Manuel Orozco reports on Immigrant Remittances being down due to the Massive Recession!

Migration and Remittances in Times of Recession: Effects on Latin American Economies By Manuel Orozco May 8, 2009 View PDF Document additional ResourcesReport in Spanish Recesión global migraciones y remesas efectos sobre las economías de américa latina y el caribe Event Materials Audio of the Press Briefing Event summary In the Press Voice of America Español parts 1 and 2 SDP Noticias (Mexico) Diario Digital (Dominican Republic) Portafolio (Colombia), Último Segundo (Brazil), Invertia (Chile), Clave Ditigal (Dominican Republic), El Universal (Mexico), Diario Crítico (Mexico), El Informador (Mexico), EcoDiario (Spain), El Telégrafo (Ecuador) and Telecinco Spain) Infolatam (Spain), La Nación (Paraguay) Prensa Latina, AnsaLatina The American Prospect, Voice of America News, Charlotte Observer, Truth Out, The Intelligence Daily Program Page Remittances and Development Program This study by the Inter-American Dialogue shows that in 2009 immigrants from Latin America and the Caribbean will remit US$64 billion, down from US$69 billion in 2008. Moreover, the study shows that in 2009, as the crisis worsens, migrants will reduce their flows by as much as 7 percent due to job losses, lower earnings, and slower migration (including continued deportations). This decline is far less damaging than that expected from exports, yet not negligible. The study is based on an analysis of the impact of the economic downturn on family remittances and the subsequent effect that such an impact is expected to have on the Latin American economies. The IAD finds that in 2008, migrants relied on their savings in order to maintain a sustained rhythm in the sending of money to their families. However, in 2009 nearly one million people will not remit, only 40% of those unemployed will continue to remit, and 25% of those employed will remit 10% less than in 2008. The implications of the crisis for Latin American economies are manifold. First, about one million households who previously received remittances will not receive money in 2009, and another four million will receive 10 percent less. This means that overall, these households will lose a significant source of earnings ranging from 7 percent to 65 percent of all income. Some of the most affected countries include Haiti, Honduras, El Salvador, and Nicaragua, where the decline in money transfers will equal nearly 1 percent of each country’s GDP. Second, despite continued policy recommendations and initiatives on leveraging the flow of family remittances to expand financial access, these efforts have not been enough. However, policy changes can still be made to mitigate the negative effects of any decline in flows, such as motivating migrants to invest back home, increasing financial literacy among migrants and relatives, and offering greater financial services to remittance senders and recipients. This report looks at the impact of the economic downturn on migrants, remittances and Latin America by using primary data analysis resulting from surveys conducted by the author and other statistical sources. The analysis uses statistical and survey data from the U.S. as well as household surveys carried out in Latin American countries. Report on Remittances during the Recession by Mexicanal from Inter-American Dialogue on Vimeo. Inter-American Dialogue 1211 Connecticut Avenue, NW Suite 510 Washington, DC 20036 Phone: 202-822-9002, Fax: 202-822-9553 Copyright 2007 Inter-American Dialogue

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