Remittances to the Caribbean set to increase despite “exorbitant cost” – World Bank

The World Bank has voiced concern about what it described as the exorbitant cost of sending remittances to the Caribbean and other places, saying that forcing migrant workers to pay as much as US$50 to send US$200 is “wrong.”

The financial institution said this is especially so when workers are “sending salaries they have earned in the hope of supporting their families back home.”

“There was little price transparency and no global effort to address this problem until the World Bank helped form a coalition to monitor the process and create a ‘one-stop shop’ information system to help remittance-senders compare services and costs,” the statement said. The World Bank said the high cost of transferring remittances internationally has typically been caused by a combination of obstacles in each local market, both in sending and receiving countries. These include a lack of transparency and consumer protection, legal and regulatory obstacles, a lack of payment system infrastructures and access to payment systems, a weak market environment without a proper competition, and weak risk-management and governance practices.

Remittances to the Caribbean are expected to remain robust this year, despite increased deportations of migrant workers. Migrants from developing countries, including the Caribbean, are expected to send US$436 billion in remittances to their home countries this year.

According to the latest issue of the bank’s Migration and Development Brief, this year’s remittance flows to developing countries will increase by 7.8 percent over the 2013 volume of US$404 billion, rising to US$516 billion in 2016.

Remittances remain a key source of external resource flows for developing countries, far exceeding official development assistance and more stable than private debt and portfolio equity flows. -(CMC)