Caribbean to receive over US$400 billion in remittances
WASHINGTON, DC, USA — A new World Bank report says remittance flows to the Caribbean and other developing countries are expected to exceed earlier estimates and total US$406 billion this year, an increase of 6.5 per cent over the previous year.
The report said remittances to developing countries are projected to grow by 7.9 per cent in 2013, 10.1 per cent in 2014 and 10.7 per cent in 2015 to reach US$534 billion in 2015.
Worldwide remittances, including those to high-income countries, are expected to total US$534 billion in 2012, and projected to grow to US$685 billion in 2015, according to the latest issue of the Bank’s Migration and Development Brief.
“Although migrant workers are, to a large extent, adversely affected by the slow growth in the global economy, remittance volumes have remained remarkably resilient, providing a vital lifeline to not only poor families but a steady and reliable source of foreign currency in many poor remittance-recipient countries,” said Hans Timmer, director of the World Bank’s Development Prospects Group.
He said remittances to Latin America and the Caribbean are supported by a recovering economy and an improving labour market in the United States but moderated by a weak European economy.
The region will see a modest growth of 2.9 per cent in 2012, totalling an estimated US$64 billion, Timmer said.
“Migrant workers are displaying tremendous resilience in the face of the continuing economic crisis in advanced countries,” said Dilip Ratha, manager of the bank’s Migration and Remittances Unit and lead author of the Migration and Development Brief.
“Their agility in finding alternate employment and cutting down on personal expenses has prevented large scale return to their home countries,” he added.
Going forward, the World Bank expects continued growth in remittance flows to all regions of the world, “although persistent unemployment in Europe and hardening attitudes towards migrant workers in some places present serious downside risks.”
The report stated that another obstacle to growth of remittance flows is the high cost of sending money, which averaged 7.5 percent in the third quarter of 2012 for the top 20 bilateral remittance corridors and 9 percent for all countries for which cost data are available.
The Migration and Development Brief also notes that the promise of mobile remittances has yet to be fulfilled, despite the skyrocketing use of mobile telephones throughout the developing world.
It says mobile remittances fall in the regulatory void between financial and telecom regulations, with many central banks prohibiting non-bank entities to conduct financial services.
“Central banks and telecommunication authorities, thus, need to come together to craft rules relating to mobile remittances,” the report urges.
The Brief also discusses the implementation of the new remittance regulations in the United States and Europe, concluding that these regulations are likely to lower remittance costs in the long run by increasing competition and improving consumer protection.
“The global community has made progress in three out of four areas of the global remittances agenda — data, remittance costs, and leveraging remittances for capital market access for countries,” Ratha said.