IDB: Remittances sent to Latin America and the Caribbean on the upswing

Remittances sent to Latin America and the Caribbean grew less than 1 percent in 2012 but showed larger increases in countries more dependent on money sent home by migrants living in the United States, according to an Inter-American Development Bank study released Monday.

Last year, the region received $61.3 billion in remittances — the money sent by migrants to sustain family and friends in their homelands. That’s $300 million, or 0.6 percent, more than in 2011.

The tally doesn’t include countries, such as Cuba, which aren’t IDB members.

“What we’re seeing is a continued stabilization in remittances and that has been the trend for the last few years as we’ve come out of the global economic crisis,’’ said Natasha Bajuk, an IDB remittance specialist who worked on the report.

Remittances had been growing steadily, reaching a high of $65 billion in 2008, but falling by 15 percent in 2009 as the effects of the financial crisis took hold. The trend once again turned positive in 2010, but there have been very small increases for the past few years.

In contrast, most of the Andean countries, which are more dependent on remittances from Spain and other European countries, are continuing to show declines.

“Unemployment trends affect the capacity of migrants to continue sending money back home,’’ Bajuk said.

In debt-ridden Spain, unemployment reached a record 27.2 percent during the first quarter of this year and spiked to 57.2 percent among 16- to 24-year-olds.

Despite its economic problems, Spain is still the second most important source of remittances sent to the region.

Central American countries and the Dominican Republic, where the bulk of remittances come from the United States, showed increases in remittances, according to the report.

Remittances sent to Costa Rica ($579 million), Guatemala ($4.78 billion) and Nicaragua ($1.15 billion) were up more than 9 percent.

But the trend was slightly different for Mexico, which at $22.45 billion far and away receives more remittances than any other Latin American or Caribbean nation, Bajuk said.

Even though most of the remittances sent to Mexico come from the United States, remittances were down by 1.6 percent.

“What we’ve seen over the years is that the driving force for sending patterns is the need to cover necessities on the other side,’’ Bajuk said.

Last year Mexico’s exchange rate turned more positive from migrants’ perspective, meaning they could send less money and still have the same impact on their relatives’ lives.

“If you look at the amount received in terms of the value in the local currency, there would actually be a slight positive trend in remittances to Mexico,’’ Bajuk said.

Another factor affecting remittances to Mexico is that during the economic slowdown in the United States, net migration flows from Mexico have been near zero, meaning some migrants are returning home. During January, according to the report, the unemployment rate among Mexican migrants in the United States was 10.5 percent.

Haiti, which was hit by a devastating earthquake in 2010, is also a big recipient of remittances from the United States.

But the $1.99 billion that Haitians received last year actually represented a 3.4 percent decline.

In 2010, remittances to Haiti jumped by 20 percent to nearly $2 billion and were up an additional 4.4 percent in 2011.

Despite the 2012 decline, remittances were still ahead of the pre-quake record of $1.8 billion in 2008.

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