MIGRANT REMITTANCES: Size, Trends and Examples from Canada

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MIGRANT REMITTANCES Size, Trends and Examples
from Canada

• Barnabe Ndarishikanye
• CIDA/Policy Branch
• June 05,2004, CPS, Winnipeg

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DEFINITION, DATA, TRENDS, DETERMINANTS

• A. Definition
• Monies (, Goods) sent by migrants to their
  relatives remaining in the countries of origin
• Migrant A person who resides or whose intention
  is to reside in a country for one year and over
• Temporary Workers Seasonal/Borders workers whose
  economic centre is the country of origin.
• Data Source IMF- BOP Statistics Yearbook, World
  Bank- WDI and GDF
• Informal 20-60 of the total is not captured.

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B. Remittances are a key source of global
development finance

• billion 1995
  2002
• FDI flows 106
  135
• Other private flows 74
  -4
• Official finance 55
  35
• Workers remittances 50 88 (93 in
  2003)
• Remittances are larger than
• official flows in 58 countries
• private flows in 52 countries
• both official and private flows in 36
  countries

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C. Remittances are stable

• Capital flows to developing countries

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D. Remittances will increase because migration
will increase

• Income gap between source and destination
  countries is wide
• Dependency ratios and pension costs are rising in
  industrial countries
• Temporary, and South-South, migration to increase
• However
• Weak labor market in high-income countries
• Security concerns

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II. Examples of Countries of Central Americas and
Caribbean
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Remitting Process from Canada

• Remitting Companies
• Haiti Haiti CAM Transfert, Unitransfert, Bobby
  Express, Soca Transfert, Meli Melo ( and goods)
• Jamaica Jamaica National Building Society, Rapid
  Remittances, Canada Overseas Inc. Guyana
  Laparkan ( and goods)
• Western Union, MoneyGram
• Informal Channels

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e.g.Transactions and Amounts
 
Western Union 10 of Amount serviced from Canada
8 billion (2001) 65 Sent to Americas 5.2
billion
 
 
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The Costs of Sending Money

• Conversion rate generates additional fees Low
  or no fees
• If delivered in Gourdes
• Communication costs

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Marginal Involvement of Commercial Banks

• Bank Infrastructure are not shaped fpr Migrant
  Remittances
• Niche of the Seasonal Workers in Agriculture

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Pros/Cons Remitting Companies

• Cons
• High fees
• Exchange rate fees
• Need of regulation/Transparency
• No links with banks
• Suspicious of carrying criminal activities (post
  Sept 11th, 01)

• Pros
• Fast
• Reliable
• Flexible
• Network in both countries
• Close to communities

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III. Conclusion on Policy Issues

• Data collection on Remittances from Canada
• Regulatory framework for Remitting Business
• Developmental impacts/potentials of remittances
  Consumption Vs Investment
• Adapted infrastructure services
• Commercial Banks can play a big role
• Partnership to making remittances efficient
• G8-G7 Recommendations Reduce transactions costs
  by 50 per cent