If families in Barbados see the sums of money being remitted from relatives in North America and Britain returning to the halcyon days of the early 21st century, they shouldn’t be caught off-guard.
That’s because remittances to the Caribbean and Latin American have returned to the levels that existed before the global recession, the worst since the Great Depression, which sent unemployment sky-high and lowered people’s confidence in the future.
That’s according to the Inter-American Dialogue which has just released a study on remittances to the Caribbean and Latin America. According to the expert, Manuel Orozco, who conducted the study and wrote the report, remittances recorded an eight per cent increase last year when compared with the amounts sent back to the region in 2010 and that rate is expected to continue for the next five years.
But there is a note of caution: remittances to the island-nations, coastal states and other countries in the sub-region can tumble again depending on the performance of the United States economy.
The report explained that after tumbling by almost US$8 billion in 2009, remittances grew by eight per cent from 2010 to last year, “returning to pre-recession, 2007 levels”.
It’s a welcome telltale sign that emigrants, never short of a desire to extend a helping hand to families in need back home, now have the financial wherewithal to act on their impulses.
Take the case of Jamaica, for years the leading recipient of remittances within CARICOM. In 2007 remittances hit a record level and surpassed earnings from tourism – Jamaicans sent back US$1.94 billion.
By the next year the amount of money rose to US$2 billion, only to tumble by more than $100 million, falling to US$1.792 billion in 2009 when the wheels began to fall off the United States and global economies, causing joblessness to hit a high.
But as the American economy began to stir from its deep recessionary slumber and unemployment declined marginally in 2010, the sums sent home broke the US$2 billion barrier once again.
The Dominican Republic had a similar experience. Five years ago, 2007 to be exact, remittances amounted to US$3.033 billion, inching forward to US$3.1 billion in 2008. They returned to US$3.034 billion the next year but declined to US$2.994 billion in 2010. By last year, they had surpassed the flows of 2007, going to US$3.1 billion.
That’s why you shouldn’t be caught off guard in 2012 if the bar is raised even higher as more and more emigrants in the United States find jobs and other important remittance-related changes in the financial services sector.
How come this favourable trend?
The Inter-American Dialogue lists some key reasons which run the gamut from increased employment opportunities for emigrants in the United States; new ways to send money back home; more and more highly trained and tertiary-level educated women joining the emigrant population; and the impact of natural disasters, such as the devastating earthquake which struck Haiti in 2010.
The Haitian diaspora in the United States responded by remitting more money to help rebuild the shattered daily existence of millions of needy families. The Inter-American Development Bank estimated they sent back close to US$2 billion.
But there are other positive factors at work. One of them is the growth of the contemporary trans-national family, spawned by labour mobility that links mothers, fathers, children and other close relatives in ways that were never seen before. Next is the increasing use of technology to remit money at a faster pace.
Online transfers via online bank accounts enable parents and others to remit larger amounts than those who use cash-to-cash transfers. In almost every household in the Caribbean there is a mobile telephone and mobile banking, says Manuel Orozco, an expert on remittances.
“It provides another channel to send remittances, thus contributing to increases.”
As English, French-, Spanish- and Dutch-speaking countries in our region struggle to lift their economies, immigrants have become the backbone of economic sustainability.
In August, the Freundel Stuart administration will welcome hundreds of members of the Diaspora in North America and Britain to Barbados at a network conference and emphasize the important role of Bajans living abroad.