World Bank predicts significant decline in remittance flows to the Caribbean

The World Bank is predicting a significant decline in remittance flows to the Caribbean and other developing countries in 2009, according to a report on www.cananews.net.



The Washington-based financial institution said today that flows are expected to be US$304 billion in 2009, down from an estimated US$328 billion the previous year.



In releasing a new migration and remittances brief to coincide with the \"International Diaspora and Development Conference\" that began on Monday, the bank said the decline in remittances is \"far smaller than that for private flows to developing countries.\"



The bank said the new forecast for remittance flows to the Caribbean and Latin America is estimated at minus 6.9 per cent and blamed a slowdown in the US construction sector for the situation.



It said that countries such as Guyana, Moldova, Tonga and Lesotho depended heavily on remittances.



\"Remittances provide a lifeline to many poor countries. Although they remain resilient, even a small decline of seven or 10 per cent can pose significant hardships to the people and to governments, especially those facing external financing gaps,\" said Dilip Ratha, lead economist in the Development Prospects Group of the World Bank.



\"Reducing remittance fees and developing innovative tools to leverage remittances for financial inclusion and capital market access should be a part of our response to the financial crisis,\" he added.



The World Bank said remittances were relatively resilient because, \"while new migration flows have declined, the number of migrants living overseas has been relatively unaffected by the crisis.\"



\"There is a risk that rising unemployment will trigger further immigration restrictions in major destination countries,\" said Hans Timmer, Director of the World Bank\'s Development Prospects Group.



\"Such restrictions would curb remittances more than forecast and would slow the global recovery in the same way as protectionism against trade would endanger a global upturn,\" he added.



He said remittances have slowed in many corridors since the last quarter of 2008.