IADB: LatAm remittances to decrease in ‘09

Remittances to Latin America and the Caribbean are likely to decline in 2009 after posting nearly a decade of growth according to an Inter-American Development Bank (IADB) report released Monday.

According to the study the growth in remittances during 2008 was only 1%, yet the decrease began late last year with slumps regionwide from Mexico to Ecuador. This could spell bad news across the region; remittances represent at least 12% of Gross Domestic Product in seven Latin American countries.

Why the expected slide in remittances? The weakening global economy and stricter U.S. immigration policy are two factors along with less favorable exchange rates between some currencies and the dollar. Yet IDB president Luis Alberto Moreno doesn’t predict a major change in migration trends:

“(Remittance) flows will be affected by length and severity of the crisis and the ability of migrant workers to weather this storm,” said Luis Alberto Moreno...

"Our take is that migrants are likely to exhaust all other options before considering a return to their countries of origin," he said. "Remittances reflect a strong commitment to family and community, and senders have shown in the past that they will do anything in their power to fulfill that obligation."

Image- Foreign Policy
Online Sources- IHT, Voice of America, WSJ.com, The Latin Americanist