Forum on Remittances in Latin America and the Caribbean

The region of Latin America and the Caribbean is one of the most important receivers of remittances in the world. In 2014, such inflows surpassed 65 billion US dollars and this figure is expected to increase in 2015. In some countries of the region, the inflow of resources from remittances exceeds other income items in the external accounts, such as tourism, foreign direct investment and merchandise exports. There are also countries in the region where remittances reach a high percentage, even higher than ten percent, measured as a proportion of GDP. In fact, there are cases like that of Mexico, where they represent a small percentage of GDP, but account for a high proportion of local GDP in some states of the country, providing significant benefits to the thousands of families receiving them.

The subject of remittances is important for Latin American and Caribbean central banks given that practically all of them produce their countries' balance of payments statistics and therefore they also prepare the remittance inflows item, as well as, where applicable, remittance outflows. Remittances have a considerable impact on large segments of the population in many countries and, in some cases, on the macroeconomic accounts. As a consequence, remittances represent an important variable for the economic analysis carried out by the region's central banks.

The substantial flow of remittances to the region has favored development of a remittances industry for intermediating such resources. A very wide range of institutions and enterprises participate in said industry and competition in the market has increased significantly, bringing considerable benefits for remittance senders and receivers. In fact, information from the World Bank indicates that Latin America and the Caribbean together with South Asia are the two remittance receiving regions with the lowest costs for such transfers.

In recognition of the importance of remittances for economies of the region, the Center for Latin American Monetary Studies (CEMLA) has paid particular attention to the topic over the last few years. This has included a very wide range of activities that mostly came under the framework of  two remittances programs it implemented: Improving Central Bank Reporting and Procedures on Remittances, and the Application of General Principles for Latin American and Caribbean Remittance Markets. Both programs received financial support from the Multilateral Investment Fund (MIF), an IDB agency, while the latter also had technical assistance from the World Bank. 

The positive performance of these two remittance programs implemented jointly by CEMLA and MIF led to the agreement and approval, in April 2015, of a new program focused in remittances and financial inclusion carried out by the two organizations.

The considerations above demonstrate how it is of utmost importance for central banks of the region to enhance their knowledge of different aspects of remittances and migrants from the region residing abroad, as well as the impact of such resources on economies, particularly, as regards financial system development and greater financial inclusion of remittance senders and receivers. Thus, in October 2014, CEMLA, with the approval of its Board of Governors, set up the Latin America and Caribbean Forum on Remittances or Remittances Forum, in response to the needs of the region's central banks for obtaining more in depth knowledge of the many aspects (multifaceted nature) of remittance topics.

The main objectives of the Remittances Forum are to support central banks and other authorities in countries of the region concerned with the topic to:

  1. Make progress in the comprehensive analysis of the impact remittances have on the economy, particularly regarding their contribution to countries' economic development and to their financial sector;
  2. Identify the policy measures that should be implemented to increase the positive impact of remittances on the economy and on senders and recievers of such resources.

These objectives will be achieved, among others, through:

  • Providing technical assistance 

  • Elaborating diagnostics, analysis and studies 

  • Disseminating information 

  • Organizing workshops, conferences, seminars and other training activities 

  • Technical meetings

 

In general, the Remittances Forum will perform the following activities:

  • Provide technical assistance aimed at improving remittance measurement, in terms of coverage and quality, including, where applicable, estimating the informal market component. Technical assistance will also include applying internationally recognized methodological standards for recording such transfers from abroad.

  • Elaborate country diagnostics on the functioning of the remittance market in countries of the region with regard to their efficiency, competitiveness, transparency and, accessibility and consumer protection of such services. Said diagnostics could also include the market's legal and regulatory framework.

  • Identify for countries of the region the degree of bankarization of remittance senders and receivers, as well as the measures that should be implemented for increasing the financial inclusion of participants in said market, including the development of products linking remittances with saving, credit and investment.

  • Develop and maintain databases on the prices of sending and paying remittances to Latin American and Caribbean countries that include the characteristics of said services, such as sending method, speed, exchange rate margin, disbursement currency, points of payment, etc.  

  • Deepen knowledge about remittance receivers in countries of the region regarding the characteristics of such households in terms of their composition, level of expenditure, degree of financial inclusion, and destination of resources received as remittances, including those destined to business activities and investment expenditure.

  • Enhance knowledge about the profile of migrants from the region in their destination country, identifying their characteristics with regard to their number, gender, education, the sector of activity where they work, migratory status, wages, etc.

  • Carry out conjunctural analysis on the evolution of employment and wages among migrants from the region in destination countries and their implications for sending remittances. In addition, provide technical assistance to countries of the region for monitoring said variables.

  • Based on requests from the countries' authorities, provide technical assistance missions that allow for evaluating, generating recommendations and implementing measures and regulation changes that encourage the development of financial instruments and services that increase financial inclusion among beneficiaries of remittances.

  • Prepare studies and research papers on the different aspects of remittances, including their impact on national and regional economies, on the education and health of households receiving them, and on the propensity to work, besides those referring to gender.

  • Disseminate information and the results of research work on remittances, publishing periodic reports on such topics.

  • Organize workshops, conferences/seminars where exchanges of ideas and experiences on the different aspects of the remittances topic can take place.

 

Officials from CEMLA, central banks of the region and other CEMLA collaborators will participate in the Remittances Forum of Latin America and the Caribbean along with central banks from other regions, and international financial institutions and multilateral organizations whose activities include devoting attention to the topic of remittances.  The main functions of those participating in the Forum's activities are as follows:

  1. Proposing actions and topics of interest to be considered and developed by the Forum;
  2. Maintaining ongoing communication with other Forum members for implementing and monitoring work tasks.

The functions of the Latin America and Caribbean Forum on Remittances will be performed by CEMLA through a Coordinator. The latter will be appointed by said institution and their main aim will be to provide continuity and sustainability to the Forum, as well as supporting any working groups that might arise during the performance of the activities.

Since some years ago, CEMLA publishes a variety of papers on remittances, given its importance to a great number of Latin American and Caribbean countries, as well as its positive impact in millions of recipient households. 

The list of the abovementioned papers is below. It contains both academic papers and dissemination notes. Also, the papers produced by remittance programs performed by CEMLA are included: Program for Improving Central Bank Reporting and Procedures on Remittances and Program for the Application of the General Principles for International Remittance Services in Latin American and the Caribbean, as well as for the current Program on Remittances and Financial Inclusion. 

Publications are on PDF format, most of them in Spanish, but some also in English. 

 

Notas de Remesas

Notas de Remesas is a series created by the Forum of Remittances as a mechanism to spread information and analysis about some relevant aspects of remittances and migration, in the format of brief notes. This series is numbered and non-periodical, since its publication will respond to the availability of data that contributes to achievement of the goals of the Forum of Remittances.

 

Occasional Papers
(PUBLISHED UNTIL 2012)

This series includes non-periodical and numbered papers in Spanish. The papers in this series are descriptive and analytical about economic and non-economic issues of interest related to remittances, in particular to Latin America and the Caribbean. They are written by researchers from CEMLA as well as some guest researchers. The emphasis of the papers is on recent developments and prospects of the topics being analyzed. The development of the topics may include comparative studies between countries in the region or case studies, among others. The selection of documents published in this series is internal. Before publication, the documents are subject to editorial review. The distribution is free through the CEMLA's website.