|Santa Catalina Arch, Antigua, Guatemala. Photo © Sanket Mohapatra/World Bank|
One of the issues that many central banks are struggling with is how to adapt to the new definitions introduced by the IMF Committee on Balance of Payments Statistics as part of the forthcoming sixth revision to the Balance of Payments Manual (see Remittance Compilation Guide). While the new definitions are conceptually sound, there are several practical difficulties:
- First, personal remittances are now based on residency status, instead of the earlier one based on migration status. In principle, these transfers from “residents” to “non-residents” include those by natives (e.g. charitable donations abroad) in addition to transfers by migrants to their family and friends.
- Second, it is not easy to estimate the component “compensation of employees” as the gross earnings of non-resident workers less their travel and transport costs, taxes, and social contributions. Computing these requires information on wages, living costs, sector of work and other information on short-term migrants from household or labor force surveys. Many seasonal and cross-border migrants who sometimes lack legal status may not be captured in surveys.
- Finally, there is also a risk of double-counting flows, as it may be difficult to identify transfers made only by residents (and exclude non-residents) in the data collected from money transfer companies and banks.
CEMLA is making an effort to help Latin American central bankers with the remittance statistics. More help is clearly needed to transition to the new definitions.
Something that drew my attention in a presentation was the status of China as the largest recipient of transfers from Russia to non-CIS countries through money transfer operators (MTOs) and post offices in 2009 (see remittance breakdown by country). Perhaps more surprisingly, the average transfer to China was nearly double the average for non-CIS countries and more than four times that of CIS countries. It is likely that some of these transfers reflect small-value payments related to trade and investments. Nonetheless, this issue merits more investigation.
| Street hawker in Antigua, Guatemala.
Photo© Sanket Mohapatra/World Bank
Some of the sights that I would have liked to see, but could not because of lack of time, are the Mayan pyramids, a UNESCO World Heritage site, and the volcanic “black sand” beaches on the country’s Pacific coast.
|Main square, Antigua, Guatemala. Photo © Sanket Mohapatra/World Bank|