QUOTE:
‘The fact remains that remittance is a key player in poverty reduction, providing economic assistance to many people giving them opportunities they can only reverie about.’
Today, remittances now surpass development aid and foreign direct investments (FDIs) of several developing countries; but this does not mean that it is more important than the other financial sources. Instead, remittances are a complementary financial source working alongside aid and FDIs to achieve maximum growth for developing countries like Guyana. Also, another important point to note is that, remittances are motivated by altruism. When people migrate, they often feel obligated to assist their families; it is as if, they enter into some form of moral contractual arrangement.

In addition, many migrants make investments via remittances back home to retain ties with their country of origin, favourably affecting the economic performance of that country, generating employment opportunities, etc.

We must know that migration is no new concept to the Caribbean, since history tells us that many Caribbean people migrate to help families back home or migrate to grasp opportunities that are not available in the Caribbean.

There are a lot of misconceptions about the benefits remittances offer and some people are viewing remittances as a competing financial source rather than a complementary financial source. This approach is wrong, since remittances, at this time, cannot compete with foreign aid and foreign direct investments. However, remittances are now the second most important external financial source used to improve the lives of ordinary people.

The accretion of human and financial capital abroad is now seen as a doorway to economic assistance to families back home; which improves living standards, allows greater access to health and education outcomes; and in turn increases the chances to decrease migration. For this reason, remittances should be received with open arms and facilitated.

Remittances are vital in poverty reduction and provide people with the opportunity to save and make investments. Presently, the impact of the economic crisis is cushioned in developing countries because of remittances received and its contribution to savings and local investments; people are now able to sustain themselves against external and macroeconomic policy shocks.

Pablo Fajnzylber & J. Humberto Lopéz (2008) contend that workers’ remittances are a major source of financing for developing countries, and are especially important in Latin America and the Caribbean.

The importance of remittances needs to be acknowledged regardless of our personal views. It is estimated that today, remittances are six times more than foreign aid and is analogous to FDIs. Pablo Fajnzylber & J. Humberto Lopéz (2008) state that remittances accounts for 25% of Guyana’s Gross Domestic Product (GDP), in the Dominican Republic remittances are received regularly by more than 20% of households, and in Jamaica remittances add up to US$700 per person per year. Here it is evident that remittances are merely playing a developmental role alongside foreign aid and foreign direct investments in an effort to strengthen the local economy.

Policy makers within the Caribbean region must seek to formulate policies in such a way to reap the economic benefits of remittances, since it is vital at all levels, including, the individual, household, community and national levels; and it has also helped in the development of local markets and infrastructures.

The fact remains that remittance is a key player in poverty reduction, providing economic assistance to many people giving them opportunities they can only reverie about.