Abstract Eight 2010

GLOBAL

DEVELOPMENT STUDIES

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Volume Six Winter-Spring 2010 Numbers 1-2.

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THEME: THE GLOBAL FINANCIAL AND ECONOMIC CRISIS: IMPLICATIONS FOR THE CARIBBEAN REGION

THE DEVELOPMENTAL IMPACT OF REMITTANCES IN THE CARIBBEAN: A COMPARATIVE ANALYSIS

USING EMPIRICAL EVIDENCE FROM ST. LUCIA AND TRINIDAD AND TOBAGO

Samantha C. Joseph*, Roger Hosein** and Martin Franklin***

Department of Economics

University of the West Indies, St. Augustine, Trinidad and Tobago

Published Online: March 15, 2017

ABSTRACT

Official remittance flows to developing countries have increased in the last decade, reaching a peak in 2008 at US$ 328 billion. Remittances are a leading source of external finance for the development of many economies and are second only to foreign direct investment flows. Few studies have examined the impact of remittances on economic development in the larger Caribbean and even fewer in the OECS countries. This study, using empirical data, seeks to bridge this gap through a comparative analysis between St. Lucia and Trinidad and Tobago. The results suggest that remittances significantly affect economic development at the household level through the increase in income, access to greater health and educational services, as well as smoothing consumption and an increase in domestic investments. However, the governments of the respective economies lack the necessary policies to enable the Diaspora to contribute to the development process.