David Ariosto, CNN, March 25, 2009
The money that foreign workers send home will shrink by $15 billion this year, as the global economy limps along, the World Bank projects.
Such remittances, or money transfers, will fall from last year’s high of $305 billion to $290 billion in 2009, the World Bank said in a report released this week.
Money transfers are among the largest sources of external financing in developing countries, often used to buy basic necessities in areas with rampant poverty.
“Because they flow directly from people to people, remittances become especially important for poor people,” said Dilip Ratha, an economist at the World Bank and lead author of the report. “Many people use remittances as their only lifeline.”
The main reason for the drop is the weakening of economies in “destination” countries where migrant and immigrant workers live, the report found.
In places such as Atlanta, Georgia, remitting companies are feeling the pinch.
“Generally, people are using our service less and less,” according to an agent at Mexico Transfer, a company based in Mexico City that makes money transfers in the United States and across Latin America.