CaribWorldNews, WASHINGTON, D.C., Thurs. Aug. 13, 2009: Money transfers to the Caribbean and Latin American region will see a double digit drop this year, the Inter-American Development Bank`s Multilateral Investment Fund said Wednesday.
The IDB`s MIF said the regions are expected to receive about $62 billion from its migrants this year, a decline of about 11 percent from last year.
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 percent in the second quarter of 2009 compared 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 estimate was based on the findings of a report conducted by Manuel Orozco of the Inter-American Dialogue, a Washington, D.C 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 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 percent to about $42.3 billion this year.
Remittances from Europe, another major destination for Latin American migrants, are expected to drop by 14 percent to about $9 billion. Remittances from other parts of the world will slide about 4.5 percent to $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 $241 to $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.
The global economic crisis is being blamed for the decline with bank officials saying migrant workers from this region who are living in industrialized countries have been hard hit by recessions.
`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.`