Wednesday 15 October 2008

ETHIOPIA: A Thankless Job, But Somebody’s Got to Do It!

It is gratifying to know that Ethiopian Americans are carrying their fair share of the load in helping the economy of their homeland. It was an eye-opening revelation to learn that Ethiopian Americans contributed a cool $1.2 billion to the Ethiopian economy this past year. That is “only second to the amount generated by Ethiopia’s exports.” Last week Elias Loha, Manager of Reserve Management and Foreign Exchange Market of Ethiopian National Bank, fretting over “a cut in vital remittances from Ethiopians in the United States” told Reuters: “We are concerned and worried that as a result of the financial crisis… some of the Ethiopians may loose their jobs and as a result they may stop sending money to help their families back home.” Could that be a backhanded way of giving us teeny-weeny credit for the much vaunted stratospheric “10 percent a year economic growth” Zenawi gasbags about? Regardless, there seems to be manifest alarm in Zenawi’s officialdom that the Ethiopian-American goose may not be laying as many golden eggs as it has been previously because of the sub-prime mortgage debacle.


The $1.2 billion figure came as a pleasant and unexpected surprise for many Ethiopians who regularly send money to their families or make remittances for other purposes. The official figure most likely underestimates the actual figure since the National Bank does not have the data collection mechanisms to accurately gauge the remittance flow in the informal channels or in the underground economy. For instance, a 2006 World Bank study suggested that if remittances sent through informal channels are included, total remittances in recipient countries could be as much as 50 per cent higher than the official record. What surprised most Ethiopian Americans aware of the staggering contribution was the fact that remittances substantially exceed the total amount of U.S. aid given to Ethiopia. Evidently, such massive infusion of money could have significant and decisive implications for Ethiopian society, but there are few systematic studies on the impact of remittances on the Ethiopian economy. We do not know if the $1.2 billion dollars we sent alleviated poverty or deepened the inequality in Ethiopia between remittance recipients and the vast majority of people who do not receive them. Did our remittances help reduce the poverty rate in Ethiopia or place an added burden on the poor by grossly distorting the local economy? Is the $1.2 billion we sent last year or the hundreds of millions in prior years in some part responsible for the current high inflation, high food and fuel costs and stratospheric housing prices? Is there evidence to show that the billion plus dollars we sent contributed to economic development in Ethiopia? Would a significant decline in remittances by Ethiopians in the U.S. have positive effects on the economy by alleviating inflationary and other pressures? What is the relationship between increased levels of remittances and the “brain drain” of highly skilled workers from Ethiopia? Do our remittances provide economic buoyancy to help keep afloat the doomed ship of a ruthless dictatorship? We just don’t have the empirical data to answer these questions. [Read more]

MICROCAPITAL STORY: Remittances and Microfinance in 2008

Remittances, the portion of international migrant workers’ earnings sent back from the country of employment to the country of origin, play an important role in the economies of many developing countries. An annual statistical report done by the World Bank shows that remittances account for 5% of the GDP for low-income developing countries as of 2006. Although this figure might seem small, many countries in particular have a much higher percentage of their GDP based in Remittances; Guyana, Haiti and Honduras are all close to 25%. The Philippines, Nicaragua, Nepal, Guatemala and El Salvador are all in the 10-20% range.

Jack Kimball of Reuters points out that “remittance cash may be as much as 50 percent higher than current estimates due to informal transfers.” Global remittances from foreign workers make up an estimated $300 billion a year, three times as much as the foreign aid paid out by governments in the developed world. The biggest share of this, over $42 billion, comes from immigrants working in the United States. But what these numbers really reflect is that millions of families and individuals in these countries have come to depend on remittances as a vital source of income.
[Read more]

Pakistan: Remittances soar over 25pc to $1.88b

KARACHI - Remittances sent home by overseas Pakistanis continued to show a rising trend as an amount of $1,879.86 million was received in the first quarter (July-September, 2008) of the current fiscal year 2008-09, showing an increase of $378.61 million or 25.22 percent over the same period of the last fiscal year. The amount of $1,879.86 million includes $0.11 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

During last month (September, 2008), Pakistani workers remitted a record amount of $660.35 million, up $144.3 million or 27.96% when compared with an amount of $516.05 million sent home in September 2007. [Read more]

Philippines: Remittances to grow 15% BSP forecasts P16.6B coursed through banks

Remittances from overseas Filipino workers (OFWs) are expected to post a moderate growth in 2008 despite a global economic slowdown, according to the Bangko Sentral ng Pilipinas.

Nestor Espenilla Jr., the central bank’s deputy governor, said Tuesday the remittances coursed through banks are expected to grow by 15 percent this year to $16.6 billion.

This forecast is higher than the 11-percent growth amounting to $16 billion that was expected for 2008.

But it is lower than the 18.2-percent rise, or $9.6 billion, recorded as of end-July 2008. [Read more]

Sunday 5 October 2008

New Zealand: Law change paves way for lower remittance costs

Monday, 22 September 2008, 11:23 am
Press Release: New Zealand Government

Rt Hon Helen Clark
Prime Minister of New Zealand
Hon Winnie Laban
Minister of Pacific Island Affairs

22 September 2008 Media Statement

Law change paves way for lower remittance costs


The Labour-led Government has taken a significant step towards reducing the cost of remitting money from New Zealand to Pacific countries.

Prime Minister Helen Clark and Pacific Island Affairs Minister Luamanuvao Winnie Laban today announced Cabinet’s approval of a new regulation under the Financial Transactions Reporting Act to reduce the high costs of sending money between New Zealand and the Pacific. [Read more]

Bangladesh: Remittance fetches $2.05b in first quarter

The country fetched total $2054.64 million as remittance during the first quarter of the current fiscal (July to September 2008).

The wage earners' remittance during September this year totaled to $512 million, while it was $721.92 million during August month and $820.71 million in July this year, according to a recent statistics of the Bangladesh Bank.

The remittance sent during September last year was $590.67 million, while it was $470.95 million in August 2007 and $567.11 million in July. The inward wage earners' remittance sent through Nationalised Commercial Banks during September 2008 amounted to $167.09 million, while it was $331.89 million through Private Commercial Banks and $8.52 million through foreign commercial banks. [Read more]

Migrants and investors’ remittances to Algeria worth 3 billion dollars : World Bank

The volume of remittances by Algerian migrants residing in many countires of the world especially European ones reached 2.9 billion dollars during the first six months of this year, the World Bank said.

In a study recently prepared, the World Bank noted that there is a big rise in the volume of Algerian migrants’ remittances compared to the last year.

Remittences also included a number of investors who made significant financial transfers within investment projects. The value of these remittances were determined through those made by migrants across various ports and airports, in addition to transfers that take place through financial institutions, including “ Western Union”.

For the first time, according to the world bank, these transfers have known a huge rise in Algeria compared to the last years. They did not excceed one billion $ annually unlike neibouring countries such as Tunisia and Morocco.
[Read more]

Morocco: Remittances Burgeoning

xpatriate remittances to Morocco increased again in the first six months of this year, bolstering incomes in the kingdom and bringing welcome direct investment to a range of sectors. Remittances to the kingdom from Moroccans resident abroad (MREs, in the French acronym) totalled $3.5bn in the first half of 2008, up 5% on the same period last year, according to the Office des Changes (SADOC), Morocco's exchange rate monitoring body.

Morocco receives more remittances than any other country in the Middle East and North Africa (MENA) region after Egypt. According to the World Bank, last year the country drew in $5.7bn in remittances, which have averaged $2.6bn annually since 2003. Some 3.3m Moroccans live abroad, nearly three times as many as 15 years ago. While recent years have seen a geographical broadening of the Moroccan diaspora, 80% live in the EU, with an estimated 1.6m Moroccans in France and 700,000 in Spain, the two biggest sources of remittances. Around half of the emigrants are female, reflecting the fact that increasing numbers of single women emigrate. [Read more]

Economic downturns, inflation hit remittances to Latin America

IDB fund forecasts money transfers made by migrants will decrease in real terms

For the first time this decade, remittances to Latin America and the Caribbean are expected to decrease in value due to the combined effects of economic downturns in the United States and Spain, inflation and a weaker dollar.

According to an analysis of recent remittance data by the Inter-American Development Bank’s Multilateral Investment Fund (MIF), migrants from Latin America and the Caribbean will send some $67.5 billion to their homelands in 2008, against $66.5 billion in 2007.

However, adjusted for inflation, this year’s total will be worth 1.7% less than the total sent in 2007, marking the first decrease in the value of remittances to Latin America and the Caribbean since the MIF started tracking these flows in the year 2000. Until last year, remittances to the region had grown by double digits every year.
[Read more]

Dollar appreciation boosts remittances

By Pratap John

THE appreciation of the dollar-pegged riyal against currencies including Indian rupee and Philippine peso has boosted remittances by expatriates and business at the local exchange houses.

Exchange houses contacted by Gulf Times yesterday said their business had grown by about 40% last month mainly due to weakening against the dollar of Indian rupee and Philippine peso among other Asian currencies.

The exchange firms have also seen higher volumes of business last month in view of Eid-related remittances. Many establishments in the country began disbursing salaries from September 20 on account of Eid al-Fitr.

Indians and Filipinos are among the largest blocks of expatriates living in Qatar.
“Clearly, they are trying to make the best use of a rallying dollar to which the riyal is pegged. They get more now in terms of exchange rates because of the weak currencies back home,” said the general manager of an exchange house. [Read more]

Global financial crisis…Remittances to Guyana decline

ctober 3, 2008 | By knews | Filed Under News

Money transfer entities in Guyana are monitoring the financial crisis in the United States to see how it will affect their business, and at least one firm appears to be feeling the pinch already.
An official at one of the country’s major money transfer entities told Kaieteur News yesterday that the firm has experienced a slight drop in remittances from the US since June.

The official said that the reduction was “less than one percent.”
“Since June we noticed a fluctuation, although last month’s figures were better than those in September 2007.
But maybe by November-December it (the crisis) might start to trickle down (to Guyana).

“We are watching the situation. We know that we are going to be affected. We recognize that next year might not be so good a year for us, but we are trying to maintain our market share.”
Western Union, Money Gram, Laparkan Financial Services Limited, and the recently-established Senvia (Interlink) are the major money transfer entities operating here.
[Read more]

Remittances Grow Along With International Migration

by Eric Zuehlke

(October 2008) It is a familiar story to millions worldwide: Strained by economic hardship, a mother or father is forced leave their community and migrate to another country for work opportunities. Soon, money is sent back home to support family and friends. The number of cross-border migrants and the amount of cash flows across borders to support home communities continue to grow every year. Remittances, as these flows of money are known, are among the fastest-growing international financial flows.
[Read more]