Tuesday, March 11, 2008

IDB notes drop in remittances during 2007

SOURCE: Earthtimes—“Growth of remittances to Latin America slowed in 2007”

The Inter-American Development Bank (IDB) today released a report noting that while remittances sent to Latin America continue to increase, 2007 saw the smallest growth—only a 7% increase—over the prior year. In the past, increases in remittances has posted in double digits.

“Remittance” is the term used to indicate monies sent to friends and family in the usually impoverished home countries of ex-patriots working abroad, usually in wealthier countries. Many developing countries have come to rely on remittances as a vital part of the national economy. There is continuing debate over whether such a trend is desirable or not.

Some nations, such as Brazil and Mexico, actually saw a decrease in the receipt of remittances overall. The IDB report asserts that in Brazil’s case, the decrease is a positive result of the strengthening of the Brazilian economy. There are more jobs and more opportunities and Brazilians are returning home to take advantage of it.

On the other hand, the report states that the decrease is a negative indication for Mexico, where the economy has not improved significantly. The IDB links the decrease to the economic downturn in the United States as well as the increasingly hostile political climate with respect to immigration.


Take a look at UICIFD’s E-Book section on Remittances and Development. What do you think about this issue?

1 comment:

Remitter said...

The drop in the remittances is a global phenomenon and has to do with the fact that it is getting increasingly difficult for the immigrants to support their families because of the falling dollar. Philippines too has seen a sharp decline in the remittances which support its economy. I personally feel the state of the construction business in the US is one of the main reasons behind this trend. Experts too believe that the trend would continue and more immigrants would stop remitting money in the coming months. It would thus get interesting to see how things turn out eventually.