Report says remittances from US at least US$90M per annum
Stabroek News
November 8, 2002
Remittances to Guyana have doubled since 1997 to reach over $US90M per annum or 13% of GDP according to a draft report released by the United States Agency for International Development (USAID).
The draft titled `Remitting Back Home and Supporting the Homeland: The Guyanese Community in the US' was presented by Dr Manuel Orozco, an immigration specialist and the Project Director for Central America at the Inter-American Dialogue, at a USAID-sponsored seminar at Le Meridien Pegasus Hotel yesterday.
In a welcome address, US Ambassador to Guyana Ronald Godard said that the amount of private capital transfers globally is four times the amount of official development assistance in the world. "We, as developmentalists, could be looking at ways in which we could leverage and facilitate the flow of those funds for development purposes", he said.
The subject of remittance and money transfers, Godard said, was relevant to Guyana's development needs as the amount of remittances from its expatriate community "are simply enormous."
He would like to see if there are ways the remittances can be better mobilised for development purposes in Guyana. Noting that remittances play an important role in the social safety net here, he said that there may be ways that family businesses can be built up from remittances.
In his draft report on remittances to Guyana, Dr Orozco noted that in 1997, remittances amounted to US$57M according to Bank of Guyana statistics. It has increased significantly to US$96.4M in 2000 and US$91.7M last year.
Central Bank figures show that workers remittances (such as personal deposits) accounted for nearly US$55M in 2001, up from US$18M in 1997. They also show an additional US$37M in migrant and unrequited transfers. Workers remittances would include transfers made by workers who stay in foreign economies for at least a year; migrant transfers would be transfers made to their accounts abroad and unrequited transfers are non-financial transfers such as items sent in barrels and boxes.
Although no reliable data exists about the number of Guyanese living outside Guyana, the report said the number may be as high as the total population in the country of over 700,000. The total number of Guyanese living in the United States was reported in a recent census as 209,000 but this is considered much lower than a conservative estimate of 300,000.
Given the large overseas Guyanese population, the draft said that the remittance figures seem relatively low. Minimum annual amounts sent per individual to Guyana would work out to US$1,000 compared to the average amount sent by an immigrant to Latin American countries which averages US$270 a month.
Information provided by the banks and money transfer businesses suggest that the total figure is far higher than that officially reported, especially given the relationship that Guyanese immigrants maintain with their homeland.
In terms of licensed money transfer services, the report noted that Western Union/Grace Kennedy possibly transfers two thirds of the flows. Banks also operate as money transmitters mostly from deposits or as cheque cashiers from immigrants who send cheques to relatives. Scotia Bank receives a significant flow from Canadian deposits. Western Union and Laparkan state that 10% of their transfers come from Canada.
According to smaller money transfer businesses most remittances stay in Georgetown. However, for Western Union 50% of their transactions are in the Georgetown area and outlying villages.
Laparkan, a competitor to Western Union, also transfers its remittances mainly in Georgetown.
The draft noted, too, that the current costs of transferring money are extremely high in relation to charges in other Caribbean and Latin American countries.
The average cost of transferring US$250 to the region averages US$26 and Western Union, the main remittance operator, which controls nearly 70% of the market, has a total charge of US$31.68. These charges are the highest for Latin America and the Caribbean after Cuba. This, the report puts down to a lack of competition.
In his conclusion and recommendations, Dr Orozco said that the Guyanese community that sends back money home offers important development and growth opportunities but the high transaction costs in transferring remittances and the country's limited international connectivity are the two main challenges.
Dr Orozco said that central to taking advantage of the opportunities offered by remittances is the ability of the government, the private sector, and development communities to enable an efficient money transfer system that can facilitate low cost remittance transfers.
He said they can also help to offer other choices in economic exchanges between Guyana and its émigré community in North America. This includes addressing electronic deposit fund capability via international interchange venues like Cirrus, Maestro and others. Another step involves the forging of alliances between banks in the United States and Canada and Guyanese banks. This scheme, he said, would level the playing field in the uncompetitive market. Money transfer companies could also establish strategic alliances with banks that support the deposit of money received into a recipient's bank account.
The use of banking institutions, he noted offers significant benefits to senders
and recipients. Having an account and a debit card at the bank guarantees the recipient the opportunity to access his or her money on an as-needed basis while safely keeping a balance. In Guyana as in most countries, the recipients are poor, unbanked, and unable to save and most use remittances to make ends meet.
For those able to save, money could be deposited into a regular chequing account and accessed by cheque, debit or store value card.
Dr Orozco also recommended the need to establish tracking mechanisms and methodologies to learn more about the flows as he feels that the stated annual flow of US$1,000 transferred is much lower than the actual average. Using Guyana's central bank figures, he said that assuming that 100,000 to 120,000 households in the US send money, the average sent per year comes to a low figure between US$458 and US$550. For an immigrant population size such as that in the US, the likely aggregate sent per year, is more like US$300M.
Giving a background to the Guyanese immigrant population, Dr Orozco in the draft report said that a 1992 report showed that at least 20,000 people were leaving Guyana annually for the United States, the United Kingdom and Canada. The report quoted a senior Guyanese immigration official as reporting that the number today is at least 50,000.
Interviews with Guyanese community leaders in the US and Canada reveal that there are about 500,000 to 1 million Guyanese living abroad, the report said. In addition, the US Census counted somewhere between 200,000 and 220,000 Guyanese living in the US alone, with the majority, some 131,909 living in New York. New Jersey accounted for 18,610; Florida, 13,738; Georgia 8,763; Maryland, 7,579; Virginia 4,586; California, 3,534; and other states, 20,814.
The report also quoted the United Nations Development Programme (UNDP) as saying that Guyana's population exhibits one of the highest negative net migration rates. The current estimate for Guyana is in excess of six persons in 1,000 leaving the country every year. It is estimated that by 2010 the number will increase to 97 to 1,000. This migration has resulted in transnational networks being established between Guyana and the diaspora.
Quoting also the Land of Six Peoples, 2002, about 183 organisations of the Guyanese diaspora exist in the United States and Canada. The organisations perform a range of activities but concentrate mainly on charitable work.
The majority of the community leaders interviewed stressed that their members maintain close ties with relatives and friends but it was relatively expensive to travel to or call Guyana. The limited numbers of flights, 23, in August from the US to Guyana, and the cost, an average of US$700 from New York or Miami, were limiting factors in increasing the contacts between the diaspora and Guyana.
Telephone calls like airfares are significantly expensive and Guyana ranks as the most expensive from among nine Latin American and Caribbean country. Per minute, a Global Cell (GC) call from the US is 90 cents; AT&T, 88 cents; MCI, 87 cents. On the other hand the lowest rates being to the Dominican Republic are GC, 20 cents; AT&T, 31 cents; and MCI, 29 cents. Rates to Colombia are GC, 26; AT&T, 31, and MCI, 29; to Trinidad and Tobago, the rates are; GC, 30 cents; AT&T, 37 cents; and MCI, 35 cents; and Haiti with the second highest rates in the region, are GC, 56 cents; AT&T, 51 cents; and MCI, 49 cents. (Miranda La Rose)
