Remittances to the Caribbean dropped by over five percent in the last three months of 2008, Inter-American Development Bank data showed Monday.
A 2008 graph of remittance flows unveiled yesterday showed money transfers to the region turned negative in the last quarter of 2008 by almost six percent, a trend that was also true for Latin American nations. Guyana showed a drop in overall remittances for 2008.
Looking at last quarter trends, researchers of the bank`s Multilateral Investment Fund, said remittances late last year dropped to about $17 billion to those regions, and they predict the trend could continue this year.
Seven of the region’s nations receive 12 percent or more of GDP from their compatriots abroad, including Guyana, Haiti, Honduras, Jamaica, El Salvador, Nicaragua and Guatemala. The Caribbean, like most nations in this region, had seen continuous upward growth in remittances since 2001.
For the few countries in the Andean regions that have reported data for January, totals were down by as much as 13 percent, analysts added. The economic slowdown in the United States, sharp spikes in food and fuel prices, a harsher climate against immigration, and a weakening U.S. dollar were all blamed for the drop.
The decline comes after almost a decade of growth in remittances to Latin America and the Caribbean. A decline in remittances is likely to translate into greater demand on social safety networks by families who rely on money flows from abroad to cover basic expenses, researchers said, since many of the Caribbean nations are highly dependent on the remittances.
The money sent home by migrant workers is a key source of income for millions of families across this region. Last year Latin American and Caribbean expatriates transferred some $69.2 billion to their homelands, 0.9 percent more than in 2007, according to the IDB.
`While it is too early to project by how much remittances may decline in 2009, this is bad news for millions of people in our region who depend on these flows to make ends meet,` said IDB President Luis Alberto Moreno. `The issue has become more complex, as more factors have come into play. The world is facing its worst economic crisis in recent memory. Unemployment is rising in industrialized nations. The climate against immigration is becoming harsher. Even exchange rate fluctuations are playing a larger role than before.`
