Chapter 4, I draw upon the results of the semi structur ed interviews with American immigrants and key informants to analyze how the American community has impacted Cuenca thus far. As part of the interview, I asked respondents directly their perception of the impact of American immigration on the city, as we ll as how they viewed their fellow compatriots My intention was to try to understand how these immigrants viewed the mselves and their co mpatriots with respect to such issues as their economic impact, the extent of cultural exchange, and whether they were contributing to the city through volunteer activities i.e., whether they considered that Americans sometimes acted in culturally inappropriate ways The interviews with key informants also p rovided informed local opinions to triangulate the perceptions of American expats. In these interviews I asked specific questions about any investments made by Americans in the local economy and if locals are in anyway taking advantage of the influx of im migrants to expand their businesses or establish new ones
66 In this c hapter I first discuss how American immigration to Cuenca has impacted real estate prices and the n turn to the broader economic environment The subsequent the cultural impact, and American v olunteer activities. I end the c hapter by considering the overall impact of American immigration on Cuenca. Real Estate Cuencanos have noticed the increase in real estate prices in the last few years. In the l ast year alone, 2012 2013, the price of land and construction costs have increased an estimate d Although the cost per square meter can vary greatly in Cuen ca, it can surpass $1000 in some areas which is considered by Cuencan os to be very high Departamentos suben the real estate agents interviewed, the increase in real estate prices can be explained by a number of factors: rise in the cost of construction materials; remittances from abroad; investments by returning Ecuadorians who had emigrated ; the greater availability of government credit; and American immigration. The question relevant to this thesis is how much of the increase in real estate prices in Cuenca can be attributed to American immigration. The impact of American immigration on the local real estate market is a common theme in Cuenca. In the informal conversations I had with local residents, many attributed the increase in real estate prices directly to American immigration. The image of tho usands of retired gringos purchasing a home is a facile explanation for the perceived increase in real estate prices in Cuenca. However, as I discussed in C hapter 4 it appears that only a minority of Americans in Cuenca
67 purchase the homes they live in. Th is finding is supported both by my inter views with Americans in Cuenca and with l ocal real estate agents Three of my key informants worked for or owned real estate agencies and had Cuencano and American clients. All of them rejected the commonly held not ion that Americans were responsible for the increase in local real estate prices They held that American immigration had some impact on real estate prices, but not to the extent believed by many Cuencanos and some Americans. One owner of a real estate a gency explained on to say that Ecuadorians returning from the United States and Europe had a greater impact on the real estate r about 35% of the real estate purch ases in r ed indirectly as many returning Ecuadorians have adopted American customs and tastes and therefore choose to live in condos. Thus, this would help explain the in crease in demand for condos and the subsequent rise in Many Cuencanos who had migrated overseas have returned permanently to Cuenca as a result of the financial crisis that e rupted in the US and Europe in 2007. The Andean Survey on International Migration and Remittances found that 24,115 natives from the province of Azuay returned home from abroad since the beginning of the 2007 financial crisis The number of returning Cuencanos far outweighs American immigration and thus their impact on housing prices is likely greater
68 We must also consider the influence of remittances on the increase in real estate prices in the city. As I mentioned in Chapt er 3, remittance s have a substantial influence on the economy of Cuenca. According to the Ecuadorian Central Bank, in 2012 Cuenca receive d $418 million in remittances ( Evolucin de las Remesas 2012). Scholars who have studied remittances from Cuencanos ab road have noted that a good portion of the amount sent back is used to purchase properties in Cuenca and surrounding areas or to improve the homes of family members (Jokisch & Pribilsky, 2002 ; Weitzman, 2011 ; Miles, 2004 ; Klaufus, 2012 ) When he visited Az ogues, a town about 20 miles from Cuenca, Weitzman (2011) described some of the houses built with money from remittance s palaces of vulgar, garish opulence, with pastel colored walls, orange roofs, imposing black gates, and pillars topped off with sto ne (p. 228). This is not to say that every Ecuadorian abroad builds opulent mansions in their native country but it illustrates the importance that many Ecuadorian migrants give to building homes in their native land both to p repare for their return and as a symbol of the success of their migration project. Thus, their demand also puts pressure on real estate prices. Not all Americans can or are willing to buy expensive properties. An owner of a real estate agency affirmed tha considers that Cuencanos are the ones who purchase the most expensive properties and many times his American clients cannot afford the nice places t hey w ould like to live in Cuenca. He blames the increase in the cost of construction materials for most of the inflationary pressure on housing prices.
69 From the interviews with local real estate agents as well as reports it appears that th e share of Americans renting homes is much higher than those who purchase one As mentioned in Chapter 4 only about 23 % of respondents stated that they owned the home they lived in. T hree of the four real estate agents interviewed also affirmed that their American clients who wanted to rent outnumbered those looking to purchase by four to one, which is pretty close to my own interview results. The other real estate agent only worked with rentals, so she could not determine the ratio of buyers to renters. In terms of the impact of American immigration on rental prices, all the real estate agents had a similar position. They believed the impact was small and not as great as many locals claim. The realtor who specialized in rental properties noted that the pr operties she manages have not gone up in price in the last five years and in some cases have gone down. Moreover, she claims that some Americans are not competing with middle class Cuencanos since the former rent low quality apartments, around $200 or less American immigrants are also taking advantage of the market opportunity provided by the influx of their compatriots. I interviewed two American immigrants who ity before deciding whether to make a permanent move. They saw a n opportunity to make money from the increase in the number of people seeking rentals in Cuenca. They rented a property in their own name and then subleased it to people who wanted temporary o r long term rentals. However, this seems to be a small niche that
70 some Am ericans are taking advantage of and not a widespread phenomenon, so the effect on rental prices is probably minimal Another important inf luence o n real estate prices is bargaining p ower. It is important to remember that bargaining over prices is very much a part of the local culture. Whether you purchase food at a mercado buy a car, or rent an apartment, locals expect to negotiate prices. Thus prices can vary significantly as a resu lt of bargaining skills. Since the majority of Americans interviewed do not speak Spanish fluently or at all, their ability to negotiate prices is negatively affected. Consequently, non Spanish speaking American immigrants may end up paying more to purchas e or rent a home than locals Some blogs owned by Americans in Cuenca warn newcomers to negotiate and not accept the first price offered to them. Several Americans interviewed, especially those who had resided in the city longer and had some Spanish fluenc y, were concerned that some of their compatriots did not do the appropriate research and paid whatever price was asked. Many also expressed their concern in raising housi ng prices in the city. The effect on rental prices depends on a variety of factors such as the availability of rental homes and the negotiating skills of each renter. One realtor believed that American immigration had an impact on rental prices, albeit sm all, because some Americans did not bother to inform themselves about rental prices in the city. Instead, they paid whatever seemed reasonable in comparison to what they would have paid in the United States. However, he believes this phenomenon has decreas ed as a result of the proliferation of gringo websites and blogs about Cuenca.
71 Some Cuencanos see the increase in immigration as a challenge in terms of housing availability They fear that if immigration continues to increase there may not be sufficient dwellings available to meet the increase in demand. If demand outpaces supply, rental prices would necessarily increase. The local newspaper El Mercurio published an article which pointed to the economic benefits of American immigration, but also warned ab out the dangers of an increase in the demand for housing (Sorensen, approved for home construction jumped from 752,764 in 2009 to 1,406,000 in 2012 is represents an 87% increase in only three years. It appears that construction in the city is booming, but it is hard to determine if the increase in supply is enough to meet the demand for housing and thwart the rise in real estate prices. However, this could be a factor explaining the perceived increase in the cost of building materials. The effect of American immigration on housing prices in Cuenca is difficult to measure precisely as there is not official data on the number of Americans who purchased h omes in the city. My research, however, suggests that t he idea of the majority of Americans purchasing a home in Cuenca seems to be a myth and that their impact on housing prices is probably small as noted by most realtors Time will tell if in the long r un sufficient Americans w ill e migrate to Cuenca to make housing unaffordable and push a significant amount of Cuencanos out of the market. Macroe conomic Impact As previously noted most of the American immigrants in Cuenca are retirees who migrated due to economic reasons. Many felt they could enjoy a better quality of
72 life abroad while spend ing less than in the US Since the cost of living in the United States is higher than in Ecuador, many Americans felt tha t the amount of money they spent locally was l ow compared to what they were used to spend ing in the United States. Thus, generally the idea was to live better for less. When I asked respondents how they believed the American community was impacting Cuenca, many pointed to the positive economic effect of thousands of immigrants spending money locally. As one respondent stated retail sales must have believed that relatively high disposable income permits the m to travel throughout the country and through their spending have a positive impact on the national income. Each respondent was asked how much they spent monthly in Cuenca in order to estimate how much each American immigrant co ntributed to the local eco nomy. When the person interviewed answered for the couple, the amount was divided by two to get an average per capita estimate According to my results each American immi grant spent an average of $1,096 per month. Thus, by multiplying this average by the lowest estimate of Americans currently residing in Cuenc a (2,500), over $2.7 million is being introduced into the local economy every month. Many respondents claimed that the majority of recent arrivals from the United Thes are non affluent Americans who were forced to migrate as a result of a job loss or because they did not have sufficient resources to retire in the United States. Howeve r, only 27 % of those who arrived within the last three years claim ed they spend less than $1,000 per month. For
73 comparison purposes, $1,000 is more than three times the minimum wage salary of Ecuador, which curren those who spend les s than two minimum wages ($636) as an econom only about 15 % of the people who arrived within the last three years can be considered such. Obviously, the sample of people interviewed is a small proportion of the American community in Cuenca. Nevertheless based on my interviews it would seem that only a relatively small share of recent arrivals could be classified as economic Irrespective many people believed the majority of Americans who arrived recently are economic refugees. One key informant stated that he has heard from representatives of the Ministry of Foreign Relations (MRE) that the economic benefit from American immigration is dwindling. According to him, representatives from the MRE have noticed the increas o not spend much money locally, except for the minimum required to sustain themselves If this is true, then the economic benefit of American immigration, in terms of expenditure, may not be as large as my estimates above would suggest Increase in Prices Besides housing prices, many Cuencanos and Americans believe that American im migration has contributed to an overall increase in prices in the city. It is hard to know how much American immigration contributed to the since no rigor ous studies have been carried out on this topic Thus, I can only relate the opinions expressed by Ecuadorians and Americans about the impact of American immigration on general price levels in Cuenca
74 First, it is important to consider if the inflation rat e of Cuenca is actually higher than the national average. According to INEC (2014), in 2013 stood at 3.46%, which was 0.76 % higher than the country as a whole, 2.7% ( Reporte Mensual p. 8 ). For comparison purposes, the inflation rat e of the two largest Ecuadorian cities, Quito and Guayaquil, in 2013 was 2.99% and 2.94% respect ive ly ( Reporte Mensual 2014, p. 8). There are many factors that influence the prices of goods and services such as supply and demand. The idea expressed by t hose who contend that American immigrants have increase d the demand for products and services, and that supply has not increased sufficiently to meet this new demand. However, the most common complaint I heard in my informal conversations with Cuencanos was not about the basic elements of supply and demand Instead, the complaints focused on two issues. The first was that some Americans paid whatever was asked of them without negotiating prices. The second was that many Americans have the penchant to over tip. The two actions supposedly contribute to increasing the price for products and services in Cuenca. T he importance of bargaining has already been explained Cuenca still has many mercados where people can negotiate prices. Because of the language barrier some Americans cannot negotiate prices or at least, it makes it more difficult for them to do so. Many Americans are accustomed to only shopping at retail supermark ets in the United States, which are also available in Cuenca, where prices are set. Hence, many do not have experience in bargaining for prices of basic products.
75 Some Cuencanos complain that the inability of Americans to negotiate prices increases it for everyone. The argument is that sales people may get used to selling products for a certain price, presumably higher, since some Americans are willing to pay whatever they ask. I am skeptical about this argument as it is hard to believe that about 2,500 Am erican immigrants would have this much economic power in a city with a population of around 500,000. Nonetheless, some Cuencanos believe it is indeed possible. Some respondents also believed the a bove argument. In fact, about 1 7 % of them affirmed that t hey believed American immigrants have contributed to the increase in prices in Cuenca. Ecuadorian informants also corroborated the view that many of their family and friends believe American immigration has contributed to the increase in the general price level. However, they also believed that more recent arrivals are better informed and research prices more than earlier American immigrants. They attribute this to the greater degree of information avail able o n gringo web sites or blogs which inform American s regarding local customs and prices for common goods. penchant to over tip at restaurants or with other service providers. Three key Ecuadorian informants mentioned this issue as a common complaint against American immigrants in Cuenca. Some Cuencanos argue that when Americans over tip, servers tend to prefer to serve gringos rather than locals as they will expect to get a higher tip for their service. Cuencanos may receive less att ention and an inferior service as a result.
76 In Ecuador, the restaurant bill in mid level or upscale establishments will include a 12% value added tax and a 10% service tax. The service tax presumably covers the tip for the server. If a n Ecuadorian patron wishes to leave an extra tip, it is usually some small change that will not amount to more than a couple of dollars. Some Americans, either because they wish to or because they are unaware of local customs, tip servers 15% or more on top of the amount ch arged by the restaurant. Obviously, servers appreciate the extra gratuity. Some Cuencanos resent the extra gratuity as they feel it affects services and prices. One American respondent had a different theory. She believes that some Cuencanos resent it when Americans tip well It is difficult to assess if American immigration has been substantial enough to rate It is plausible to think that in some aspec ts Americans may have increased the costs of certain consumer goods and perhaps, services. But i t is also hard to substantiate and tendency to over tip has contributed to the increase in prices. However, it i s important to note the discomfort that these situations can cause locals. It could very well be that Cuencanos are blaming the most obvious target, American immigrants, for the rants are better off than they are, it is natural to expect some sort of resentment. M any Americans of course, do not want to overpay for products and services. M any locals take advantage of the fact that Americans are unaware of the costs of goods and s ervices and charge them more than they would an Ecuadorian. In my interviews with Americans, many of them complained abo
77 The biggest complaint w as usually against taxi drivers. Thus, the desire to overpay or tip is not unifo rm among all Americans in Cuenca. American immigration pumps money into the economy, which is positive in terms of greater sales and more demand. It also provides an opportunity for local merchants and entrepreneurs to increase their sales and create new complaints should not fall on deaf ears however. More demand if not met by increased supply, can also lead to inflation. It is especially frustrating when inflation product or service than what is actually worth. It is important to understand and respect local customs and to be aware of the costs of goods and services to maximize the benefits that American immigration can bring to Cuenca. Business Openings The extra revenue poured into the economy as a result of American immigration ward community are common throughout the downtown area. Most of these businesses are in the food industry su ch as restaurants or cafs. Although precise data on the number of such businesses is unavailable my interviews suggest that the majority of these are either owned by Americans or by Ecuadorians who previously lived in the United States. I interviewed e ight individuals who ow n a restaurant or caf in Cuenca. They were all native born Americans, with the exception of one who was a native of Ecuador, but a naturalized American citizen. All of them said that the increase of American immigrants in Cuenca inf luenced their decision to open their restaurant or caf. Although they all recognized the importance of American immigrants as a percentage of
78 their clientele, they stated that it was crucial to attract Cuencano clients to thrive in the long term. One resp ondent affirmed that it was important to establish a relationship with Cuencanos as American immigrants are very mobile and may not remain in the city in the long run. Thus, for American business owners the apparent way to be successful in Cuenca is to hav e a mix of Cuencano and American clients. The influx of American immigrants has created an opportunity for real estate agencies as well. Many real estate agents specialize in renting or selling property to Americans. One realtor explained that the rental market in Ecuador is complicated as there are not specific laws about rentals and those that exist are not very clear According to he r, many Cuencanos do not like to rent properties to Ecuadorians Once Cuenca became popular with foreigners, rental prope rties became more available in the market. Thus, she was hired to manage the se rental properties geared to foreigners and other agencies are doing similarly The effect of American immigration on businesses seems to be very selective. Restaurants and real estate agencies appear to have benefited most as a result of the increase in demand for their services. Immigration lawyers, doctors, dentists, and other service providers who speak English have also probably benefitted from the increase in American immig ration. Since most Americans in Cuenca do not have cars transportation services such as taxis may have seen their business volume increase as well However, both the Vice President of the Chamber of Commerce and the Executive Director of the Ecuadorian Am erican Chamber of Commerce in Cuenca do not think that American immigration has had a substantial impact in terms of business
79 creation in the city They believe Americans do support the local economy by spending their incomes, but the business environment has not been substantially transformed either positively or negatively as a result of American immigration. Most local businesses have continued to focus their efforts on Ecuadorians. In some cases, such as banks, businesses have sought to hire people who speak English, but that seems to be about as far as local businesses have gone to cater to Americans. Financial Investments Americans do not appear to be investing in Cuenca, with a couple of exceptions. The first group is those who purchase their homes, which obviously is an investment. The second group is those Americans who put some of their money in Ecuadorian certificate of deposit s (CD) or savings accounts. I did not expect to find many Ame ricans p lacing their money in financial institutions in Ec uador. The main reason is that Ecuador experienced a major financial crisi s in 1999 which ultimately resulted in the country adopting the US dollar as their instability some Americans ap parently do not feel weary of investing in the Ecuadorian financial system. About 50 % of interview participants had a savings account and/or a CD in Cuenca. Most of them seemed to prefer to invest in CDs or savings accounts through Cooperativa s which is similar to a credit union in the United States. Participants stated that they were attracted to the cooperativa because their interest rates tended to be higher than what the banks offered. By putting money in local financial institutions, Americans cont ribute to the increase in credit availability in the country. Theoretically, the in crease in deposits can
80 be used by financial institutions to lend money to individuals or local businesses. In turn, the money borrowed could be used by individuals to purcha se a house or start a business. Business owners can use loans to expand their own operations and hire new workers The bot tom line is that Americans contribute to such possibilities by putting their money in local financial institutions. I doubt however that many of them invest all of their savings locally Based on their testimonials, it seems that most put some of their money in local financial institutions in order to get a decent return, but do not deposit large amounts. Except for those who had an official investor isa and by law need t o maintain $25,000 in a CD for one year, most of the respondents mentioned that their deposit s were not significant enough to put them in danger of bankruptcy in case they lost it. While I w as doing my research i n Cuenca a scandal erupted involvin g a local Coopera The cooperative was liquidated in June 2013 as a financial statements and potential ill egal activities such as money laundering Many Americans had invest ed in Coopera because of the relatively high interest rates offered by the company One respondent reported that he had a CD account in Coopera which paid 10.5% interest per year. For comparison purposes, according to the website of the Ecuadorian Central Bank the average yearly interest rate for a fixed income account is 5.35% for a period longer than 361 days 13) According to one popular gringo website in Cuenca, Cuenca High Life, as many as 300 North Americans had accounts in Coopera However,
81 t here is no official government information regarding the number of American s who had accoun ts with Coopera I ask ed respondents if t hey had an account with Coopera, and o ver 18% had at least one account and of these, two people had more than $10,000 deposited Most had less than $10,000 and expected to get their money back without a problem As of December 2013, the government has returned a total of $35 million to those depositors who had deposits up to $10,000 which represented 99% of all The two respondents who had more than $10,000 were still attempting t o get their money back. It will be interesting to see if Americans who have invested in financial accounts in Cuenca will continue to do so as a result of the Coopera scandal. Future American immigrants w ill likely hear about it, and may not choose to put their money in local financial institutions as a result. It is rational to expect that some Americans will refrain from investing in financial accounts fearing similar outcomes. As mentioned in Chapter 4 many respondents were hurt by the 2007 financial cr isis in the United States and have a deep mistrust of the financial industry. The American influence in the Ecuadorian financial sector is likely small as most of them are retirees who receive their pensions in US banks It is unlikely that many of them a re risking the bulk of their assets in Ecuadorian financial institutions. However small it may be, it is still a positive development for Cuenca that some of them are investing in Ecuadorian assets. I f American migration to Cuenca continues, the city will benefit from having more financial resources at its disposal
82 A key American informant who has lived in Cuenca for the last ten years explained that as more Americans move to Cuenca, other individuals also arrive in the city t o take advantage of this phenomenon. According to him, some individuals do not have good intentions and want to take advantage of Americans, especially retirees, who are not completely familiar with the local investment envi ronment and may be easy targets. Wherever you find Americans, th e snake oil salesman rears his ugly head During the interviews, some respondents mentioned the presence of some individuals of dubious character who presented investment opportunities to American immigr ants in Cuenca. mines. The way it works is that an investor is to put some money upfront and once the mine starts producing, he or she is to get gold in return. One realtor said that he had a coup le of clien ts who had invest ed in gold mines, but he did not know the result s Another respondent related how two men had collected over $1 million from investors, but then refuse d to show the gold mine to those investor s who wanted to see it. The gold min e investment story was mentioned a few times by respondents as well as k ey informants, but I did not interview anyone who had invested in such an endeavor, thus I cannot confirm this phenomenon and its severity Some respondents blame the inexperience of A merican immigrants for their vulnerability to scammers. As a 66 year old retiree respondent act like Americans who move to C uenca do not have much travel ex perience outside the United
83 States. Another respondent claimed that he met American immigrants in Cuenca who never had a passport before they moved to the city Although an inexperienced traveler may be an easier target, anybody can fall victim to scammers So if there are Americans who have been tricked into bad investments, it is very likely that both experienced and inexperienced travelers were targets. It could also harm Ecuadorians as there is no reason to believe that scam artists will only target Ame rican immigrants. If American scammers do exist in Cuenca as some res pondents claim, it could potentially affect the such issues. The famous novel T he Ugly American written by Eugene Burdick and William Lederer, is a fictional story based on the US involvement in Southeast Asia. In the book, a Burmese journalist called U Maung Swe change seems to come over Am ericans when they go to a foreign land. They isolate Lederer, 1958, p. 145). The latter p oint is the one I will explore in this section as the Since the book was published many people began to refer to Americans who Respondents reported many stories in regards to the inappropriate beha vior displayed by some American immi grants. Both American and Ecuadorian key informants spontaneously mentioned the problem of ugly Americans in Cuenca.
84 About one fourth of respondents mentioned that they had heard about cases of ugly Americans in Cuenca and were concerned about how it may reflect on the image of the overall community. Most of the cases involved Americans being rude, loud, and/or culturally insensitive. The stories also focused on American arrogance and a lack of understanding of their new surroundings. Another problem is that some Americans expect Cuencanos to speak English. I have mentioned previously how few respondents spoke Spanish fluent ly The combination of a new culture and lack of fluency in the local language can be frustrating for American immigrants. One key i nformant recounted an anecdote of an American the Ecuadorian realtors explained that many of her clients expected Cuencanos to speak English fluently. Needless to say, it is nave for some Americans to think that the majority of people in Cuenca speak English fluently. The incidents involving ugly Americans have caught the attention of the Ministry of Foreign Relations (MRE) Two business owners who participated in the int erviews stated that they were approached by the Director of the MRE in Cuenca to discuss the incidents involving ugly Americans. According to them, the Ministry was concerned about the increase of such incident s and how it may affect the relationship betwe en Cuencanos and Americans. One of the business owners said he heard from the not a day goes by when they do not receive complaints regarding gringos. This same business owner was invited by the MRE to become part of a comm ittee composed of Americans and Cuencanos T to
85 find solutions to decrease the potential of conflict between Cuencanos and Americans. The ideas developed by the committee may be adopted by the MRE in an attempt to decrease the ca ses of ugly Americans in Cuenca. A key informant suggested that the problem of ugly Americans arises from the fact that many of those who have arrive d recently from the United States are economic refugees. W hen he initially moved to Cuenca, in 2003 most o f the Americans he met were experienced travelers with a n open mind and a real interest in the local culture However, now he sees many Americans who are motivated to move to the city strictly for economic reasons and without any real interest in learning about or adapting to the local culture. This theory was shared by a few other respondents as well. Moreover, economic refugees may and eventually return to the United State s O ne informant who has lived in the city for over four years estimates that out of 100 American immigrants who move to Cuenca, 40 will leave wi thin two years. He attributes this pattern to a lack of cultural understanding and to the desire of many immigrants to replicate life in the United States for les s money. However, Cuenca is culturally different from the United States. Some things such as the pace of life, do not resemble the United States. In order to be happy in Cuenca, Another informant who works as real estate agent believes many Americans were unhappy in the United States and heard about the advantages of life in Cuenca through the media. Many of them decided to emigrate because they thought they could be happy somewh ere else. However, these immigrants may find other things that can
86 make them miserable in Cuenca, such as noise and a slower pace of life. This realization causes frustration and anger which increases the cases of ugly Americans. T he case s of ugly American s have created a situation sufficient that the MRE has felt it necessary to reach out to American business owners to come up with solutions to the problem. Most respondents affirmed that the majority of American immigrants were good and polite people who w ere sincerely interested in the local culture and behaved well in the city. I did not hear of any extreme cases of animosity between Americans and Cuencanos and the relationship seems to be generally good. The exceptions are the cases of ugly Americans dis cussed above Many times the exception become s the rule and the American community does not want to be viewed as rude and disrespectful to locals. Cultural People who migrate to foreign countries bring with them practices and customs that are common to t heir native homeland. Americans are no different in this regard. Cuencanos were already exposed to ideas and consumption patterns from the United States even before America ns began settling in their city through tourism, the media, and migration Therefore American culture is not completely foreign to Cuencanos. As many other places in the world, Cuenca has naturally adopted some American cultural and consumption patterns. Local teenagers listen to American artists and are fully aware of the latest cultura l trends in the United States. The city has which origin ated in the United States. American television channels are also available to Cuencanos who sign up for cable service. T hese ideas and consumption patterns were
87 introduced not only by the media and entrepreneurs, but also by Cuencanos who migrated to the Unite d States and frequently return to visit their relatives and friends. Americans who move to Cuenca come from a variet y of backgrounds and from different parts of the United States. Since the majority are seniors, they are usually retired and with plenty of free time to engage in a wide range of activities. M any respondents declared that they were en gaged in a range of ac tivities, including local cultural activities. In my interview with the Vice President of the Cuenca Chamber of Commerce, he mentioned that American immigration was extreme ly beneficial to the cultural activities in Cuenca. According to him, before American s began migrating to the city, the cultural activities were in financial trouble due to a lack of attendance. After American immigration increased, the cultural events att racted larger crowds and thrived. Other informants mentioned that the inc rease of American immigration to Cuenca has pushed local authorities to improve the conditions of parks and improve security around common areas. One American business owner interview ed stated that the park where her caf is located used to be dirty and abandoned. Once she opened her business and the caf became popular among Americans and other gringos the city cleaned up the park and it became more secure for everyone. As she stated As already mentioned, the local media has widely disseminated desirable features. Locals are proud of some res pondents once Americans arrived in the city and started to participate in
88 city of ficials initiated a major effort to increase the si dewalk space, rebuild major parks, and are in the process of building a light weight tram system 2013 ; Clavijo, 2013; Castillo, 2013 ) While i t is uncertain if American immigratio n had any direct impact on these decisions, some people seem ed to think so. Volunteer Activities In the interviews, some respondents mentioned the volunteer work in which they a re engaged as another example of the positive impact of American immigration The volunteer activity that came up most often was an initiative to neuter stray dogs that roam the city. It is common to see many dogs roam free around Cuenca and a few Thus, some American immigra nts decided to raise funds to catch and neuter stray dogs. Several respondents also mention ed the Hearts of Gold F oundation in Cuenca. education and resources necessary to 2013). Many Americans donate to the organization and are engaged in its philanthropic activities. The foundation is engaged in a variety of projects such as infrastructure and home improvement, child sponsorship, and a drive to collect u niform and school supplies Respondents cited the foundation as a testament of the positive impact of American immigration to Cuenca. Other respondents also mentioned that they were involved in church groups. As part of the church group, they were involved in volunteer activities and donation drives
89 to help poor Cuencanos. A few mentioned that they volunteered in hospitals and other organizations teaching English. Volunteer work is a good way for Americans to integrate into the loc al community. Although many do not speak Spanish fluently, it is still possible to work as a volunteer or to donate money to worthy causes. It also helps Cuencanos and Americans learn about each other and develop as a bi cultural community. The volunteer w ork on the part of many Americans is definitely a positiv e contribution to Cuenca. Concluding Thoughts on the Impact of American Immigration to Cuenca It is difficult to assess the full impact of American immigration to Cuenca particularly, since this im migration pattern is relative ly recent. The great majority of American immigrants in my sample have resided in Cuenca for less than three years with a substantial share having move d to the city within the last year. Since Americans compose an extremely s mall part of the population in Cuenca, their impact may be marginal and therefore particularly hard to measure. Nonetheless it is important to understand t he nature of it since positive impacts should be encouraged, while the negative ones must be correct ed to maximize the future benefit of this immigration pattern. In this c hapter I examined the impact of American immigration on real estate prices and on macroeconomic variables such as monthly expenditure s the potential increase in prices, business open investments. I also analyzed the case of ugly Americans in Cuenca. Finally, I examined the cultural impact of American immigration on the city and how volunteer activities are a positive way for Americans to contribute to Cuenca
90 To sum up, with respect to real estate prices my results show that only a minority of Americans purchased their homes in Cuenca. The real estate a gents interviewed acknowledged some impact of American immigration on real estate price s, but claimed the impact was very small. They all c onsidered that returning Ecuadorians from abroad, mainly from the United States and Spain, had a much bigger influence on home prices. The interviews also s uggest that the number of Americans who rent is much higher than those who buy; t he ratio seems to be four to one. R ealtors also believe the impact on rentals prices has been marginal. If prices have gone up it is because some Americans do not negotiate prices as much as they should and accept whateve r the landlord asks for the rental property. However, one realtor believes that the increase in gringo web sites and personal blogs about living in Cuenca has decreased the tendency for Americans to overpay for rentals. Nonetheless, some local newspapers h ave shown concern about the increase in the demand for homes and how this can impact prices. They conclude that an increase in American immigration presents a challenge in terms of housing and city officials must be attentive to possible negative outcomes. Their concern is that supply must increase at the same rate as demand in order for prices to remain stable. With respect to the impact o n the local economy, I estimate d that each expat spends an average of $1,096 monthly meaning that American immigration contributes over $2.7 million per month to the local economy. While this figure is not insignificant, the magnitude entailed depends on the composition of immigrants and how many have high disposable income.
91 M any respondents claim that the majority of rece nt American arrivals are economic refugees. My research result does not support this theory Nonetheless, some respondents claim that the economic benefit of American immigration may be waning as a result of an increase in economic refugees. Many responden ts also believed that American immigration has contributed to te. Cuencanos complaints focus on some Americans lack of bargaining skills and penchant to over tip. They assume that these actions contribute to the increase in relative pr ices. I am not fully convinced this is the case since it is unclear how many American immigrants do not bargain and/or over tip. Furthermore, m any Americans complain about the higher prices they are charged just because they are foreigners and do not want to overpay for products and services If American immigration is having a significant impact on the inflation rate it could also be an unintended consequence of local merchants charging them higher prices. A positive effect of American immigration is the opening of new businesses since it generates employment and provides income to local workers I interview ed eight American citizens who owned a business in Cuenca. They had a significant expatriate clientele, but recognized it was also important to attr act Cuencano clients if they wanted their business to thrive. The businesses which seemed to benefit the most from catering to expats are concentrated in two sectors: food services and real estate. Both the Vice President of the Chamber of Commerce and the Ex ecutive Director of the Ecuadorian American Chamber of Commerce in Cuenca considered that American immigration had a small impact on the opening of new businesses. Therefore, the overall benefit in terms of business and job creations seems to be small.
92 Su rprisingly a considerable share of respondents invested in CDs and/or savings account in Cuenca. Most of these investments were in Cooperativas The majority of respondents affirmed they were attracted by the high interest rates, but did not put all of the ir assets in Ecuadorian financial institutions. The impact of American immigration on the financial sector appears to be small as most respondents were retired and had the bulk of their assets in financial institutions in the United States. The most obvio us negative impact is the case of ugly Americans. The incidents have become infamous in the community and have caught the attention of the MRE. The incidents typically occur out of ignorance with regards to local custom s and out of frustration as result of Some blame the increase of economic refugees who moved to the city solely for its perceived economic benefits. Although every respondent confirmed that most American immigrants behave well, are polite to locals, and enjoy their lives in Cuenca, they were concerned about are detrimental to the relationship between Americans and Cuencanos and are a negative consequence of American imm igration in the city. T he cultural impact is subject to interpretation. Cuencanos were already accustomed to or at least knowledgeable of American culture, due to the American influence around the world through media and cultural events and of Ecuadorian migration to the United States. Ecuadorians who return to visit or resettle permanently come with American ideals and customs which they transmit to their families and friends.
93 The Ecuadorian key informants believed that American immigration helps cultur al exchange which further enhances cooperation and understanding between the two cultures It also prepares Cuencanos to better integrate in a globalized world. Some also consider American immigration as beneficial to supporting local cultural events sinc e American immigrants tend to be retired with more time to enjoy such events. Hence, their impact has been positive in this sense. Other respondents believe d that American immigration and all the attention Cuenca has received recently has inspired locals to maintain and improve their infrastructure. Many parks and sidewalks have been improved in order to stimulate residents to exercise and engage in leisure activities. While these changes cannot be solely attributed to the American presence, several respo ndents seemed to do so. Finally, American immigrants contribute to the local economy and society through their engagement in volunteer activities. The engagement of American immigrants is a way for them to integrate into the local community while doing som ething beneficial to others. This is certainly a positive impact of American immigration.
94 CHAPTER 6 CONCLUSION S The e migration of American citizens to other countries in search of a better quality of life is a fairly new phenomenon worthy of exploration. This is not to say that Americans did not emigrate to other countries in the past, since they could be found in many other parts of the world, having migrated because of work, to follow loved ones or in search of adventure What distinguish es the current wave of migr ation seems to be its magnitude and perhaps that a not inconsequential share of the recent American emigrants are being pushed out of the US as economic refugees and/or are motivated to leave because of disenchantment with the U S It is important to note that the emigration of Americans to Cuenca, Ecuador does not seem to fit the typical explanations of conventional migration theories. These immigrants are usually seniors who want to enjoy their lives, which is contrary to the typ not migrating in search of job opportunities and did not rely on friends and family to provide a migration network which would ease their transition in their new adopted c ity. Perhaps, it is appropriate to classify this migration pattern as a subset of conventional migration theory in which migrants are searching for a better quality of life, but not necessarily because they lack opportunities in their native country, but b ecause they are seeking a more pleasurable life for a lower cost. The aim of my research was to understand the characteristics of American immigrants to Cuenca and their impact upon the city. Drawing upon semi structured intervie ws with a snow ball sample of 30 respondents and 6 key informants, the goal was to paint a general picture of the American community.
95 Some of my research findings are similar to those of other studies of American immigrants in other Latin American cities. However, the characterist ics of American immigrants to Cuenca and their motivations for migration also differ in some important ways from those who migrated to Mexico or Panama in previous decades. As other researchers have f ound elsewhere in Latin America the American immigrant s in Cuenca are mostly seniors who are retired or close to retirement age (Croucher, 2009; McWatters, 2009; Morales & Castro, 2008). In general, they arrive with little Spanish fluency, if any. They are mostly Caucasians with some university education and at least a high school degree The bulk of respondents had been living in the city for three years or less and did not own the homes they lived in. E conomic factors are the main motivation behind the immigration of Americans to Cuenca as found in previou s studies of American immigration in Latin America (Croucher, 2009; McWatters, 2009; Morales & Castro, 2008). The main difference with previous studies may be the not an insignificant share of Americans in my sample who migrated because they were negativel y affected by the financial crisis of 2007. Some lost their jobs at an advanced age and could not find another one as the recession dragged on. Others found that they could not live in the United States on only their retirement pension and decided to move to wherever their reduced incomes would allow them a decent quality of life. respondents to describe those who had no other choice than to emigrate from the US. I also found that many American immigrants i n Cuenca had become disenchanted with the U nited S tates for both economic and political reasons, serving as another motivation to move abroad. Complaints about economic problems such as
96 unemployment and the bailout of Wall Street were common. Some immigra nts strongly criticized the policies of former President Bush and current President Obama. Almost from the United States. This is a n important finding as it shows that many Americans emigrated not just to get more bang for their buck, but because they were unsatisfied with their lives in the United States. It was surprising to discover that many Americans a re extremely pessimistic about the future of their native country and happy to leave it behind. Althoug h most American immigrants are retired or close to retirement age and did not migrate to work some migrated to open their own business. They considered it difficult to open a business in the United States and believed that Cuenca provided them with a good opportunity. Most of them had businesses in the food service industry and had a significant expatriate clientele. All of the respondents who were business owners with the exception of two had previously traveled or lived in Ecuador and opened a business in Cuenca to take advantage of the lower startup cost s. They were also attracted by the influx of Americans and other expatriates to the city While the media has also influenced traditional migration patterns, it appears to have adopted a new role in th e case of American immigration to Cuenca. It is interesting that many American immigrants in Cuenca relied on new media outlets, such as websites and blogs, to inform themselves about the city and the benefits of moving there. Some respondents contacted Am ericans who were already living in Cuenca seems that these media outlets substituted the traditional role of migration networks in
97 providing potential migrants with the socia l capital needed to make the decision to emigrate. American immigrants in Cuenca seem to live a transnational life, instead of assimilating to the local culture. Whether because most of them have little Spanish fluency or because they tend to be retired s eniors, American immigrants appear content with their transnational life and few will likely assimilate to the local culture. Most of them maintain their financial investments in the US and retain their social connections from their native country. Althoug h they enjoy the local culture, Americans preserve their traditional culture and ideals. It is also important to recognize that many of these immigrants considered other locales to live before m igrating to Cuenca. Thus, some of them may leave Cuenca once t American immigrants in Cuenca is not one of assimilation, but rather of transnationalism. While many rejected the idea of living a cultural enclave, most American immigrants appear to live in one. Respon dents claimed to enjoy local cultural activities and praised the city they live in, but their friendships tend to be with other Americans and their social activities usually revolved around events geared towards their community. Most respondents were fully attended these establishments frequently. Those who had some Spanish fluency mentioned that they had some Cuencano friends or at least tried to reach out to them. However, some of them claimed that locals were too family oriented, which made personal relationships between Americans and Cuencanos more difficult. Whether it is intended or not, Americans in Cuenca appear to live in a cultural enclave.
98 The second part of my research was to measure the impact thus far of American immigration on the city. This is a somewhat challenging task since American immigration is still a recent phenomenon and the size of the American community is still relatively small. In addition, many of the impacts that are often attribute d to American immigration, such as an increase in the price of real estate and of the general cost of living, may be due largely to the impact of international remittances and to the large number of Ecuadorian return migrants from the United States and Spa in. Nonetheless, it was important to my project to evaluate the potentially positive and negative impacts of American immigration on the city of Cuenca. Overall, the impact of American immigration on real estate prices and macroeconomic variables seem s to be small. Contrary to the belief of many people in Cuenca, the overwhelming majority of American immigrants rent their homes, instead of purchasing one. While there surely has been some impact on prices its magnitude cannot be as significant as some Cuenc anos claim. The city has seen an influx in recent years of not only American immigrants, but also of returning Ecuadorians from abroad. Thus, it appears that a combination of factors is responsible for the increase i n real estate prices and the rising cost of living If American immigration continues, it is possible that the impact of immigrants may become more substantial and present serious challenges in terms of housing and overall price affordability. Many Cuencanos believe that Americans contribute to an increased cost of living by not bargaining and by paying whatever price is as ked. Some Cuencanos also accuse inability to bargain and the penchant to over tip increased th e prices of products and
99 services in the city. It is unclear if these actions alone have contributed to the reported increase in prices in Cuenca. Americans do not appear to have made many investments in Cuenca T he exceptions are those who have purchased their home and/or invested some of their money in certificate of deposits (CD) or savings accounts. Although the impact of these investments on the local economy is likely small, American immigration contributes indirectly to the increase in credit availab ility in the city Financial institutions can use the additional funds to lend money to individuals and local businesses which in turn, will benefit the overall economy. It may be worthwhile for the Ecuadorian government to provide incentives to the Amer ican community to invest more in Cuenca. An important percentage of my sample opened a business in Cuenca and others may be willing to do so as well. However, some may be hesitant to open a business because of the difficulty of navigating the local bureauc racy and/or a lack of Spanish fluency The government, through the Cuenca Chamber of Commerce or other organizations could set up information sessions of how to open a business in the city and offer free legal consultation to assist in the process. Americ an investments in businesses probably will have a greater effect on job creation than simply putting money in a CD for a year. By opening businesses, American s will hire Cuencanos, buy products and services from local providers, and pay business taxes. Hen ce the local government should consider the possibility of reaching out to those American immigrants who may be willing to open businesses in Cuenca. Turning to social and cultural factors, t he case s of ugly Americans are causing discomfort in the Ameri can community as wells as among locals According to
100 respondents, most of the c ases involve Americans being rude, loud, and/or culturally insensitive. The combination of a new culture and little Spanish fluency, if any, seems to frustrate some A merican imm igrants and lead them to misbehave. There is some worry that these episodes will affect the generally cordial relationship between Cuencanos and expatriates. It was interesting to find that the Ministry of Foreign Relations ( MRE ) is attentive to the cases of ugly Americans and has created a committee composed of Americans and Cuencanos to develop new ideas to circumvent such incidences The most clear ly positive impact of American immigration to Cuenca is the engagement of some Americans in volunteer activi ties. It constitutes a way for Cuencanos and Americans to work together to improve the city they live in. Some Ecuadorian key informants also consider that American immigration is beneficial in supporting and sustaining local cultural activities. One of t he main contributions of this thesis has been to provide a description of the American community in Cuenca based on a sample of respondents willing to participate in semi structured interviews. A limitation of the thesis is that I was unable to draw a repr esentative sample of respondents, given the lack of a census of American immigrants residing in Cuenca. Therefore, t he results constitute a snapshot of the American community that may or may not accurately represent the community as a whole. My findings, h owever, regarding the main characteristics of my sample conform to my prior expectations, the reports of key informants, and are generally similar, as noted earlier, to findings in other American retirement destinations in Latin America. This study was onl y focused on Cuenca and it may also be worthwhile to study American immigration to other Ecuadorian towns such as Otavalo and Vilcabamba.
101 While the number of Americans residing in the various locales of destination in Ecuador is unknown their concentratio ns in these two places may be substantial enough to merit future research. The American immigrants in these cities may have different characteristics and motivations to migrate. These cities have smaller populations and are less developed, so the impact of American immigration may be greater depending on their relative numbers. I focused my research on American immigrants, but there are immigrants from many other developed countries in Ecuador and Cuenca, in particular. If the number of Canadians or Germans increases substantially, it may be valuable to study these nationalities individually for comparison purposes. There are also a significant number of Colombians and Peruvians residing in Cuenca and their impact on the city may be different as they usually migrate looking for work. It could be worthwhile to study their impact on the city and specifically, in the labor market as well. The case of American immigration to Cuenca is only a small part of the overall story of international migration. However, i t represents part of a new movement where citizens from traditionally migrant receiving countries emigrate to traditionally sending countries. It is a fascinating development that needs more investigation to determine its magnitude and if this migration pa ttern will continue once the economic situation in developed countries improves. As time passes and additional studies are conducted, we should know more about how this migration pattern impacts receiving communities. Most importantly, more research will a llow receiving communities to better understand negative consequences and maximizing the positive impacts.
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106 BIOGRAPHICAL SKETCH Thiago graduated in 2014 with a Master of Arts degree in Latin American studies with a specialization in Development. As part of his graduate assistantship with the Center for Latin American Studies, he worked in assisted in preparing the Latin American Business Environment report. He also has a Bachelor of Science degree with a double major in i nternational business and trade and economics.
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