IDB forecasts decline in remittances to Caribbean

Caribbean families, who depend heavily on inflows of money sent home by migrants, stand to be adversely affected by a drop in remittances this year.



After almost a decade of growth, the Inter American Development Bank (IDB) is projecting that remittances, which are also a key source of income for millions in Latin America, will fall below last year’s total of US$69.2 billion for the Latin America and Caribbean region.



“While it is too early to project by how much remittances may decline in 2009, this is bad news for millions of people in our region who depend on these flows to make ends meet,” said IDB President Luis Alberto Moreno.



.“The issue has become more complex, as more factors have come into play. The world is facing its worst economic crisis in recent memory. Unemployment is rising in industrialised nations. The climate against immigration is becoming harsher. Even exchange rate fluctuations are playing a larger role than before,” Moreno noted here on Monday.



The decline in remittances is likely to translate into greater demand on social safety networks by families who rely on money flows from abroad to cover basic expenses. The IDB has been advising borrowing member countries since before the crisis exploded on strengthening their social programmes.



After many years of persistent growth, remittances to Latin America and the Caribbean came under pressure in 2008 as major source countries, including the United States, Spain and Japan, fell into recessions. The crisis has especially hit industries that employ foreign workers, such as construction, manufacturing, hotels and restaurants, the IDB said.