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Latin America & Caribbean

De-risking and remittances: the myth of the “underlying transaction” debunked

Marco Nicoli's picture
Also available in: Español | Français
Societé Genérale Mauritanie bank branch in Nouakchott, Mauritania.
Societé Genérale Mauritanie bank branch in Nouakchott, Mauritania. ©️ Arne Hoel

This Saturday, June 16, we celebrate International Day of Family Remittances to recognize “the significant financial contribution migrant workers make to the wellbeing of their families back home and to the sustainable development of their countries of origin.”

Which is why it is the perfect time to talk about a trend facing remittance service providers who migrants rely on to transfer their money across borders and back home.
In recent years, the international remittance services industry has been subject to the so-called “de-risking” phenomenon. Banks believe that anti-money laundering and counter financing of terrorism (AML/CFT) regulations and enforcement practices have made serving money transfer operators (MTOs) too risky from a legal and reputational perspective. For banks, the profit of serving MTOs is not considered sufficient to justify the level of effort required to manage these increased risks.
 

Thank goodness, we had an extra bridge in stock!

Malaika Becoulet's picture
Credit: Joshua Stevens/NASA Earth Observatory
On October 4, 2016, category 4 Hurricane Matthew struck the southern part of Haiti. Strong winds and rain triggered heavy flooding and landslides that resulted in 500 fatalities, along with widespread infrastructure damage and economic loss. The hurricane caused the collapse of the Ladigue Bridge, a vital asset connecting the southern peninsula of Haiti to the capital city and the rest of the country. The collapse left 1.4 million people completely isolated, making it extremely hard to deliver the aid and humanitarian assistance they needed. Overall damage and losses were equivalent to 32% of GDP, with transport accounting for almost a fifth of the total.
 
Haiti is among the countries that are most vulnerable to natural disasters including hurricanes, floods, and earthquakes—the result of a combination of factors that include high exposure to natural hazards, vulnerable infrastructure, environmental degradation, institutional fragility, and a lack of adequate investment in resilience. In Haiti, 80% of people and goods are transported by road. First aid and humanitarian resources, often concentrated in Port-au-Prince, need to transit through congested and sometimes inaccessible roads to reach affected areas. In that context, strengthening and building resilient infrastructure is key.
 
Since 2008, the World Bank has supported the reconstruction of 15 major bridges and stabilized 300 kilometers of roads to enhance the resilience of Haiti’s transport network. One of the most significant innovations that came out of this effort was the adoption of standardized emergency bridges that can be assembled within 2- 3 months from pre-designed and interchangeable components.

Can temporary employment help reduce crime?

Fabrizio Zarcone's picture

Activities of the Temporary Income Support Program, or PATI / World Bank

With collaboration of Emma Monsalve.

The 2008-09 financial crisis significantly affected El Salvador. The economy, as measured by gross domestic product, contracted 3.1 percent in 2009. The crisis seriously affected employment: between 2008 and 2009, more than 100,000 Salvadorans, or 3 percent of the labor force, became unemployed or under-employed.

Five ways cities can curb plastic waste

Silpa Kaza's picture

As the world observes World Environment Day this week, we should be mindful that there will be more plastic in the oceans than fish by 2050 if nothing is done, according to the Ellen & MacArthur Foundation.
 
The negative impacts that plastic is having on the environment and human health is profoundly evident:
  • Respiratory issues are increasing because of air pollution from burning plastic.
  • Animal lifespans are shortened because of consuming plastic.
  • Littered plastic is clogging drains and causing floods.
  • And unmanaged plastic is contaminating our precious oceans and waterways…

The miracle of mangroves for coastal protection in numbers

Michael W. Beck's picture
© Ursula Meissner/The Nature Conservancy
© Ursula Meissner/The Nature Conservancy

The North Atlantic hurricane season officially opens June 1, and there are predictions that storms this year could be worse than average again. That would be bad since last year was the costliest year on record for coastal storms. Communities and countries across the Caribbean and SE USA were particularly hard hit. The need for resilient solutions to reduce these risks is paramount.

There has been growing though largely anecdotal evidence that mangroves and other coastal habitats can play important roles in defending coastlines. Nonetheless it has been difficult to convince most governments and businesses (e.g., insurance, hotels) to invest in these natural defenses in the absence of rigorous valuations of these benefits.

So in 2016 The Nature Conservancy teamed with the World Bank and scientists from the public, private and academic sectors to identify how to rigorously value the flood protection benefits from coastal habitats. In short, we recommended that we value this ecosystem service by adopting tools and from the engineering, risk and insurance sectors and following an Expected Damage Function (EDF) approach. This approach assesses the difference in flooding and flood damages with and without coastal habitats such as mangroves across the entire storm frequency distribution (e.g., 1-in-10, -25 and -100 year storms).

Towards a culture of prevention: Disaster risk reduction begins at home!

Jorge Luis Alva-Luperdi's picture

As May 31st comes around yet again, I’m reminded of this date 48 years ago. The peaceful South American country of Peru was going about another normal day… until the clock struck 3:23 pm. Life changed in the blink of an eye, as an 8.0 magnitude earthquake hit the Peruvian regions of Ancash and La Libertad. It was an unimaginable catastrophe. 

The town of Yungay, in Ancash, was almost flattened in just 45 seconds — the earthquake smashed homes, schools, and public infrastructure. The shock of the quake destabilized glaciers on the mountain known as Huascaran, located 15 km east of Yungay, causing millions of cubic meters of rock, ice, and snow to come tearing down at high speeds towards Yungay. Within minutes, the city was buried, along with almost 25,000 of its residents, many of whom had run to church to pray after the earthquake.

This “Great Peruvian Earthquake” of 1970 is a landmark in the history of natural disasters. The overall toll was around 74,000 people dead; about 25,600 people declared missing; 43,000 injured; and many more were left homeless, including thousands of children. Only 350 people survived in Yungay — they had climbed to the town’s elevated cemetery, a curious case of the living seeking refuge among the dead. Elsewhere, a circus clown saved 300 children by taking them to a local stadium.

Planned Relocations: Learning from Latin American Experiences

Elizabeth Ferris's picture
When landslides destroy communities or sea levels rise how do governments move people out of harm’s way?  “Planned relocations” is the term being used to describe the process of moving people in order to protect them from disasters or from the effects of environmental change.

The transition to low-carbon buses in Mexico: It’s not (only) about the money

Alejandro Hoyos Guerrero's picture
Credit: Taís Policanti/WRI
Transitioning from diesel buses to cleaner technologies can significantly contribute to tackling air pollution in cities and reducing the carbon footprint of urban transport. As alternatives to diesel are getting more and more viable, many governments and development partners are encouraging bus operators to make the switch, mostly by offering financial incentives such as example 1 or example 2.

However, after promoting cleaner buses in Mexico for five years, we have seen firsthand that financial incentives alone are not enough. Specifically, there are three main obstacles that impede the expansion of cleaner bus fleets, and should be addressed appropriately.

New technologies and risk aversion

In general, private bus operators tend to be very risk averse when it comes to experimenting with new vehicle technologies. This is not exactly surprising: according to our own calculations from different projects in Latin America, variables related to vehicle performance—like fuel and maintenance—make up over 2/3 of costs over the life cycle of a conventional diesel bus. In that context, operators who are not familiar with the performance of new vehicle technologies can understandably perceive the transition to a cleaner fleet as a huge financial gamble.

The 2018 Atlas of Sustainable Development Goals: an all-new visual guide to data and development

World Bank Data Team's picture
Download PDF (30Mb) / View Online

“The World Bank is one of the world’s largest producers of development data and research. But our responsibility does not stop with making these global public goods available; we need to make them understandable to a general audience.

When both the public and policy makers share an evidence-based view of the world, real advances in social and economic development, such as achieving the Sustainable Development Goals (SDGs), become possible.” - Shanta Devarajan

We’re pleased to release the 2018 Atlas of Sustainable Development Goals. With over 180 maps and charts, the new publication shows the progress societies are making towards the 17 SDGs.

It’s filled with annotated data visualizations, which can be reproducibly built from source code and data. You can view the SDG Atlas online, download the PDF publication (30Mb), and access the data and source code behind the figures.

This Atlas would not be possible without the efforts of statisticians and data scientists working in national and international agencies around the world. It is produced in collaboration with the professionals across the World Bank’s data and research groups, and our sectoral global practices.
 

Trends and analysis for the 17 SDGs

Capital account liberalization and controls: Structural or cyclical policy tools?

Poonam Gupta's picture

Capital flows to emerging market economies are deemed volatile, driven more by external than domestic factors. Surges in capital flows often generate macroeconomic imbalances in emerging markets, resulting in rapid credit growth, asset price inflation, and economic overheating. Reversals are disruptive too, often causing financial volatility, economic slowdown, and in some cases distress in the banking and corporate sectors.


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