I refer to Mr. Tarron Khemraj’s letter in the Kaieteur News on June 15, 2009 titled as “the nature of a donkey-cart economy.” Mr. Khemraj alludes to remittances as unacceptable towards Guyana’s economic development.

At the end of 2006, Guyana received approximately US$225.9 million in remittances. It should be noted that remittances are regarded as the second largest source behind Foreign Direct Investments (FDIs) of external financial flows to developing countries. Remittances open new opportunities for the Caribbean, in that it can reduce the cost of borrowing on the international capital market. Remittances facilitate growth and development in the Caribbean, since the limited availability of funds has been a major obstacle to achieving this objective for decades.

Migration and development are meshed together. In the past, migration was considered as negative, but today migration is receiving immense recognition as a positive factor for the enhancement of a country’s development. Remittances play an important role as one positive outcome from migration. Banks and other financial institutions view remittances as a source of potential profits and also as a promising path to reach migrants as prospective customers. The increase in transfer fees has created prospects for cooperation between the public and private sectors in both migrant sending and receiving countries, exploiting the benefits of remittance flows for development.

Other developing countries which see remittances as important for the sustenance of their economy are Middle Eastern countries, Latin American countries, Korea, Philippines, India, Brazil, many Caribbean Islands, etc. Remittances offer an opportunity for citizens from developing countries who reside and work abroad to contribute to their home country, whether by sending money home to their families or by investing and opening small businesses.

The Indian government takes remittances quite seriously and has encouraged its non-resident Indians (NRIs) to open special NRI accounts to ensure that remittances are sent through banks to benefit the country. In India, remittances make funds available for domestic lending via the commercial banks, especially, since remittances are considered as a key resource in its emergence as a global economic powerhouse. It is projected that NRIs will grow to be the chief source of investment in India’s domestic economy, raining in and spending billions of dollars in India.

Remittances help to send children to school, gain access to health care and provide a source of income for persons desirous of making small local investments which all contribute positively to the economy.

Remittances should be considered as another economic contributor which helps to sustain economic growth and development in poor countries, and facilitates social development, and poverty reduction.
KIMBERLY JAMES