Sat | Mar 24, 2018

​Remittances to Caribbean islands reached record high in 2016 – World Bank

Published:Thursday | January 25, 2018 | 12:18 PM
A money transfer sign hangs outside a shop in downtown Kingston as persons go about their business. - File Photo

While remittance flows decreased worldwide for a second consecutive year in 2016 – remittances to Latin America and the Caribbean, however, rose to a record high.

This is based on recently released data from the World Bank.

In analysing the figures, the Pew Research Center, a nonpartisan American think tank, based in Washington, reported that globally, migrants sent an estimated US$574 billion to their home countries in 2016, a 1.4 per cent drop from 2015.

But, in Latin America and the Caribbean – together making up a region where many people say economic conditions are bad – remittances rose to US$74.3 billion, a 7.4 per cent increase from the previous year (US$69.2 billion), said the Pew Research Center.

It said Europe was the only other region in the world to see an increase, “and it was a much smaller one (up 0.9 per cent).”

Remittances are funds or other assets sent by migrants via formal channels, such as banks.

The think tank said the total amount of money transferred is likely significantly larger than what is reported, “because these estimates do not include the transfer of other assets, such as gifts, or informal monetary transfers.”

The World Bank reports only remittances sent via formal channels, the Pew Research Center said.

It said the increase in remittances to the region is primarily due to general improved labour market conditions  in the US, which has helped boost  migrants’ capacity to send money home.

This improvement was especially evident in sectors such as information, construction and manufacturing, industries in which many Latin American immigrants work.

Among Latin American and Caribbean countries, Mexico has long received the highest amount of remittances, the centre said.

In 2016, it said US$28.6 billion in remittances flowed to Mexico (up 9.3 per cent from the previous year) – a total that accounted for over a third of remittances to all of Latin America and the Caribbean.

After Mexico, Guatemala (US$7.5 billion), the Dominican Republic (US$5.5 billion) and Colombia (US$4.9 billion) received the highest amounts of remittances in the Latin America and Caribbean region in 2016, the Pew Research Center said.

As a share of total economic output (measured in gross domestic product), remittances were equivalent to 29.4 per cent of Haiti’s 2016 gross domestic product (GDP); while for the Caribbean as a whole, remittances were equal to 8 per cent of GDP – a far higher share than for Central and South America (3.6 per cent and 0.5 per cent, respectively), the Pew Research Center said.

Despite the recent overall decline in remittances, it said the amount sent by migrants globally to their home countries in 2016 remains more than double that of 2005, when US$280 billion in remittances were sent.

Global remittances are expected to increase in coming years, because of anticipated growth in the US and European economies (where nearly half of the world’s migrants live), and the appreciation of major currencies like the Russian ruble.