Latin American and Caribbean recipients of money remittances have received more worrying news of yet another predicted decline in remittance flows to the region as job cuts and the attendant need to curb spending continue to impact on immigrants in developed countries, chiefly the United States.
Information released earlier this month based on a study of remittance flows undertaken by the Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF) indicate that Jamaica is among Caribbean Community (CARICOM) countries likely to be most affected by an anticipated three-year low of US$62 billion in remittance flows to Latin America and the Caribbean.
Remittance flows to Jamaica have already declined by close to 16 per cent since January this year with inflows expected to drop by around $US300m to $US1.7 billion for the remainder of the current year.
The study, a collaborative effort involving remittance experts from the MIF and the International Monetary Fund (IMF) which was undertaken in March and June of this year indicate that the volume of remittances to the region have slipped from US$241 per transaction to US$230 per transaction though the survey pointed out that even Latin American and Caribbean senders who have lost their jobs continue to remit monies to relatives in the region from their savings, albeit at reduced levels.
Fears that the continued decline in remittance flows will directly affect the poorest people receiving, giving rise to possible worsening poverty and social unrest have prompted the staging of an international forum on remittances in Tunis in October this year. While the forum is expected to further refine experts’ understanding of remittances and their impact on the quality of life in receiving countries, those experts say that resolving the remittance problem is largely a function of an ease in the global economic and financial crisis and, particularly, a return to work by immigrants who have lost their jobs in metropolitan countries, including the United States, Britain and Canada.
Overall, Latin America and the Caribbean is expected to have to absorb an 11 per cent drop in remittance levels from 2008 and a decline to 2006 levels.
A few weeks ago the Stabroek Business conducted a small survey among less than forty Georgetown-based parents as part of a story on consumer spending on items associated with their children’s return to school for the new academic year. More than 70 per cent of respondents said that their ability to fully meet their children’s needs for the new academic year had been affected to varying degrees by reduced remittance flows or by the non-receipt of anticipated seasonal remittances. An estimated 80 per cent of Guyanese residing at home receive remittances from abroad either regularly or occasionally with most of those monies going towards essential consumer spending including utility bills, rents, mortgages and food.
The findings of the recent study are reportedly in line with MIF’s analysis of regional central bank data on remittance receipts which indicate that remittance flows to the region declined by 15 per cent during the second quarter of this year.
The latest predictions on the likely levels of remittance flows to the region this year was based on a survey carried out among 1,350 Latin American and Caribbean immigrants in the United States earlier this year.
