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Latin America & Caribbean

Remittances and Financial Inclusion: Evidence from El Salvador

Submitted by Maria Soledad Martinez Peria on Fri, 10/14/2011 - 09:45

While we know a lot about the impact of remittances on growth, investment, poverty, inequality, health, and education, the potential effects of international remittances on the domestic financial system and financial inclusion have not received much attention. There are several ways in which remittances could affect financial inclusion (that is, facilitating households’ access to and use of financial services). First, remittances might increase the demand for savings instruments. The fixed costs of sending remittances make the flows lumpy, providing households with excess cash for some period of time. This might potentially increase their demands for deposit accounts, since financial institutions offer households a safe place to store this temporary excess cash. Second, remittances might increase household’s likelihood of obtaining a loan. Processing remittances flows provides financial institutions with information on the income of recipient households. This information might make financial institutions more willing and able to extend loans to otherwise opaque borrowers. On the other hand, since remittances might help relax households’ financing constraints, the demand for credit might fall as remittances increase.

Are fewer Mexicans crossing the border to the United States?

Submitted by Sonia Plaza on Wed, 08/03/2011 - 08:53

Migration flows in both directions between the United States and Mexico have diminished according to recent statistics released by the Mexican and United States governments.


Mexican immigration to the United States began to decline in the mid-2006, and that pattern has continued into 2010. The Pew Hispanic Center analysis of Mexican government data indicates that the number of Mexicans annually leaving Mexico for the U.S. declined from more than one million in 2006 to 404,000 in 2010. Rand Corporation also found that the Mexican immigrants returning to Mexico have not increased despite the crisis. 

Remittance flows to developing countries recover to pre-crisis levels

Submitted by Sanket Mohapatra, co-authors: Dilip Ratha, Ani Silwal on Mon, 05/23/2011 - 14:26

We have just released our latest estimates and outlook for remittance flows to developing countries (see brief). Officially recorded remittance flows to developing countries recovered quickly to $325 billion in 2010 after the global financial crisis. But they have not kept pace with rising prices in recipient countries. Remittance flows are expected to grow at lower but more sustainable rates of 7-8 percent annually during 2011-13 to reach $404 billion by 2013.

Helping Haiti through migration and remittances

Submitted by Dilip Ratha on Tue, 01/19/2010 - 13:37

A laudable measure that will benefit Haitians, more than any other aid and assistance, is the decision by the United States to grant them temporary protected status (TPS) for 18 months. This will allow about 200,000 Haitians currently residing in the US without proper documents to live and work here legally, without a fear of deportation. It would also allow them to send money home quickly and efficiently through formal remittance channels.

Haiti receives between $1.5-1.8 billion in remittances each year (some estimates are even larger, over a half of its national income).  If the TPS resulted in a 20 percent increase in the average remittance per migrant, we would expect an additional $360 million remittance flows to Haiti in 2010! What is more, if the TPS were to be extended once beyond the currently stipulated 18 months – the extension is almost certain to happen, judging by the history of extensions of the TPS for El Salvador, Honduras, Nicaragua, Somalia and Sudan – additional fund flows to Haiti would exceed a billion dollar over three years. That would be a billion dollar of financial help coupled with goodwill and advice, tailored to the needs of the recipient. Financial help in the form of remittances from family members abroad is always the first to arrive in times of distress. Remittances to Haiti this year will surge, as they have done whenever and wherever there has been a crisis or natural disaster (see paper).

Monthly remittances data update

Submitted by Ani Silwal on Fri, 12/04/2009 - 09:37

Latin America and Caribbean:

  • Remittances to Mexico declined 35.8% y-o-y in October. Year-to-date decline is 16.5%.
  • Remittances to Colombia declined 19.5% y-o-y in October. Year-to-date decline is 17.5%.
  • Remittances to Dominican Rep. increased 0.5% y-o-y in September. Year-to-date decline is 2.2%.
  • Remittances to Nicaragua declined 2.4% y-o-y in October. Year-to-date decline is 6.3%.
  • Remittances to Jamaica declined 6.0% y-o-y in October. Year-to-date decline is 14.6%.

Fall in remittances to Mexico in October - a data quirk

Submitted by Sanket Mohapatra on Tue, 12/01/2009 - 20:27

With Ani

According to the Banco de Mexico, remittance flows to Mexico declined 36% in October 2009 on a year on year basis, the largest fall ever recorded. A closer look at the data, however, shows that the latest number overstates the drop, as the same month last year saw an unusual surge in remittances as migrants took advantage of a sharp depreciation of the Mexican peso against the U.S. dollar to send additional remittances (see figure and blog post). 

Updates to monthly remittances data

Submitted by Ani Silwal on Tue, 11/17/2009 - 16:38

Updates to monthly remittances data

  • Remittances to Guatemala declined 10.9% y-o-y in October. Year-to-date decline is 9.9%.
  • Remittances to El Salvador declined 7.1% y-o-y in October. Year-to-date decline is 10%.
  • Remittances to Jamaica declined 17.3% y-o-y in September. Year-to-date decline is 15.5%.
  • Remittances to Nicaragua declined 8.4% y-o-y in September. Year-to-date decline is 6.3%.
  • Remittances to Pakistan grew 62.7% y-o-y in October. Year-to-date growth is 26.7%.
  • Remittances to Nepal grew 2% y-o-y in September. Year-to-date growth is 14.2%.
  • Remittances to the Philippines grew 8.6% y-o-y in September. Year-to-date growth is 4.2%.

 

Remittances to Latin America and Caribbean are falling:


 

Diaspora Latina, remesas y crisis económica

Submitted by Sonia Plaza on Thu, 10/29/2009 - 18:02

Acabo de realizar una podcast entrevista con Ximena Gutiérrez (coordinadora del sitio web del Banco Mundial en español www.bancomundial.org) sobre cómo la crisis financiera mundial esta impactando a la “diaspora latina”, a la demanda laboral de los trabajadores migrantes y a los flujos de remesas a América Latina.

Business as Usual in Guatemala

Submitted by Sanket Mohapatra on Tue, 09/15/2009 - 11:13

Santa Catalina Arch, Antigua, Guatemala. Photo © Sanket Mohapatra/World Bank

I recently made a presentation on the impact of the financial crisis and our outlook for remittances in 2009-10 at a conference on improving central bank measurement and procedures on remittances organized by CEMLA and the Banco de Guatemala on September 8-10. My colleague Jacqueline Irving presented on a global survey of central banks.The sessions and interactions with the participants made me aware that central bankers are not just interested in measuring remittances accurately, but are thinking about a range of issues that affect both remittances and migration—ranging from how exchange rate movements can create incentives to send remittances for investment motives, to intra-regional and bilateral migration flows.
 

España aprueba plan de retorno de inmigrantes

Submitted by Sonia Plaza on Sat, 09/20/2008 - 15:45

Un plan de retorno voluntario de los inmigrantes legales que no tienen empleo ha sido aprobado el 19 de Setiembre del 2008  por el gobierno de España.  Se podrán acoger a esta nueva iniciativa los inmigrantes que no pertenezcan a la Unión Europea y que sus países hayan firmado convenios bilaterales con España en materia de portabilidad de seguridad social.  El programa esta dirigido para los inmigrantes de Marruecos, Ecuador, Perú, Colombia, Ucrania, Argentina, Republica Dominicana, Rusia, Uruguay, Brasil, Venezuela, Chile, Filipinas, Paraguay, Estados Unidos, México, Túnez, Canadá y Australia.  

Los inmigrantes legales que se han quedado sin trabajo tendrán que renunciar a su permiso de residencia y a su permiso de trabajo si deciden regresar voluntariamente a su país de origen. El incentivo que ofrece el gobierno español es de otorgarles un adelanto del 40% de los beneficios de desempleo que gozarían antes de salir de España y el resto, un mes después de llegar a su país. La única condición es que no podrán retornar a España antes de los tres anos. Después de tres años recién podrán volver a solicitar la residencia y el permiso de trabajo para volver a España.  

De acuerdo con el ministro de Trabajo e Inmigración, Celestino Corbacho, el plan aprobado en el Consejo de Ministros será efectivo en los primeros días de noviembre y tendrá un carácter de permanente. (Ver http://newsok.com/xml/rss/3299975/) ¿Se acogerán los inmigrantes a este plan? ¿Dónde prefieren esperar los trabajadores hasta que pase la crisis económica: en sus países de origen o en España?