Remittances to the Caribbean and Latin America to top $100 billion a year by 2010, says IDB

from Caribbean Net News

GUATEMALA CITY, Guatemala: Remittances to the Caribbean and Latin America will continue to grow in coming years and surpass $100 billion a year by 2010, according to the Inter-American Development Bank’s Multilateral Investment Fund (MIF).

MIF Manager Donald Terry on Sunday presented the estimate for the money transfers made by Latin American and Caribbean migrants at a news conference held here on the eve of the annual meeting of the IDB Board of Governors, which convened here Monday and Tuesday.

“Given present economic and demographic trends in Latin America and the Caribbean and in industrialized countries, remittances will continue to grow in volume over the next few years to more than $100 billion a year by 2010,” he said.

For the IDB and the MIF, added Terry, this growth is not a cause for celebration because it reflects the fact that the region cannot generate sufficient income opportunities to prevent millions of people from migrating.

Nevertheless, he said, remittances will continue to flow and already exceed both foreign direct investment and overseas aid to Latin America and the Caribbean, helping millions of families to escape poverty.

“The challenge for the countries in this region, and for institutions such as the IDB and the MIF, is to find ways so these flows may have a greater development impact by offering migrants and their families more options to get more out of their money,” Terry said.

The IDB and the MIF support programs to expand the economic impact of remittances by encouraging financial institutions to handle these flows so that people who send or receive money transfers may build credit histories and gain access to services such as savings accounts, insurance, pensions and business and housing loans.

The MIF will also support a new program launched by the International Fund for Agricultural Development (IFAD), which will establish a $10 million facility to finance projects to cut the cost of making money transfers to remote rural areas around the world.

Remittances in 2006 Latin American and Caribbean countries last year received some $62.3 billion from its migrants, mostly in North America, Europe and Asia. The total was 14 percent higher than the amount for 2005, said Terry.

At $23 billion, Mexico was by far the top recipient of remittances, followed by Brazil ($7.4 billion) and Colombia ($4.6 billion).

Several countries received slightly more or less than $3 billion: Guatemala, El Salvador, the Dominican Republic, Ecuador and Peru.

For 2007, Terry said, the MIF expects remittances to Latin America and the Caribbean to rise to around $72 billion.