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Venezuela insists on "decent" ties with US
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Remittances to Latin America,
Caribbean Topped $45 Billion in
2004
Remittances to Latin America, Caribbean Topped
$45 Billion in 2004
The Inter-American Development Bank (BID)
has reported that money sent by migrant workers to Latin America and the
Caribbean in the course of 2004 rose nearly 20 percent from 2003.
Latin American and Caribbean workers living abroad sent a record $45.8
billion to their homelands in 2004, up from $38 billion the previous
year, the Inter-American Development Bank´s Multilateral Investment Fund
(MIF) informed.
Remittances are typically made by migrant workers in industrialized
nations who send $100 to $300 at a time to their families. These flows
are a major source of capital for several countries in Latin America and
the Caribbean.
In 2004, as in the previous two years, remittances exceeded the combined
totals of overseas aid and foreign direct investment received by the
region.
About three-quarters of the total volume of remittances to Latin America
and the Caribbean came from the United States. Europe was the second
largest source, while Japan continued to be a major origin of flows to
Brazil and Peru, as Canada was in the cases of Jamaica and Haiti.
Mexico remained the top destination, receiving about $16.6 billion last
year. Brazil was second with $5.6 billion, followed by Colombia with
$3.9 billion. The impact of remittances, however, is greater in the
region´s smaller economies.
Haiti, the poorest country in the Americas, received just over $1
billion from its expatriates more than one quarter of its gross domestic
product.
According to the MIF´s research, there are some 25 million Latin
American and Caribbean-born adults living abroad. About two-thirds of
them send money to their families on a regular basis. On a global scale,
some 175 million people have left their homelands for economic reasons.
While remittances reflect the growing integration of labor markets, MIF
Manager Donald F. Terry noted that this phenomenon is still based on a
fundamentally human factor: migrants´ commitment to their families.
These are transnational families, living and contributing in two
countries, two economies and two cultures at the same time, he said.
The world has adapted to shifts in trade and investments, adopting new
political and economic rules to match new realities. The same needs to
be done for migrant workers who have become a vital part of the world´s
labor markets, Terry added.
The MIF started working in 2000 on the issue of remittances to assess
their economic and social impact in Latin America and the Caribbean. Its
research revealed the magnitude of these flows as well as the high
transaction costs most migrants were paying to send money to their
homelands.
MIF projects have encouraged competition in a market traditionally
dominated by money transfer companies, prompting banks, credit unions,
microfinance institutions and entrepreneurial innovators to become
interested in remittances.
Over the past five years, in the case of Latin America and the
Caribbean, remittance costs have dropped by half to about 7 percent.
Working with various partners, the MIF is currently financing various
programs to link remittances with microfinance, seeking to expand access
to formal financial services for millions of migrant workers and their
families.
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