Remittances from emigrants from the United States to Latin America and the Caribbean in 2016 amounted to almost 70 billion dollars, with an increasing use of online shipments and bank accounts and a significant reduction of transfer costs.
“The volume of remittances is enormous, 70 billion dollars, more of the total trade between the US and Brazil, and remittances only go in one direction,” said Peter Hakim, president of the Inter-American Dialogue study center, at a conference to comment these dates.
According to the study, which analyzed changes in financial behavior, 72% of migrants report sending regular remittances, and do so 14 times a year for an average of $ 250.
A key trend in the last decade is the reduction in remittance costs, which in some cases have fallen by almost half, which has facilitated transactions and expedited shipments.
On average, according to the report, migrants pay around 4% of the total shipment to their families in Latin America and the Caribbean.
As usual, Mexico is the first recipient of foreign exchange, with 27,000 million dollars, followed by Guatemala with 7.1 billion and the Dominican Republic, with 5.3 billion dollars.
By specific weight, as a percentage of gross domestic product (GDP), the most dependent countries are: Haiti, 25%; Honduras, 18%; Jamaica, 16.6%; El Salvador, 16.6%; And 10.3% of Guatemala.
In some cases, said Manuel Orozco, coordinator of the study, remittances constitute 50% of the monthly income of receiving households, so this money is essential to support families.
Overall, the flow has remained more or less stable in recent years, but it is clear growing reliance on shipments via the internet and cell phone, added Manuel Orozco.
If in 2006, only 0.4% of the shipments were made through the internet, the figure is now 5.5%; Although it maintains an overwhelming majority that it does through cash transfer services.
Despite the rise, it is significantly lower than countries in the Asian region, such as India or Philippines, where the percentage of electronic shipments exceeds 80%.
At the same time, the level of financial inclusion of Latin American emigrants in the United States has grown significantly, as in 2005, 30% reported having a bank account, while in 2016 this figure had increased to 69%.
On the effects of President Donald Trump’s arrival in the White House, who has implemented various measures to curb border control and illegal migration, researchers point out that sending money is more conditioned by fluctuations in the exchange rate .
As an example, Daniel Ayala, vice president of Global Remittances Services at Wells Fargo, said shipments to Mexico had skyrocketed with the strong appreciation of the dollar against the peso, which was quoted at 22 pesos per dollar in early 2017, At 17 pesos per dollar at the beginning of 2016.
“Now that it has stabilized around 18, shipments have also stabilized,” Ayala said.
Although in recent months Trump has downgraded his anti-immigrant rhetoric and has ruled out the use of a remittance tax or the imposition of a border adjustment tax, the concern remains clear among immigrants.
A total of 23 million households across the subcontinent receive remittances, but the majority, 16.6 million, come from the United States alone.