MOST, IF NOT ALL, Barbadians have at least one relative living or working overseas. For many years – something that has continued to this day – these individuals have sent money back home to help their relatives.
In other words, they have sent remittances to assist their loved ones.
It is believed that as the economies of countries like Barbados and others in the Caribbean have contracted in recent years, remittances have become more important for some people.
On the other hand, however, as large industrial nations like the United States (US) and United Kingdom faced their own economic strife for a time, Caribbean nationals in these and other places have found it more challenging to send money back home – as they too would have found it financially challenging.
This issue was addressed in a 2010 Inter-American Development Bank report.
“The flow of remittances has been growing significantly and has become an important source of income for a large number of households in Latin America and the Caribbean.
“Data for the past couple of years are still tentative. However, during 2008, the growth rate of these flows diminished due to the weakening of the US economy, as well as to the strengthening of its immigration enforcement,” it stated.
“Even so, the flow of remittances that continues to enter the region is of particular importance. In the case of Barbados, to a certain degree, the fall in remittances from the US has been compensated for by a slight increase in remittances arriving from other regions such as the United Kingdom or elsewhere in the Caribbean.”
The bank said that generally “the importance of international remittance flows to Latin America and the Caribbean economies has increased substantially, both in terms of macro-economic stability given the magnitude of these capital inflows, and of economic development in view of their impact on financial inclusion and poverty alleviation.”
In its most recent Migration And Development Brief, the World Bank said weak economies in Europe, especially Russia, slowed the growth of remittance flows last year.
“Weaker currencies vis-a-vis the US dollar, and lower oil prices are further restricting the ability of many migrants to send money back to family and friends,” it added.
It expected remittances to developing countries to reach US$435 billion in 2015, registering a modest growth rate of two per cent from last year. This, it added, “represents a significant slowing in the growth of remittances from the rise of 3.3 per cent in 2014 and of 7.1 per cent from 2010-13”.
In terms of 2016, the World Bank said “remittances to developing countries are expected to rise by about four per cent, reaching an estimated US$453 billion, buoyed by the continuing recovery in the United States and a modest acceleration of economic activity in Europe”. Also, “global flows of remittances are expected to recover in 2016 to reach US$610 billion, and then rising to US$635 billion in 2017”.
In a 2015 study which examined how Barbadians used remittances from overseas relatives, Anthony Wood and Shari Watson highlighted the importance of remittances in Barbados and the continuing important role of such funds sent to the island.
They found that at the household level remittances received “were used mainly for consumption purposes, particularly purchasing food and paying utility bills”.
“This result is similar to the findings of many other studies on developing countries. Second, with respect to the frequency, the majority of recipients (71.8 per cent) were receiving money within short intervals (not exceeding one month),” they said. (SC)
