THE WORLD Bank, in an update on remittances released last week, said flows to developing countries are projected to hit US$406 billion this year and rise to US$534 billion in 2015.
Within Latin America and Caribbean (LAC), however, projections are for less robust flows, influenced by trends in Europe and tighter migration control.
Worldwide remittances are expected to rise by 6.5 per cent, but flows to the LAC region will likely see a more modest growth of 2.9 per cent to an estimated US$64 billion.
Transfers to Jamaica are predicted at US$2.172 million.
The net flow of migrants from the region, especially Mexico to the United States, has come to a standstill due, the World Bank posits, to tighter border controls. There are also fewer construction jobs in the United States, which is a primary remittance market.
In Europe, high unemployment rates have also impacted outward remittance flows to LAC.
world bank disappointed
Meanwhile, according to the latest issue of the World Bank's Migration and Development Brief released on November 20, the multilateral states that it is disappointed with the progress made by mobile remittance systems, which were expected to cut money transfer costs for many of the world's poor.
"Although channelling interna-tional remittances through mobile phones has the promise of expanding access and lowering costs, this service has yet to take off in a substantial way," the World Bank said.
It indicates that while the use of mobile phones has grown worldwide from 0.7 billion in 2000 to 6.0 billion in 2011 - of which 4.6 billion are being used in developing countries - as of early-2012, only 20 per cent of 130 mobile banking operators worldwide offered international remittance services.
"Major players in this market include G-Cash and Smart in the Philippines, M-PESA in Kenya and Tanzania, and Digicel in Fiji, Samoa, and Tonga. Traditional money transfer operators, such as Western Union and MoneyGram, have also partnered with some of these providers to offer international remittance services via mobile phones," said the migration brief.
Still, cross-border mobile remittances have not taken off due to regulatory and operational challenges, the bank said, citing two issues.
Anti-Money Laundering/Counter Financing of Terrorism, or AML/CFT rules, and the attendant 'know your client' requirements "exacerbate the regulatory hurdle for mobile money operators that raise cost and operational burden," said the world Bank.
Mobile remittances also fall in the "regulatory void" between financial and telecom laws, creating "regulatory uncertainty for potential market entrants".
The report further notes that many central banks do not allow non-bank entities to conduct cash-in/cash-out services.
"Mobile remittances will not take off until central banks and telecom authorities come together to craft rules that facilitate branchless banking. International remittances via mobile phones will also not take off until there is an ecosystem of domestic services built around mobile payments," the report said.
The bank in its report contends as well that remittance costs are still too high, averaging 7.5 per cent in top 20 remittance corridors. The worldwide average cost is about nine per cent.
The World Bank notes that Kenya and the Philippines are ahead of the curve in fostering an ecosystem of mobile payment services. It posits that the US Remittance Transfer Rule, to be implemented in February 2013, will increase transparency for consumers and thereby market competition.
Meanwhile, remittance flows to the developing world are expected to exceed earlier estimates and total US$406 billion this year, an increase of 6.5 per cent over the previous year, according to the new World Bank brief on global migration and remittances.
Worldwide remittances, including those to high-income countries, are expected to total US$534 billion in 2012, and is projected to grow to US$685 billion in 2015.
Regions and countries with large numbers of migrants in oil exporting countries continue to see robust growth in inward remittance flows, compared with those whose migrant workers are largely concentrated in the advanced economies, especially Western Europe.
The top five projected recipients of remittances in 2012 are: India US$70 billion; China US$66 billion; the Philippines US$24 billion; Mexico US$24 billion; and Nigeria US$21 billion.