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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Slagle who wrote (15473)	3/17/2007 3:00:22 PM
From: elmatador	Respond to of 217974

China puts in on one side US migrant workers send home $62.3bn in the other. China puts one side US migrant workers send home $62.3bn By Richard Lapper in São Paulo Published: March 15 2007 21:29 \| Last updated: March 15 2007 21:29 Migrant workers sent back more than $62.3bn to their families in Latin America and the Caribbean last year, a rise of 14 per cent on 2005. The figures, to be released this weekend at the annual conference of the Inter-American Development Bank, confirm that remittances have become one of the region’s most important sources of foreign exchange. For the fourth successive year they will exceed the combined flows of foreign direct investment and overseas aid into the region. Mexico (with a total of $23bn), Brazil ($7bn) and Colombia ($4bn) receive most remittances, but the flows are especially beneficial for the poorer and more marginal countries of Central America and the Caribbean, where they account for more than 10 per cent of GDP in many cases. Don Terry, head of the Multilateral Investment Fund, the IDB agency that monitors the flows, argues that as 8m-10m families “would be below the poverty line” without the remittances. However, a clampdown by US migration officials on illegal immigrants could be contributing to a sharp slowdown in growth, Mr Terry claimed. In Mexico, for example, remittances grew 25 per cent in the first quarter of 2006 but by only 5 per cent in the last three months of the year and by only 1 per cent in December. During that month immigration authorities conducted highly publicised raids on factories, such as meat-packing plants operated by Swift & Co, suspected of employing illegal immigrants. Fearful of showing up at money transfer agencies or banks, immigrants could be choosing to send money back through family members and friends. Historically, remitted earnings have typically been sent back by such informal – and less efficient – channels. But the IDB, along with governments and multilateral agencies, have been keen to push these savings through banks and money transfer agencies, partly in order to increase the chances that they can be channelled into small businesses and other investments. Mr Terry said he was concerned that this trend may reverse: “More money is being carried by hand again. We are going back to the future.” This could undercut efforts to channel more money towards investment. The IDB estimates that between 20 and 25 per cent of remittances are available for uses other than consumption and has been trying to encourage banks to offer migrants and their families products such as small loans, life and health insurance, and home mortgages. Lobbying by the IDB and other governmental and multilateral sources in another area of the market has yielded some fruit. Financial institutions have agreed to reduce the cost of sending remittances in recent years, although they have been assisted by increasing competition in the sector. Commission fees charged by transfer agencies and banks have fallen from an average of 15 per cent to a little more than 5 per cent in the last six years. About three-quarters of the remittances sent to Latin America originate in the US, with Western Europe, especially Spain, Italy, Portugal, and the United Kingdom, accounting for about 15 per cent of the market. Other large flows come from Japan to Brazil and Peru; and from Canada to Jamaica and Haiti. Copyright The Financial Times Limited 2007