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Remittances to ALC

Remittances to Latin America and the Caribbean in 2021: Migrant Efforts During the Covid-19 Crisis

July 12, 2022 por Jeremy Harris - René Maldonado Leave a Comment

The remittances received by the families of migrants in Latin America and the Caribbean constitute a major contribution to their subsistence and in many cases are a determining factor preventing families from falling below the poverty line. To deepen knowledge of remittances received in the countries of Latin America and the Caribbean, at the Interamerican Development Bank (IDB) we have initiated a process of monitoring and analysis of remittances based on data published by the central banks of the region.

The new publication of the IDB analyzes the evolution and characteristics of remittances to Latin Americana and the Caribbean in 2021. As we had anticipated in earlier blog posts, remittances flows to the region hit a new record in 2021. The reopening of the economies in remittance sending countries allowed all of the labor force, and immigrant workers in particular, to return to their activities, improving their incomes and allowing them to sustain or even expand the support in the form of remittances that they send to their families.

During 2021 Latin America and the Caribbean (LAC) received 127.6 billion dollars in remittances, which constitutes an annual growth of 26.0%, the highest registered in the past 20 years. This was nearly triple the level in 2005, with the highest growth rate in history.

Migrant efforts during the COVID-19 crisis

At the beginning of the pandemic, in the first quarter of 2020, the decline in employment and incomes of migrants suppressed their capacity to send remittances. Nonetheless, in the following months remittances regained their growth path as a result of the efforts of migrants to maintain their support.

Mexico remained the principal recipient of remittances in the region, with US$ 51.6 billion, equivalent to  40.4% of the total received in LAC. Central America received 26.3% of remittances income in the region (US$ 33.5 billion), remittances received by countries of the Caribbean represented 14.2% of the total (US$ 18.2 billion), and South America was the recipient of 19.1% (US$ 24.3 billion).

Growth in 2021 was the highest registered in this century.

Although the growth of remittances received by individual countries is heterogeneous, flows to the region as a whole have grown each year with only one interruption due to the global financial crisis in 2009. The growth in 2021 was the highest registered in the period for which statistics are available (26.0%). Remittances to Mexico increased 27.0%, to Central America 29.4%, to the Caribbean 20.2%, and to South America 23.8%.

Remittances support the economies of the region

On average, remittances to LAC were equivalent to only 2.6% of GDP in 2021. But for many of the poorer countries in the region, remittances represent much higher fractions of the economy. In Central America and the Caribbean, the averages exceed 12%, reaching 28.0% in Honduras and 24.4% in Jamaica, for example. In Mexico, despite being the main recipient country, remittances equate to only 4% of GDP, and in South America the figure is only 0.7%.

Recent migration flows in Latin America and the Caribbean have had significant effects on receiving countries, generating social pressure around migrants’ need for services in their host communities. However, migration also brings opportunities.

In Latin America remittances are an income source for families, make a major contribution to GDP, and are a tool for financial inclusion. To truly capitalize on them as a development tool they need to be measured and analyzed.

Download the publication to learn more about remittances to Latin America and the Caribbean in 2021

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Filed Under: Remittances, Uncategorized Tagged With: Employment, Latin America, migrante, migrantes, Migrants, Migration, Migration, Migrations

Jeremy Harris

Jeremy Harris ha trabajado en el BID por 20 años, desempeñándose como Economista y Especialista en Comercio del Sector de Integración y Comercio del Banco desde 2009. En el BID, ha trabajado en varios procesos de apoyo a las negociaciones comerciales de América Latina, incluyendo el CAFTA y el ALCA, con énfasis en las reglas de origen y acceso a mercados. También ha participado en el diseño y desarrollo de varias bases de datos y sistemas informáticos sobre acceso a mercados, y ha realizado estudios analíticos sobre los acuerdos comerciales y sus efectos sistémicos sobre el comercio regional y global. Fuera del BID, ha trabajado como consultor de la CEPAL, la CARICOM, el Departamento para el Desarrollo Internacional del Reino Unido (DFID) y la Agencia Alemana de Cooperación Técnica (GTZ). Tiene un PhD en Economía de la Universidad de Maryland.

René Maldonado

Es Consultor de la Unidad de Migración del BID. Durante los últimos 15 años ha dirigido programas sobre Remesas e Inclusión Financiera para países de América Latina y el Caribe. Es economista de la Universidad Católica Boliviana (UCB), con Maestría en Administración de Empresas de Maestrías para el Desarrollo de la UCB y el Harvard Institute for International Development (HIID) y Maestría en Economía de la UASB y la Universidad de Ginebra, así como con postgrado superior en Evaluación Cuantitativa de Políticas Económicas de la Universidad Andina Simón Bolívar (UASB).

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