Remittances in the Latin American and Caribbean Region: A Review of Its Economic Impact

News about remittances, the wave of money reported the world over, has particularly resonated in Latin America and the Caribbean. Worker remittances sent from the United States, Europe and Japan, among other parts of the world, totaled an estimated USD $45 billion in 2004 and are estimated to grow to $51 billion or more in 2005. The volume has important manifestations across the Western Hemisphere in terms of its share to national income or in per capita terms. This trend has significantly been influenced by a marketplace and industry that has energized these transfers. This paper provides an overview of remittances in eighteen Latin American and Caribbean countries that relates their economic characteristics to income, trade, per capita transfers, and transaction costs in the market of intermediation. The paper also addresses remittances as part of a broader process of integration in the global economy through what we term “the five Ts”: tourism, transportation, telecommunications, transfers, and trade.

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