There is silence on the report on remittances
Consumer Concerns
By Eileen Cox
Stabroek News
November 17, 2002
The Savannah Suite of the Le Meridien Pegasus Hotel was packed on Thursday November 7 when Dr. Manuel Orozco, an expert with worldwide experience in measuring and assessing the impact from remittances, presented his report on his findings in Guyana.
The meeting, under the auspices of the Unites States Agency for International Development, was arranged for public presentation and discussion of Dr. Orozco's findings. Ministers of the Government, public and private officials were in the audience listening to the lengthy report made by Dr. Orozco.
When the presentation was completed, it was natural to expect a heated discussion on the findings and the recommendation being made that the remittances could be banked and used for development purposes.
Unfortunately, only one member of the audience, Dr. Ganga of the Bank of Guyana, made a comment, and this was not recorded in the press reports in the daily newspapers. It might therefore seem to the non-attending Guyanese, that the findings were accepted in toto by those present at the Pegasus.
In order to remove any misconception, I approached Dr. Ganga and he was kind enough to give me a resume of the points that were raised by him after Dr. Orozco's presentation. They were as follows.
Dr Manuel Orozco, using US census data with approximately 300,000 Guyanese households residing in the USA and assuming that each remit to Guyana US$1000 approximately arrived at total remittances amounting to US$300M annually. This is far greater than the US$91.7M estimated by Bank of Guyana (BOG) in the form of US$55M in workers' remittances and UD$37M in migrant and unrequited transfers.
Dr Ganga argued that Orozco's figure was not true and was over estimated because he took a higher level of remittances rather than that of low-income countries such as Guatemala and Honduras with remittance of US$150M. Using this level of remittance then the estimated amount for Guyana is approximately US$50M in cash which together with the other transfer will amount to BOG estimates of remittances for the year 2001 of US$91.7M and not US$300M.
Further, Dr Orozco's estimate of US$300M means that US$200M is floating around in Guyana, which is false because for a small country such as Guyana that sum would be detected very easily. In addition, over 95 per cent of flows go through the formal financial institutions since financial liberalisation in the early '90s.
Dr. Ganga further argued that while there are remittance inflows, there are also outflows (which Dr Orozco failed to consider) in the form of workers remittances and other migrant transfers especially from those who are substitutes for Guyanese migrant labour. The net flows in the end amounted to approximately US$30M with contributions of one-quarter of Dr Orozco's estimate to GDP.
In conclusion Dr Ganga pointed out that remittances cannot be seen as a substitute for Overseas Development Assistance nor Foreign Direct Investment (FDI). This is because each has its own dynamics for social and economic development. He further stated that remittances have been very important in the development of Asian countries such as Pakistan. In this regard, remittances should be harnessed to make them more efficient and effective through better institutional mechanisms.
For clarity and assistance to the non-professionals in our society let me quote from the report in the Stabroek News of Friday November 8:
"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."
One would have expected an avalanche of letters in the press challenging the recommendation that remittances could be put to use for development. However, more of that anon. Other studies could be undertaken, for example, the gain in countries who accept skilled immigrants without compensation to the mother country; the cost to the homeland when skilled workers emigrate and untrained persons are sky-rocketed to their positions.
The silence that followed Dr Ganga's presentation is evidence of the great loss to our society. Guyanese, on the whole, are now too timid for words.
