The World Bank reported on 3 October 2017 that remittances to Latin America and the Caribbean are expected to increase by 6.9% to US$79 billion in 2017. Remittances are today more important than international aid in the region.
As reported by the World Bank, economic growth and improvement in the labor market in the United States is having a positive impact on the outlook for remittance flows to the region. The World Bank, however, states that growth in remittances will moderate in 2018 to US$82 billion.
Overall, the World Bank estimates that officially recorded remittances to developing countries are expected to grow by 4.8% to US$450 billion for 2017. Global remittances, which include flows to high-income countries, are projected to grow by 3.9% to US$596 billion.
The World Bank says that the global average cost of sending US$200 remained stagnant at 7.2% in the third quarter of 2017. The World Bank says that two major factors contributing to high costs are exclusive partnerships between national post office systems and any single money transfer operator (MTO), which stifles market competition and allows the MTO to raise remittance fees, as well as de-risking by commercial banks, as they close bank accounts of MTOs, in order to cope with the high regulatory burden aimed at reducing money laundering and financial crime.
“Remittances are a lifeline for many residents in developing countries; this is particularly true following natural disasters, such as the recent earthquakes in Mexico and the storms devastating the Caribbean. It is imperative for the global community to reduce the cost of remitting money, by eliminating exclusivity contracts, especially in the high-income OECD countries. There is also an urgent need to address de-risking behavior of global banks,” said Dilip Ratha, lead author of the migration brief and director of the Global Knowledge Partnership on Migration and Development.
The Migration and Development Brief and the latest migration and remittances data are available at Knomad
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World Bank
World Bank
5 October 2017
