GLOBAL

DEVELOPMENT STUDIES

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Volume Four Winter 2006-Spring 2007 Numbers 3-4.

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Theme: Global Labor Migration and Emerging Trends in Development Finance: An Assessment of the

Economic and Social Impact of Migrant (Worker) Remittances in Central America and the Caribbean

REMITTANCES TO CARICOM COUNTRIES: POLICY ISSUES AND OPTIONS

Claremont Kirton Georgia McLeod

Senior Lecturer Assistant Lecturer/

Department of Economics Junior Research Fellow

University of the West Indies Sir Arthur Lewis Institute off

Mona, Kingston, Jamaica Social and Economic Studies (SALISES)

Mona, Kingston, Jamaica

Published Online: February 10, 2017

ABSTRACT

In 2005, remittances to Latin American and the Caribbean (LAC) countries were US$53.6 billion, representing roughly one quarter of the total worldwide flows of worker remittances. These remittances account for approximately 3 percent of the region’s gross domestic product (GDP), 10 percent of its total exports of goods and services, and 11 percent of its total imports. Available data indicate that the magnitude of these flows is growing. Only a few studies in the last decade have assessed the role remittances play in the economic and social development of the English-speaking Caribbean. Even fewer have examined the policy interventions available to Caribbean policy makers targeting migrants’ remittances. Though not exhaustive, policy measures to enhance the development impact of remittances include remittance bonds, premium interest rate accounts, facilitating transfers through micro-finance institutions, tax breaks on imported capital goods and outreach through migrants’ services institutions. This article examines selected international best practices, especially by developing countries, geared towards maximizing the development impact of remittances. It outlines an inventory of policy measures and assesses their relevance, usefulness and applicability in the context of CARICOM countries.