Enhancing efficiency in remittance markets in Latin America and the Caribbean

Transcription

1 Enhancing efficiency in remittance markets in Latin America and the Caribbean Updates on the CEMLA-IDB-WB Remittances program Global Payments Week 2010 Amsterdam, October 22, 2010

2 Outline Importance of Remi0ances in La3n America and the Caribbean (LAC) Cost of remi0ances to the LAC region General Principles for Interna3onal Remi0ance Services Enhancing efficiency in remi0ance markets in La3n America and the Caribbean: CEMLA- IDB- WB remi0ances program Updates on the program

3 Importance of Remittances in Latin America and the Caribbean Remi0ances are an important source of family (and na3onal) income in many LAC economies, represen3ng in some cases a high percentage of GDP of the receiving countries Average of 17% growth between Total remi0ances to LAC in $US billions Total remi0ances to LAC in $US billions Approximately 20 million LAC adult senders around the world, 60% in the U.S. Remi0ances less vola3le than other interna3onal financial flows 2009 total s3ll outstrips FDI and ODA Source: MIF/IDB

4 Costs of remittances services to the LAC region Average total cost of sending remi0ances to La3n American and the Caribbean region around USD18 for an amount of USD200 It is important to bolster inflows from remi0ances and reduce the cost of sending them. It is therefore necessary to find mechanisms which improve money transfers to families of migrants who live and work outside their countries of origin Source: The global average total cost is calculated as the average total cost for sending USD200 with all RSPs worldwide

5 General Principles For International Remittance Services In discussing possible ac3ons to improve efficiency in remi0ance markets, it is important to refer to the BIS- WB General Principles for Interna3onal Remi0ance Services (GP) Mul3lateral effort to address a global challenge: reduce the cost of remi0ance services across countries and bring more transparent, efficient, accessible and compe33ve remi0ance markets Authori3es should lead the efforts to achieve these objec3ves through implementa3on of the GP

6 Enhancing efficiency in remittance markets in LAC and the Caribbean Roles" CEMLA-IDB-WB remittances program WB alliance to support the implementa3on of the principles in La3n American and the Caribbean. Coordina3on effort, no duplica3on CEMLA acts as the execu3ng agency World Bank provides the methodology and payment systems exper3se The Mul3- lateral Investment Fund of the Inter- American Development Bank provides funding and exper3se on regional remi0ance issues

7 Enhancing efficiency in remittance markets in LAC and the Caribbean CEMLA-IDB-WB remittances program The Program is achieving its objec3ves through several instruments including: 1. Assessments of the remi/ance markets 2. Documenta6on and Dissemina6on tools Public Remi0ance Reports Dissemina3on events for local stakeholders Web page 3. Technical Assistance and Lessons Learned

8 1. Assessments of the Remi/ance Markets Country missions to assess the degree of applica3on of the GP As product of every mission, a confiden6al report is delivered to the authori3es that includes an evalua3on of the remi0ance market in the country. The mission team discusses ac6on plans with local authori3es with the aim of reducing remi0ance transfer costs and increasing the overall efficiency of those services Up to October 2010 advisory work completed in nine countries: El Salvador, Honduras, Guatemala, Hai3, Peru, Panama, Brazil, Colombia and Paraguay Updates on the Program

9 Updates on the Program 2. Documenta6on and Dissemina6on: Public Reports The aim of the reports is to increase transparency and knowledge of these markets. The documents detail the regula3ons governing the market, iden3fying the responsible authori3es and market par3cipants. The country reports also contain informa3on on the means for sending remi0ances, their origin and des3na3on, instruments used to pay such flows, the costs involved in those transfers, as well as the main characteris3cs of the beneficiaries Remi0ance reports have already been published for Guatemala and Peru and the reports of Panama and Paraguay will also be available this year

10 Updates on the Program 2. Documenta6on and Dissemina6on: Interna6onal Sensibiliza6on Seminars to bring together experts and decision makers to discuss and communicate progress made in implemen3ng the General Principles in different LAC remi0ance markets Global and Regional Payments Weeks Mexico DF November 11-12th Regional Training Workshop on Methods and Procedures to collect remi0ance informa3on in Central America''

11 Updates on the Program 2. Documenta6on and Dissemina6on: Web page to communicate progress made in implemen3ng the General Principles in the region s remi0ance markets, and the publica3on of informa3on on the program ac3vi3es, relevant materials, events and conferences remesas.org/principios

12 3. Technical Assistance Technical Assistances GP1: Transparency and Consumer protec3on. Providing full, plain, adequate and comparable informa3on about prices and related informa3on to send remi0ances from the US to the Central American countries GP3: Regulatory Framework Advise public sector in improving policy and regulatory frameworks for remi0ance transfers: Honduras and Colombia Role of the authori3es: MOU signed with CONCADECO (consumer protec3on council of el Salvador, Honduras, Guatemala, Panama, Costa Rica and Nicaragua) to support their effort to increase transparency and consumer protec3on for remi0ance consumers

13 in Centroamerica Envía Centro América contains detailed informa3on on the costs of sending remi0ances from the four main remi0ance sending states in the U.S. (California, District of Columbia, Florida and New York) to Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. The database also includes informa3on on the region s important south- south corridor running from Costa Rica to Nicaragua The website allows users to compare the costs of sending remi0ances and informa3on on transac3on speed, the different products available and the disbursement network in receiving countries

14 Key findings from Most corridors are well contested Most corridors have rela3vely low prices by interna3onal standards Total costs range from 3.52% to 7.15% to send $200 Total costs range from 2.67% to 5.03% to send $500 From the United States, Florida is the most expensive state to send money from (6.59% of $200 in September) and California is the least expensive (consistently under 5.0% of $200) Costa Rica is the most expensive country to send money to (7.11% in September) and El Salvador is the least expensive country to send money to (4.38% in September)

15 In the pipeline Country missions 2011: Dominican Republic and Suriname Preliminary work has begun and in 2010 technical assistance ac3vi3es will enter in the opera3ve phase in the following countries: GP1. Transparency and Consumer Protec3on: support the consumer protec3on authori3es in the effort of dissemina3on of the Central America remi0ance database in USA and Central American countries. Specific workshops will be organized in order to raise awareness by targe3ng migrants and their families GP2. Enlarging access to remi0ances services : Mexico GP3: Advise public sector in improving policy and regulatory frameworks for remi0ance transfers: Panama GP5: Risk management. Help the relevant authori3es to establish guidelines for good governance and risk management to enhance confidence in remi0ance services providers: Honduras Role of the authori3es: Technical assistance to the authori3es to evaluate the methodology to supervise Money transfer operator offering remi0ance services in Honduras

16 Thank you! Paloma Monroy General Principles on Remittance Markets in Latin America and the Caribbean CEMLA/MIF/The World Bank