During 2011, income from remittances in the Latin American and Caribbean region showed a significant recovery, reaching annual growth rates close to those recorded before the start of the global economic crisis. Since the last quarter of 2008, increases in unemployment rates in traditional sending countries, such as the United States, Spain and Japan, and the consequent reduction in the income of Latin American migrants have caused an unprecedented decrease in the volume of immigrants. remittances sent to the region. As of 2010, a stabilization of these flows and a trend towards positive growth was observed, until reaching a volume of remittances that year that was slightly higher than that received the previous year. In 2011, the countries of Latin America and the Caribbean received a total value of remittances of $US 61,013 million,
(Graph 1: Remittances to Latin America and the Caribbean (2002-2011))
From 2002-2008, the annual growth rate of remittance flows received by the countries of Latin America and the Caribbean reached an average of 17%. However, as of 2006, the growth rate began to slow down, and in mid-2008, with the impact of the economic crisis, the flow of remittances registered negative growth rates, reaching an annual variation of more than -15 % in the last quarters of 2009. Due to the importance that these flows represent for their families, migrants adjusted their expenses and the management of their resources to maintain the volume of remittances that they would send during the last months of 2009, despite the uncertainty economic2. The positive trend was accentuated throughout 2010, and positive annual variations were recorded during the last quarters of that year.
The quarterly values reached by these flows in 2011 are similar to those observed in 2006, as shown in Graph 2. The interannual growth rates of 6.1% and 6.6% in the first and second quarters of 2011 They were followed by an increase of 6.8% in the third quarter, which represented the highest quarterly rate in the last four years. However, the corresponding annual increase eased to 4.4% during the last quarter of the year, which suggests that, although the recovery process continues, it could be affected by adverse factors, such as those derived from the economic problems that still afflict the European continent.
Regarding the average amount per remittance and the average frequency of sending these flows, both increased in 2011 compared to previous years. During 2009 and 2010, migrants
(Graph 2: Remittances to Latin America and the Caribbean (2006-2011))
Latin American investors had had difficulty keeping up with the rate of remittances of previous years. According to official data and surveys carried out, migrants had to reduce the number of times in the year that they send remittances to their countries of origin, going from an average of 15.3 shipments in 2008 to only 12 shipments in 2009 and 2010. In addition, the average remittance amount had decreased in 2009 by around -8% to -9% and fell again slightly in 2010 by around -0.1% to -0.6%3. In contrast, the information for several receiving countries shows that in 2011 the increase in the volume of remittances sent reflected both an increase in the amount of the average remittance and in the number of times a year that migrants sent money to their relatives. For example, in the case of Mexico,
Between 2008 and 2010, variations were observed in the flows of differentiated remittances depending on the subregion, due in large part to the economic crisis experienced by the traditional sending countries. The start time, duration and intensity of the economic crisis was different, for example, in the United States compared to European countries, and as a consequence, remittance flows from these countries were affected differently. However, in the first months of 2011, remittance flows recovered across the board in all subregions, as shown in Figure 3.
In Mexico, the income from remittances in 2011 maintained a close link with the economic evolution of the United States, the country from which practically all of these resources come. Thus, after their strong decline in 2009 (-16%) caused by the crisis in the United States, these fls began their recovery in 2010, reaching a slight growth of 0.12% that year. During 2011, more robust growth rates of 5.5% and 4.1% respectively were observed in the first two quarters, a positive trend that intensified in the last two quarters reaching growth rates of 10.3% and 7 .6%, respectively, compared to the same periods of the previous year. In annual terms, income from remittances in Mexico registered a growth of 6.9% in 2011 compared to the amount received the previous year.
(Graph 3: Trend of remittances to Latin America and the Caribbean (2006-2011)
In the case of Central American countries, the fl of remittances began its recovery earlier, growing 5.2% at the end of 2010 compared to the previous year. Throughout 2011, the growth trend strengthened, so much so that in annual terms, a growth of 7.0% was observed compared to the fl of 2010.
On the other hand, in 2010 the income of the Caribbean from remittances showed an increase of 8.3%, attributed in large part to the extraordinary remittances received by Haiti in response to the earthquake in that country. During the first quarter of 2011, this subregion achieved an annual growth of 2.5%, which accelerated even more during the following quarters, reaching growth of 10.2% and 5.9% during the second and third quarters. respectively, which was maintained during the last quarter with a rate of 5.3%. In accumulated terms during the year, the growth rate in relation to the previous year reached a value of 5.9%, similar to the average of the Latin American region.
After a significant drop in remittances received in 2010 compared to the previous year, the fl of remittances to South American countries recovered rapidly during the first three quarters of 2011, reaching year-on-year growth rates of 7.5% in the first and second quarter, and 4.8% in the third. However, in the last quarter of that year this annual rate fell, reaching -2.6%, reflecting a new reduction in remittances from European countries, where a significant part of these flows come from, and the decrease progress of remittances to Brazil. In annual terms, in 2011 the growth of remittances received by the South American subregion was 4.0%, the lowest rate observed in the Latin American and Caribbean region.
n As has been observed in previous years, within the South American region, trends in remittance flows to the Andean countries show a common and specific dynamic, which is why they deserve to be analyzed separately. In the Andean countries as a whole, a drop of -3.4% in 2010 had been observed in the remittances received by these countries, as a reflection of the fact that a significant proportion of the flows come from European countries, whose economies have shown a process of more erratic recovery. In this sense, although in the first half of 2011 quarterly growth rates of 9% and 8.9% were registered with respect to the same period of the previous year, for the second half of the year a strong deceleration was observed with year-on-year growth rates of only 4.4% during the third quarter,
(Graph 4: Remittances to Latin America and the Caribbean (2007-2011))
turned negative for the last quarter at a rate of -2.1%. In annual terms, the growth of this subregion was 4.8% during 2011 compared to the previous year.
n In the case of Brazil, according to updated data based on a strict definition of the concept of remittances, including only money transfers made by people who change their residence and send money to their country of origin from abroad, During 2011 these flows had a decrease of -4.9% with respect to the previous year. This reduction is linked to the return of many Brazilian migrants to their country of origin (Box 1).
Box 1: Different flows through the same channels
An important part of the work of measuring remittances consists in distinguishing the concept from other transfers of money that people make from abroad to their countries of origin. Banks and money transfer companies carry out various types of cross-border transactions that, when accounting for them in the balance of payments, must be categorized into three different items according to what is recommended in the Balance of Payments Manual of the Monetary Fund International: (i) remittances, (ii) employment compensation and (iii) migrant transfers. The accuracy of the information accounted for depends largely on the degree of information that the market provides to the authorities, through the implementation of surveys or other reporting mechanisms.
Remittances are money transfers made by people who change their residence, that is, they go to live in another country, generally for a period of more than a year, and send money to their country from there. In contrast, employment compensation refers to transfers made by those who do not change their residence, but only work temporarily in another country. On the other hand, the category of migrant transfers corresponds to the capital flows that migrants send to their own accounts in the country of origin, usually due to a change of residence upon returning to their country.
As an example, if these three categories of fl to Brazil were not differentiated, the total balance of transfers from abroad related to migration would show an increase during 2011 of 15.2%, reaching US$ 4,609 million. But this amount, although it represents the total amount of money sent by Brazilians abroad, groups transfers of a different nature that, by not distinguishing them, could lead to erroneous conclusions about the growing behavior of remittances that this country received and will receive during the coming years. next years. The increase in the total amount suggests a growing trend, while the disaggregated data indicates a contrasting picture. According to the strict definition of the concept, workers’ remittances received during 2011 reached US$ 1,974 million, an amount that represents -4.9% less than the previous year, and migrant transfers in 2011 reached US$ 2,052 million, exceeding the volume of remittances for the first time. The total amount of migrant transfers represents a growth rate of 51% compared to the previous year, which suggests that a significant proportion of Brazilian migrants are returning to their country, reducing the total number of Brazilians residing abroad. This could have the consequence that, in turn, the total fl of remittances to Brazil in future years continues to decline, and that, once the return of migrants decreases, the amounts recorded as migrant transfers also decrease. , thus further decreasing the total fl related to Brazilian migration. surpassing for the first time the volume of remittances. The total amount of migrant transfers represents a growth rate of 51% compared to the previous year, which suggests that a significant proportion of Brazilian migrants are returning to their country, reducing the total number of Brazilians residing abroad. This could have the consequence that, in turn, the total fl of remittances to Brazil in future years continues to decline, and that, once the return of migrants decreases, the amounts recorded as migrant transfers also decrease. , thus further decreasing the total fl related to Brazilian migration. surpassing for the first time the volume of remittances. The total amount of migrant transfers represents a growth rate of 51% compared to the previous year, which suggests that a significant proportion of Brazilian migrants are returning to their country, reducing the total number of Brazilians residing abroad. This could have the consequence that, in turn, the total fl of remittances to Brazil in future years continues to decline, and that, once the return of migrants decreases, the amounts recorded as migrant transfers also decrease. , thus further decreasing the total fl related to Brazilian migration. which suggests that a significant proportion of Brazilian migrants are returning to their country, reducing the total number of Brazilians residing abroad. This could have the consequence that, in turn, the total fl of remittances to Brazil in future years continues to decline, and that, once the return of migrants decreases, the amounts recorded as migrant transfers also decrease. , thus further decreasing the total fl related to Brazilian migration. which suggests that a significant proportion of Brazilian migrants are returning to their country, reducing the total number of Brazilians residing abroad. This could have the consequence that, in turn, the total fl of remittances to Brazil in future years continues to decline, and that, once the return of migrants decreases, the amounts recorded as migrant transfers also decrease. , thus further decreasing the total fl related to Brazilian migration.
Money flows to Brazil related to migration (2010-2011)
The categorization of these three types of fl is important, not only for statistical purposes and reporting, but also because of the implications at the level of public policies and the private sector. The more precise definition of the remittance fl facilitates the development of fi o products and services more suited to the needs and preferences of the target customer segment. For example, the issuers of migrant transfers usually make one-time transfers – not frequent or periodic like remittance issuers – seeking to transfer their savings to make investments in their countries of origin. On the other hand, the remittances of seasonal workers abroad are relatively unstable and are made according to seasonal cycles, This indicates that it is better to develop microinsurance products and specific credits for times when their incomes decrease. Finally, the senders and receivers of workers’ remittances have more stable fl and, therefore, could be subject to investment and real estate loans, as well as savings accounts.