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Latin America and Caribbean remittances to drop 11 per cent

Posted by CaribShout on August 13, 2009 at 8:41pm

"The crisis is clearly limiting migrants' capacity to send money home," said IDB President Luis Alberto Moreno. (Photo: Chasquionline.com) WASHINGTON, United States, August 13, 2009 - Latin America and the Caribbean will receive about US$62 billion in remittances from its expatriates in 2009, a decline of about 11 per cent from last year, according to the Inter-American Development Bank's Multilateral Investment Fund (MIF). The estimate reflects the impact of the global economic crisis on migrant workers from this region, most of whom are living in industrialized countries hit by recessions, such as the United States, Spain and Japan. "The crisis is clearly limiting migrants' capacity to send money home," said IDB President Luis Alberto Moreno. "Nevertheless, remittances have decreased less than other private financial flows to the region, as migrants continue to make sacrifices to provide for their families." The estimate was based on the findings of a report conducted by Manuel Orozco of the Inter-American Dialogue, a Washington, DC think-tank, in collaboration with MIF remittances specialists Natasha Bajuk and Gregory Watson. The report was based on data from a survey commissioned by the MIF of 1,350 Latin American and Caribbean migrants carried out between March and June, combined with desk research and statistical analysis of migration patterns and unemployment. The findings in the new report are in line with the MIF's analysis of central bank data on remittance receipts. According to these official sources, remittances dropped 15 per cent in the second quarter of 2009 with respect to the same period last year. In South America, Central America and the Andean region the slide was less steep than in previous quarters, while in Mexico and Caribbean countries the downward trend accelerated. The decline in remittances could impact more than four million people in Latin America and the Caribbean, nearly one-third of them in Mexico, by far the leading recipient of remittances in the region. Remittances from the United States - where unemployment among Latin Americans is higher than among the general population - are expected to decline by 11 per cent to about US$42.3 billion this year. Remittances from Europe, another major destination for Latin American migrants, are expected to drop by 14 per cent to about US$9 billion. Remittances from other parts of the world will slide about 4.5 per cent to US$10.4 billion. The survey of migrants in the United States found that they are sending money with less frequency and in smaller amounts. In a similar poll conducted last year, migrants averaged about 15 transfers annually. This year the average is expected to drop to 12 times. The average amount sent per transfer is slipping from US$241 to US$230. However, the survey pointed out that even people who have lost their jobs are still sending money home, usually by dipping into savings. Migrants are employing different strategies to keep making remittances, even during the downturn.
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