KINGSTON – World Bank Executive Director for Canada, Ireland and the Caribbean, Marie Lucie-Morin, says remittance flows to developing countries are likely to increase to US$374 billion by 2012.
She says this is consequent on the resilience of the earnings of persons in the countries of remittances origin to the global financial crisis.
Mrs. Lucie-Morin was addressing the opening of a Caribbean Remittance Forum at the Mona Visitor’s Lodge and Conference Centre, UWI, on Thursday March 24.
She said recent World Bank statistics showed that officially recorded flows to developing countries totalled an estimated $325 billion in 2010, and indications are that the sum will increase this year.
“Interestingly, these remittance flows…have proven quite resilient (to) the…global financial crises, compared, for instance, to foreign direct investments (FDI) flows, which may suggest some unique advantages to these financial transfers,” she contended.
Pointing to benefits associated with remittances, the Executive Director said World Bank studies suggest that international remittance receipts have lowered poverty in Uganda by 11 per cent points, in Bangladesh by six per cent and in Ghana by five per cent.
“In poor households, they have financed the purchase of basic consumption goods, housing and children’s education, and health care,” she noted.
On a macro level, Mrs. Lucie-Morin said remittances help countries to finance imports and meet external debt servicing obligations. Additionally, in some countries, banks have secured overseas financing using future remittances’ as collateral and, in countries affected by political strife, remittances are often critical economic lifelines to the poor.
“The World Bank estimates that in some areas of Somalia, for example, they accounted for up to 40 per cent of the total gross domestic product (GDP), during the late 1990s,” she said.
Mrs. Lucie-Morin pointed out that the Caribbean benefits significantly from remittances, resulting from intense migration patterns. She noted that several regional economies, particularly those in the “lower income group”, are heavily reliant on remittance flows as a source of income, adding that these represent more 20 per cent of the GDP in some territories.
She said figures from the 2006 Canadian Census showed that some 580,000 residents were of Caribbean descent and that Caribbean immigrants account for approximately three per cent of the number of foreign workers in Canada, with Jamaicans and Haitians being the top two groups. She said that this has had a telling effect on remittance flows to the region.
“Over the past 15 years, the combined flow of workers’ remittances and migrants’ transfers reaching the Caribbean, has seen an almost 15 to 17 per cent average annual growth rate. More recently, remittances have been proven to be particularly responsive to crises in migrants’ home countries, such as was the case in the recent tragic earthquake in Haiti,” she stated.
She said remittances can also be used as development instruments, citing Diaspora bonds as an example and, in some regions, have been used as collateral for international financing.
The two-day forum, jointly organized by the UWI, World Bank, and the Canadian Government, aims to share knowledge and generate policy dialogue among relevant remittance stakeholders, to enhance the efficiency and integrity of the migration and remittance transfer process, through effective regulatory and supervisory systems in the Caribbean.
Over 20 representatives from some 13 Caribbean, and North and Central American countries are attending the forum being held under the theme: “Enhancing the Efficiency and Integrity of Remittance Transfers through Effective Regulatory and Supervisory Systems in the Caribbean. The forum concluded on Friday (March 25).
