CARIBBEAN-ECONOMY -UN report says increase in remittances to Caribbean helps fight poverty

UNITED NATIONS, Jun. 15, CMC – A new United Nations report says there has been a sharp increase in money being sent by migrants to the Caribbean and other developing countries.
The first-ever study, “Sending Money Home: Contributing to the SDGs One Family at a Time,” by the United Nations International Fund for Agricultural Development (IFAD), highlights the role these funds – more than US$445 million in 2016 – play in helping development countries attain the UN Sustainable Development Goals (SDGs) .
“About 40 per cent of remittances – US$200 billion – are sent to rural areas where the majority of poor people live,” said Pedro de Vasconcelos, manager of IFAD’s Financing Facility for Remittances and lead author of the report, which notes that over the past decade, remittances have risen by 51 percent – far greater than the 28 percent increase in migration from these countries.
“This money is spent on food, health care, better educational opportunities and improved housing and sanitation. Remittances are therefore critical to help developing countries achieve the Sustainable Development Goals,” underscored de Vasconcelos.
The UN said “Sending Money Home” covers a 10-year trend in migration and remittance flows from 2007-2016.
While the report shows that there have been increases in sending patterns in most regions of the world, the sharp rise over the past decade is in large part due to Asia, which has witnessed an 87 per cent increase in remittances.
Despite the decade-long trend, IFAD President Gilbert F. Houngbo noted the impact of remittances must first be viewed one family at a time.
“It is not about the money being sent home, it is about the impact on people’s lives,” he said. “The small amounts of US$200 or US$300 that each migrant sends home make up about 60 per cent of the family’s household income, and this makes an enormous difference in their lives and the communities in which they live.”
Currently, the UN said about 200 million migrant workers support some 800 million family members globally.
This year, and expected one-in-seven people globally will be involved in either sending or receiving more than US$450 billion in remittances, according to the report.
It says migration flows and remittances are having large-scale impacts on the global economy and political landscape.
Total migrant earnings are estimated at US$3 trillion annually, about 85 percent of which remains in the host countries, the report says.
It says the money sent home averages less than one percent of their host’s gross domestic product (GDP).
Taken together, the UN said these individual remittances account for more than three times the combined official development assistance (ODA) from all sources, and more than the total foreign direct investment to almost every low- and middle-income country.
The UN said transaction costs to send remittances currently exceed US$30 billion annually, with fees particularly high to the poorest countries and remote rural areas.
The report makes several recommendations for improving public policies and outlines proposals for partnerships with the private sector to reduce costs and create opportunities for migrants and their families to use their money more productively.
“As populations in developed countries continue to age, the demand for migrant labor is expected to keep growing in the coming years,” de Vasconcelos said. “However, remittances can help the families of migrants build a more secure future, making migration for young people more of a choice than a necessity.”