Poor Guyanese feeling squeeze from drying up of remittances

One in every ten people around the globe is directly associated with remittances. The U.S. is the largest remittance source country that witnesses outflow of $42 billion annually. Among the various regions of the world, Latin America has the largest and fastest growing remittance flow.

It received approximately 40% of remittances sent to developing countries. In fact, the remittance to Latin America exceeds the foreign investment and development aid.

The economy of Latin America depends largely on the remittances flow. The rapid increase in Latin America is gradually slowing with more Latin American immigrants adopting U.S. society and thus sending less money home.
The migrants who are earning in foreign locations remit on average 12.6 times a year. The average remit amount is in the range of US$150 to US$250 every time. These remittances are used by family, friends or relatives in the home country for their daily expenses. These remittances make up to 10% of their household income. A quarter of remitters usually send money they earned home first, prior to paying their own bills. The remittance rates have shown good growth in spite of a downfall in the U.S. economy.
The developing world was estimated to receive US$414 billion in migrant remittances in 2013, an increase of 6.3 percent over the previous year. This is projected to rise to US$540 billion by 2016.
Globally, the world’s 232 million international migrants are expected to remit earnings worth US$550 billion this year, and over US$700 billion by 2016, says the latest issue of the World Bank’s Migration and Development Brief. (Source: World Bank).
These statistics and information clearly show the important role remittances are playing in the lives of people of the Third World, particularly the poorer sections of society.
Our country, Guyana, is part of that remittances scenario as we have a large diaspora population, especially in North America, who send home a sizeable amount of cash for relatives on an annual basis.
However, it seems as if this ‘much anticipated’ source of income is now drying up significantly because there have been increasing reports, particularly regarding remittances, of the impacts resulting from the warning by the Caribbean Financial Action Task Force (CFATF) after Guyana missed the given deadline for the passage of the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) Bill.
CFATF at its plenary meeting in November 2013 warned its members to “consider implementing counter measures to their financial systems from the ongoing money laundering and terrorist financing risks” emanating from Guyana.
The latest case was published in this newspaper yesterday, where we reported on the increased burden of receiving money sent from overseas.

One Guyanese, who requested anonymity, told this newspaper that one of the local money agency had to call their United States office to have the money released, before he could get it.
“My sister had to convince them that she was sending money to her brother and before I could get the money, only US$100, there was a long process of verifying,” he told the Chronicle.
When contacted by this newspaper, the consensus from two major money transfer companies in Guyana, Western Union and Money Gram, was that additional verifications are needed, in the absence of the updated AML/CFT legislation.
A senior official from Western Union’s head office in Jamaica was unavailable for comment on the step-by-step procedure being currently used.
A supervisor with MoneyGram, Darshanie Persaud, with the Neal and Massy Services Limited (NMSL), the financial services arm of the Neal and Massy Guyana Group of Companies, however, confirmed the challenges with the new procedure.
She explained that some transfers are placed on hold until the office in the sender’s country can convey additional confirmations to allow the money’s release.
“Sometimes we need a copy of the sender’s passport or identification card and once we clear confirmation in the sender’s country we release the money,” Persaud said.
When spokespersons from the government warned about the adverse effects of the non-passage of the AML/CFT Bill, the parliamentary political Opposition dismissed it as being an exaggeration and accused the government of rattling up panic to defend their irresponsible and anti-national position of not allowing the legislation to pass to meet the required deadline.
Well the bite is now being felt and poor people will suffer. The Opposition should now tell the nation of how happy they are with respect to poor people not being able to receive remittances because they blatantly refused to support the AML/CFT Bill.
But the Guyanese people should be clear as to whether the parliamentary political Opposition is working in their interests and that of the country, or are they working towards furthering their narrow and selfish political agenda.
In the meantime, remittances from abroad are ‘drying up’.

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