Remittances To Caribbean Surpass $5 Billion Mark

Hardbeatnews, WASHINGTON, D.C., Fri. Mar. 31, 2006: Caribbean nationals overseas, from only six regional countries, sent back almost US$6 billion in remittances to their homelands last year, almost a billion more than 2004.

That’s according to the latest report on remittances, released by the Inter-American Development Bank’s Multilateral Investment Fund yesterday. The total remittances transferred to the Dominican Republic, Haiti, Jamaica, Trinidad, Guyana and Suriname was put at approximately US$5.8 billion. Cuba was not included in this year’s total while the smaller Caribbean islands remain unaccounted for.

The new estimates were presented at the seminar, ‘A Global Revolution in Banking: Remittances and Microfinance’, held ahead of the annual meeting of the Board of Governors of the IDB, which will take place from April 3-5.

An estimated US$2.6 billion was sent back to the Dominican Republic, the most for any Caribbean country, while Jamaica followed in second spot, but led for the English-speaking Caribbean, with a whopping US$1.6 billion. That’s compared to US$2.2 and US$1.4 billion, for each country for 2004. Haiti placed third overall with US$1,077 billion, a rise from its US$977 million in 2004. But Guyana, Trinidad and Suriname have yet to reach the billion-dollar mark, according to the bank.

Bank estimates put the total remittances sent back to Guyana last year at US$270 million. But it marked a significant rise of about US$133 million from 2004. Trinidad came in at fifth overall for the region with an estimated US$97 million, some US$9 million over its 2004 estimates. And total remittances to Suriname, added this year to the overall estimates for the first time, put it at US$55 million.

In total, Latin American and Caribbean workers combined sent a record $53.6 billion in remittances to their homelands during 2005, up 17 percent from the previous year, IDB officials said. Some 25 million Latin American and Caribbean-born adults reside outside their countries of origin, the IDB says, and about two-thirds of them send money home on a regular basis, usually wiring between $100 and $300 at a time.

Mexico continued to be the leading recipient of remittances in Latin America, as its expatriates sent more than $20 billion home last year, around 20 percent more than in 2004. Brazilians living in Japan, Europe and the United States sent some $6.4 billion to their country in 2005, around 14 percent more than in the previous year.

Countries participating in the Central America Free Trade Agreement with the United States received more than $11 billion in remittances last year, while the Andean countries seeking a similar pact with Washington received more than $9 billion.

Average transaction costs of sending money to Latin America and the Caribbean have dropped by half since the MIF started studying these flows in the year 2000, largely due to stronger competition and the adoption of new technologies among service providers.

IDB President Luis Alberto Moreno reminded conference participants that while remittances have great potential to promote investment, job creation and capital accumulation in the region, they are not a panacea.

“Given the opportunities and risks that remittances generate, as well as the expected persistence of these flows due to demographic and economic trends of host and source countries, development institutions such as the IDB and the international community as a whole have the responsibility of trying to maximize the positive aspects of migrations and contain their costs,” he stated.

The IDB and the MIF believe that one of the most effective ways to achieve such goals is to expand access to the formal financial system, particularly in Latin America, so migrants and their families may have more options available to multiply the economic impact of their money.

“If remittances contribute to building a broad-based culture of thrift, creating opportunities of growth and employment for all, they will also succeed in reducing the costs that migrations entail for countries in our region,” Moreno added. –