UN trade chief sees up to 6 pct drop in migrant remittances in 2009, hurting poor countries
By Bradley S. Klapper
The Associated Press, November 14, 2008
Geneva (AP) — Migrant remittances, a vital source of income for poor countries, could decline by up to 6 percent next year due to worsening economic conditions around the world, the U.N.'s trade chief said Friday.
Supachai Panitchpakdi, head of the U.N. Conference on Trade and Development, also warned that rich countries' investment in the developing world will dry up as a result of the expected global downturn. He said the decline would be somewhat less than the 40 percent drop predicted by the Paris-based Organization for Economic Development.
On remittances the cash sent home by migrants living and working abroad Supachai said the magnitude of the decline is still unclear, but estimated it will range between 1 percent and 6 percent in 2009.
Remittances provide a key form of finance for poorer countries. They totaled well over $300 billion worldwide last year, according to the World Bank.
Mexicans send back billions each year from the United States while Filipino and Indian expatriates also pump much-needed cash into their home economies. In countries such as Haiti, Honduras, Lebanon and Moldova, over a fifth of gross domestic product is attributable to remittances.
'We are likely to witness new debt crises, not in the usual highly indebted, poor countries but in developing countries or economies in transition,' Supachai told a meeting of the body's trade and development board.