Washington -- A November 13-14 international
conference on remittances, to be held in London, will discuss
how these money transfers have become the world's “largest
financial flow” to developing countries.
The scheduled participants at the conference,
co-sponsored by the World Bank, include an analyst from
the FBI and a representative from the U.S. Treasury Department.
The Treasury official will discuss such issues as the promotion
of access to finance and the agency's efforts against money
laundering.
Another sponsor of the Second International
Conference on Migrant Remittances is the United Kingdom's
Department for International Development, which also helped
organize the first such event in October 2003.
The World Bank, in previewing the London
conference, said that remittances to developing countries
are expected to have reached $167 billion in 2005 (the most
recent year from which figures could be compiled) and become
the largest source of external finance for developing countries,
exceeding the amount of foreign direct investment or official
development aid that these countries receive every year.
However, the bank said that despite the
growing volume of international remittance flows, most households
in developing countries still do not have access to basic
financial services.
One of the major challenges for the international
community, according to the bank, is to "leverage the
growing volume of remittance flows to provide access to
financial services to millions of poor people and, thus,
contribute to reduce poverty and promote economic growth.
By bringing millions of poor people into the financial system,
countries can grant their citizens the opportunity to save,
build their assets, and smooth their consumption."
Other participants in the London conference
include David Landsman, executive director of the New York-based
National Money Transmitters Association, who will give a
private-sector perspective on how remittance service providers
have been affected by regulations intended to block money
laundering and the financing of terrorism.
Another conference speaker, Marilou Uy,
the World Bank's senior adviser on financial and private-sector
development, will discuss why the availability of advanced
technology still has not reduced the high fees and the considerable
amount of time it takes for migrant remittances to reach
home.
A recent World Bank study, entitled International
Migration, Remittances and the Brain Drain, concludes
that remittances can spur a developing country to increase
its spending on education, health and investment.
However, the study also found that remittances
can be a mixed blessing for the world's developing nations.
Even though remittances can reduce poverty
in developing nations, the study also found that money transfers
can lead to a massive "brain drain" in which highly
skilled citizens leave their homelands for better opportunities
abroad. The study included a detailed analysis of remittances
in Mexico, Guatemala and the Philippines -- all countries
where millions of their citizens go elsewhere for work.
(See related
article.)
IDB REPORT CONFIRMS IMPORTANCE OF REMITTANCES
TO LATIN AMERICA
The London conference is being held against
the backdrop of a new report by the Inter-American Development
Bank (IDB) that says migrant remittances from the United
States to Latin America will reach $45 billion in 2006,
up from approximately $30 billion in 2004.
The money sent by migrants from the United
States to Latin America represents about three-fourths of
the $60 billion overall the Latin American region will receive
in remittances in 2006, said the IDB.
Asked his reaction to the IDB report, as
it relates to Mexico, one of the world’s leading nations
for receiving remittances, U.S. Commerce Department official
David Bohigian said October 20 that interdependence already
exists between the United States and Mexico and “not
just from the remittance standpoint.”
Bohigian, the assistant secretary for market
access and compliance, said U.S. foreign direct investment
in Mexico has helped create hundreds of thousands of jobs
in that country “through our investments in factories
and in all sorts of places of business.”
Speaking at the U.S. State Department’s
Foreign Press Center, he said “remittances are certainly
a part of the Mexican economy,” but that the U.S.
goal over the next few years is “to ensure that the
people of Mexico have great jobs” in that country
in order to “increase their quality of living”
and to increase “their prosperity developed at home.”
(See related
article.)
The United States has said that although
the costs of sending remittances are falling, those costs
remain too high, particularly in an era of electronic transfer
of funds.
To address that problem, President Bush
and the other leaders of the Western Hemisphere, meeting
in Monterrey, Mexico, at the 2004 Special Summit of the
Americas, set a goal of cutting the cost of sending home
a remittance by 50 percent by 2008.
For more about the Monterrey summit, see
the Past
Summits page of the Summit
of the Americas collection.
Additional
information on the London remittance conference is available
on the World Bank Web site.
The full
text of the IDB report on remittances is available on
that bank’s Web site.
For more information on assistance to the
developing world, see Global
Development and Foreign Aid.
Eric Green
Washington File Staff Writer
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