April 1, 2005

Diaspora sending billions home

by Bevan Springer

Amsterdam News

WASHINGTON, D.C. (March 24, 2005) Latin American and Caribbean workers living abroad sent a record US$45.8 billion to their homelands in 2004, up from $38 billion the previous year, prompting the head of a development agency to call for more attention from governments to the role of Diaspora communities in sustainable development.{{more}}

President of Counterpart International, Lelei LeLaulu said, “these Diasporas are contributing directly to maintaining and strengthening the economies of their home countries, so it is only logical their voices should be heard in the homelands.”

“It also proves what we have been saying for a long long time that the Diasporas are among the most potent unused development tools around,” said LeLaulu, whose organisation has helped stage town hall meetings, with Air Jamaica, in Caribbean-American communities in the Northeastern United States. Counterpart also recently launched a project this year, which links Jordanian communities in Chicago with the city of Aqaba in Jordan for the training of Jordanian youth.

The Inter-American Development Bank’s Multilateral Investment Fund (MIF) released the remittances figures this week, explaining that last year, as in the two years before, the amount of remittances exceeded the combined totals of overseas aid and foreign direct investment received by the region. About three-quarters of the total volume of remittances to Latin America and the Caribbean come from the United States. Europe was the second largest source, while Japan continued to be a major source of flows to Brazil and Peru, as Canada was in the cases of Jamaica and Haiti.

Mexico stayed at the top, receiving about $16.6 billion last year. Brazil was runner-up with $5.6 billion, followed by Colombia in third place with $3.9 billion. Impoverished French Creole Haiti received slightly more than $1 billion from its expatriates, more than one quarter of its gross domestic product.

According to the MIF’s research, there are 25 million Latin American and

Caribbean-born adults living abroad. About two-thirds of them send money to their families on a regular basis, usually in $100 to $300 tranches.

The MIF, an autonomous fund administered by the IDB, started working in 2000 on the issue of remittances to assess their economic and social impact in Latin America and the Caribbean. Its research revealed the magnitude of these flows as well as the high transaction costs most migrants were paying to send money to their homelands.

Across the world, development economists have been working on how to ensure that those remittances are invested in productive economic development and not just in property speculation or extravagant consumption. It is an issue that the Caribbean governments should be addressing, in conjunction, of course, with their expatriate communities who are sending the money!