Remittances from Latin American emigrants back home increased by 6 percent last year to US$61 billion, the Inter-American Development Bank, or IADB reported. While higher than the $57.6 billion sent home in 2010, it is far from the $69.2 billion registered in 2008.
According to the report, “Remittances to Latin America and the Caribbean in 2011: Regaining Growth,” released in March by the IADB’s Multilateral Investment Fund, the flow of remittances point to a recovery since the 2009 financial crisis.
“For the remittance market in Latin America and the Caribbean, 2011 was a year of renewed growth after the 2008-2010 period, despite persistent economic uncertainty in Europe,” the report said.
Still, foreign exchange rates, with some Latin American currencies strengthening, were another issue. Brazil was the only country surveyed in the region that saw a 50 percent-drop in remittances to $2 billion. On top of that, they lost 15 percent of their purchasing power in the local real.
Remittances remain a major source of income for many countries in this region, said the Fund, adding that in “several of the smaller and poorer nations, they far exceed external aid and net foreign direct investment.”
“The importance of these flows lies in the vital role they play for millions of recipient families that depend on remittances for basic needs, even in countries with higher GDP levels,” the report noted. “In the absence of this regular source of income that these families receive from their family members abroad, many would fall below the poverty line.”
But they are playing a smaller role as some economies grow, while they comprise more than 10 percent of the gross domestic product in others. In Haiti, they count for a quarter of the economy