Remittances estimated at 16% of Guyana’s GDP
Stabroek News
March 22, 2003
Estimated remittances to Guyana amounted to 16.6% of the country’s Gross Domestic Product in 2002, part of total transfers sent to Latin America and the Caribbean by immigrants in industrialised countries of US$32B, an increase of 17.6 per cent over the previous year.
An Inter-American Development Bank’s Multi-lateral Investment Fund MIF quoted MIF Manager Donald F. Terry as saying that the volume of remittances had grown dramatically making Latin America and the Caribbean the number one destination for remittances worldwide.
The Caribbean countries receive US$5.45B, with Mexico receiving the largest share, US$10.5B.
Terry said that the MIF was getting a more accurate picture of these capital flows because reporting and tracking was improving.
Last year Latin America and the Caribbean received about 31 per cent of the US$103B sent by immigrants from developing countries around the world to their home countries.
Nearly 78 per cent of the remittances to this region came from the United States. Japan, Spain and Canada are other major sources of remittance flows for Latin American and Caribbean countries.
Central American countries received a total of $5.5B, Caribbean countries received $5.45B and Andean nations received about $5.4B.
In six countries remittances accounted for more than 10 per cent of their gross domestic product: Nicaragua (29.4 percent), Haiti (24.2 per cent), Guyana (16.6 per cent), El Salvador (15.1 per cent), Jamaica (12.2 per cent) and Honduras (11.5 per cent).
According to MIF estimates, if these flows continued to grow at a moderate rate of 7 per cent a year, Latin America and the Caribbean could receive more than $400 billion in remittances during this decade.
By volume, remittances to this region already surpass the amounts received from official development assistance and almost match the foreign direct investment received in 2002.
According to MIF estimates, the total costs associated with remittances to Latin America and the Caribbean rose to around $4B. These costs continue to be the highest in the world by a significant margin, Terry said.
“Costs are higher to send money to Latin America and the Caribbean because banks are less involved in these transactions than they are in other regions of the world,” Terry said. A MIF-sponsored study compared costs of wiring money from industrialised nations to various developing countries and found that Latin America is the most expensive destination.
The MIF also sponsored another study on remittance flows from Spain and found that Latin American workers were sending about $1B a year back to their countries from that European nation. Competition from major Spanish financial institutions has forced traditional money transfer companies to cut their fees dramatically, Terry said.
A third study commissioned by the MIF on the impact of recent US regulations against money-laundering and funding of terrorist groups found that the new rules should not prevent financial institutions from offering more services to Latin American immigrants, including those bearing foreign-issued identification documents such as some issued by Mexican consulates.
The MIF promotes private sector development in Latin America and the Caribbean through grants and investments.
It is an autonomous fund managed by the IDB. It is scheduled to discuss these reports and their conclusions.
