The Slowdown in the Remittance Market

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The Slowdown in the Remittance Market

• Presenter Joan-Marie Powell
• Managing Director GraceKennedy Remittance
  Services Ltd.
• June 13, 2009

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What Are Remittances?

• Described as the expression of profound
  emotional bonds between relatives separated by
  geographic borders. (Manuel Orozco, 2004)

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Migration

• The Remittance Industry has its roots in
  migration
• The internationalization of labour
• Transnational households
• The movement of money and goods to support family
  left behind

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Intra-Regional Caribbean Migration
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Remittances A Global Perspective
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Remittances to Latin America and the Caribbean
2008 (US millions)
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Growth in Remittances LAC Region
http//www.iadb.org/mif/remesas_map.cfm?languageE
nglishparid5
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Growth in Remittances in the English Speaking
Caribbean
http//www.iadb.org/mif/remesas_map.cfm?languageE
nglishparid5
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The Impact of Global Economic Downturn on
Remittances

• Remittance Inflows affected by global economic
  down turn
• Downturn in sectors employing migrants
• Changes in Immigration Climate
• Two main types of transfers -
• Discretionary Flows
• Non Discretionary (Transnational Households)

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Social and Economic Impact of Remittances

• Facilitates the day to day needs of transnational
  households
• Acts as a buffer to poverty
• Reduces Social Inequality
• Allows for improved standard of living of
  receivers (e.g. stimulates construction)
• Positively impacts rural development
• Increases savings

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Social and Economic Impact of Remittances

• Provides a steady supply of foreign exchange
• Acts as a form of Foreign Direct Investments
  (FDI) at the Micro Level
• Stimulates the economy
• Increased consumption taxes
• Returned residents bring expertise and experience
  into the developing economy
• Remittance Industry

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Impact of Possible Paths
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Looking Ahead

• Lessons
• Remittance flows will continue
• Excessive reliance on remittances is risky
• Subject to the nuances of the sending economies
• Opportunities
• Diversified Economic Model
• Explore a Labour Export Policy
• Leverage returned and expatriate migrant
  experience
• Increase remittance Inflows for development

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Remittances Will Continue To Grow Based On
Existing Trends

• Worker demand will continue in first world
  countries
• Home countries will continue to offer limited
  prospects to residents
• Migrants will continue to support dependents back
  home
• Greater use of technology
• Greater regulations
• Offering greater value-added services

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Conclusions

• There is a positive correlation between migration
  and remittances
• Remittances is an economic driver
• Remittances is impacted by global economic trends
• The Diaspora is extremely important