DOMINICAN IMMIGRANTS AROUND WORLD TO SEND HOME RECORD $2.7 BILLION IN 2004; $1 BILLION FROM METROPOLITAN NEW YORK
Findings of surveys presented by the Inter-American Development Bank and the Earth Institute at Columbia University
NEW YORK ? Dominicans living abroad will send a record $2.7 billion back to their homeland this year, according to survey results released Monday by the Inter-American Development Bank (IDB) and the Earth Institute at Columbia University.
The Dominican diaspora, which numbers about 2 million adults worldwide, sent some $2.2 billion last year from the United States, Europe and various Latin American countries, according to the IDB?s Multilateral Investment Fund.
Dominican expatriates play a crucial role for their impoverished country, which has around 8.4 million people. More than 70 percent of these immigrants periodically send money to their relatives to help them with their living expenses. These contributions are equivalent to15 percent of the Dominican Republic?s gross domestic product.
About $1.6 billion of the total will be sent from the United States, where more than 1 million Dominicans reside. A majority of them are in the greater New York metropolitan area, source of nearly $1 billion a year in remittances to the Dominican Republic.
Europe is the second largest source of remittances to the Dominican Republic. Immigrants in that continent are due to send some $815 million this year. Spain is the destination of choice for most Dominicans, followed by Italy and France. In metropolitan Madrid alone there are some 160,000 Dominicans. This community sends home about $250 million each year.
Dominicans living in their neighboring island of Puerto Rico send back some $240 million a year.
?Two out of five adults in the Dominican Republic receive money from a relative living abroad,? MIF Manager Donald F. Terry said at a news conference held at Columbia University. ?This is the highest proportion of any of the Latin American countries we have analyzed over the past five years?.
Earth Institute Director Jeffrey D. Sachs, who announced that his institution and the IDB will collaborate on a program to study remittances to Latin America and the Caribbean, underscored the importance of deploying technology to lower the costs of these international money transfers and increase poor families? access to a wide variety of financial services.
?The opportunities to leverage remittances for improved development outcomes are tremendous,? said Sachs. ?Early progress is showing remittances linked to education, community development, microfinance, entrepreneurship and diaspora philanthropy. The Earth Institute?s research in this area aims to shed light on these financial flows.?
The MIF commissioned surveys in the United States and the Dominican Republic among people who send and receive remittances. The surveys conducted by pollster Sergio Bendixen offer a profile of this transnational community.
Dominicans, who are among the lowest-paid Latin American immigrants, maintain strong bonds with their families and homeland. Of those who make remittances, 75 percent call their relatives at least once a week and half of them visit their country at least once a year. Typically, they send home from $1,500 to $2,000 a year.
In the Dominican Republic, about 70 percent of the households that receive remittances earn under $3,500 a year. For about one million Dominican households, remittances constitute nearly half their total income. About 60 percent of the money is used to pay for daily expenses. Education absorbs about 17 percent, while smaller amounts are invested or saved. Respondents said they spent very little on luxuries.
An analysis of the remittances market between the United States and the Dominican Republic done by Earth Institute researcher Lenora Suki found that Dominicans in the New York region have fewer institutional options and tend to pay more for these services than other Latin Americans.
The greater expense is largely a result of the uncompetitive nature of this market, which is dominated by money transfer companies, as well as of Dominicans? strong preference for home-delivered remittances, Suki said. More than 80 percent of beneficiaries receive cash at their doorstep rather than picking up the money themselves at an agency or having it wired to a bank account.
?Banks have nothing to compete with this overwhelmingly popular product and home delivery is a culture that is difficult to change,? Suki commented. ?The problem is that it disconnects the people who receive remittances from the banking system. As a consequence, they may be less likely to save or invest.?
Dominicans usually pay higher commissions and foreign exchange fees than Mexicans and Colombians who send money from the New York region to their countries. In fact, Dominicans living in Spain pay substantially less for remittance services.
Among Dominicans who send and receive remittances there are higher percentages of people who have bank accounts than among other nationalities analyzed by the MIF. The missing piece, according to Terry, is that most Dominican financial institutions are not offering this service to their account holders.
However, some promising projects are starting to take shape. Quisqueyana, a Dominican money transfer company, plans to start working with ADOPEM, a leading microfinance institution in the Dominican Republic. Banco Hipotecario Dominicano (BHD) is upgrading its technology, expanding its network of point-of-sale terminals, and entering agreements with rural credit unions in order to provide less expensive remittance services throughout the country.
The news conference was held ahead of a seminar organized by the MIF and the Earth Institute, Sending Money Home: an Analysis of the Remittance Market between the United States and the Dominican Republic.
The seminar will take place on the morning of Tuesday, Nov. 23 in the Dag Hammarskj?ld Lounge of Columbia?s International Affairs Building, 420 West 118th Street, 6th floor. Its panels will feature regulators, bankers, money transfer industry executives, microfinance experts, academics and representatives of multilateral agencies.
The MIF, a fund administered by the Washington, DC-based IDB, promotes private sector development in Latin America and the Caribbean, focusing on microenterprises and small businesses. In recent years its work has helped reduce the costs of remittances to the region.
The Earth Institute at Columbia University is the world?s leading academic center for the integrated study of Earth, its environment and society. Through research, training and global partnerships, the institute mobilizes science and technology to advance sustainable development, emphasizing the needs of the poor.
Findings of surveys presented by the Inter-American Development Bank and the Earth Institute at Columbia University
NEW YORK ? Dominicans living abroad will send a record $2.7 billion back to their homeland this year, according to survey results released Monday by the Inter-American Development Bank (IDB) and the Earth Institute at Columbia University.
The Dominican diaspora, which numbers about 2 million adults worldwide, sent some $2.2 billion last year from the United States, Europe and various Latin American countries, according to the IDB?s Multilateral Investment Fund.
Dominican expatriates play a crucial role for their impoverished country, which has around 8.4 million people. More than 70 percent of these immigrants periodically send money to their relatives to help them with their living expenses. These contributions are equivalent to15 percent of the Dominican Republic?s gross domestic product.
About $1.6 billion of the total will be sent from the United States, where more than 1 million Dominicans reside. A majority of them are in the greater New York metropolitan area, source of nearly $1 billion a year in remittances to the Dominican Republic.
Europe is the second largest source of remittances to the Dominican Republic. Immigrants in that continent are due to send some $815 million this year. Spain is the destination of choice for most Dominicans, followed by Italy and France. In metropolitan Madrid alone there are some 160,000 Dominicans. This community sends home about $250 million each year.
Dominicans living in their neighboring island of Puerto Rico send back some $240 million a year.
?Two out of five adults in the Dominican Republic receive money from a relative living abroad,? MIF Manager Donald F. Terry said at a news conference held at Columbia University. ?This is the highest proportion of any of the Latin American countries we have analyzed over the past five years?.
Earth Institute Director Jeffrey D. Sachs, who announced that his institution and the IDB will collaborate on a program to study remittances to Latin America and the Caribbean, underscored the importance of deploying technology to lower the costs of these international money transfers and increase poor families? access to a wide variety of financial services.
?The opportunities to leverage remittances for improved development outcomes are tremendous,? said Sachs. ?Early progress is showing remittances linked to education, community development, microfinance, entrepreneurship and diaspora philanthropy. The Earth Institute?s research in this area aims to shed light on these financial flows.?
The MIF commissioned surveys in the United States and the Dominican Republic among people who send and receive remittances. The surveys conducted by pollster Sergio Bendixen offer a profile of this transnational community.
Dominicans, who are among the lowest-paid Latin American immigrants, maintain strong bonds with their families and homeland. Of those who make remittances, 75 percent call their relatives at least once a week and half of them visit their country at least once a year. Typically, they send home from $1,500 to $2,000 a year.
In the Dominican Republic, about 70 percent of the households that receive remittances earn under $3,500 a year. For about one million Dominican households, remittances constitute nearly half their total income. About 60 percent of the money is used to pay for daily expenses. Education absorbs about 17 percent, while smaller amounts are invested or saved. Respondents said they spent very little on luxuries.
An analysis of the remittances market between the United States and the Dominican Republic done by Earth Institute researcher Lenora Suki found that Dominicans in the New York region have fewer institutional options and tend to pay more for these services than other Latin Americans.
The greater expense is largely a result of the uncompetitive nature of this market, which is dominated by money transfer companies, as well as of Dominicans? strong preference for home-delivered remittances, Suki said. More than 80 percent of beneficiaries receive cash at their doorstep rather than picking up the money themselves at an agency or having it wired to a bank account.
?Banks have nothing to compete with this overwhelmingly popular product and home delivery is a culture that is difficult to change,? Suki commented. ?The problem is that it disconnects the people who receive remittances from the banking system. As a consequence, they may be less likely to save or invest.?
Dominicans usually pay higher commissions and foreign exchange fees than Mexicans and Colombians who send money from the New York region to their countries. In fact, Dominicans living in Spain pay substantially less for remittance services.
Among Dominicans who send and receive remittances there are higher percentages of people who have bank accounts than among other nationalities analyzed by the MIF. The missing piece, according to Terry, is that most Dominican financial institutions are not offering this service to their account holders.
However, some promising projects are starting to take shape. Quisqueyana, a Dominican money transfer company, plans to start working with ADOPEM, a leading microfinance institution in the Dominican Republic. Banco Hipotecario Dominicano (BHD) is upgrading its technology, expanding its network of point-of-sale terminals, and entering agreements with rural credit unions in order to provide less expensive remittance services throughout the country.
The news conference was held ahead of a seminar organized by the MIF and the Earth Institute, Sending Money Home: an Analysis of the Remittance Market between the United States and the Dominican Republic.
The seminar will take place on the morning of Tuesday, Nov. 23 in the Dag Hammarskj?ld Lounge of Columbia?s International Affairs Building, 420 West 118th Street, 6th floor. Its panels will feature regulators, bankers, money transfer industry executives, microfinance experts, academics and representatives of multilateral agencies.
The MIF, a fund administered by the Washington, DC-based IDB, promotes private sector development in Latin America and the Caribbean, focusing on microenterprises and small businesses. In recent years its work has helped reduce the costs of remittances to the region.
The Earth Institute at Columbia University is the world?s leading academic center for the integrated study of Earth, its environment and society. Through research, training and global partnerships, the institute mobilizes science and technology to advance sustainable development, emphasizing the needs of the poor.