Guyana leads the Latin America and Caribbean region in remittances receipts as a percentage of GDP with US$424M constituting 43 per cent of GDP being received in 2007, says a report by the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB).
The report, entitled ‘Remittances in 2007’, said that for 2007, remittances to Latin America and the Caribbean (LAC) reached US$66 billion, an increase of over 7 per cent over 2006. According to the IDB, Guyana received US$466M in 2006.
The report said that during a year which saw economic growth across the region, migrant workers sent home one-third more than net Foreign Direct Investment (FDI) and more than ten times Official Development Assis-tance (ODA), “making 2007 the fifth year in a row that remittance inflows topped the combined sum of FDI and ODA to the region.”
“This is even more impressive when keeping in mind that actual remittances are about 10 per cent higher due to the difficulties of estimating the value of remittances carried across borders by hand,” the report said.
It said that at the national level, remittances represent a significant contribution to the region’s economies, comprising 12% of GDP or more in seven countries: Guyana 43 per cent, Haiti 35 per cent, Honduras 25 per cent, Jamaica 18 per cent, El Salva-dor 18 per cent, Nicaragua 17 per cent, and Guatemala 12 per cent.
The report said in the short term, remittances to the region will be carefully scrutinized to determine whether the slowdown is a temporary phenomenon, or the beginning of a trend which would affect the region more severely.
“The needs of family members back home will not diminish, however, suggesting that migrant workers will compensate by working longer hours and more jobs, shifting to different sectors, moving to other states, or even to different countries,” the report said. It stated too that if the data from Mexico represents the first signs of a regional slowdown, “this will have a serious impact on the lives of millions of families throughout the region as well as on the communities where they live.”
The report said that the depreciation of the dollar has not yet had a major effect on remittances to LAC, with the notable exception of Brazil. “The rise in the value of the euro, on the other hand, has resulted in a higher percentage of the region’s remittances coming from Europe (principally Spain, Italy, Portugal and the UK), making Europe increasingly attractive for Latin American and Caribbean workers,” it said.
The report said that in the long term, remittances remain both a consequence of vast global imbalances in development and an increasing demographic necessity for migration receiving countries. “Simply put, the need of young people in most developing countries to find jobs is matched by the need in most developed countries for young workers,” it said.
