File(s) under permanent embargo

The development impact of remittances to Nicaragua

journal contribution
posted on 2005-08-01, 00:00 authored by A Jennings, Matthew ClarkeMatthew Clarke
Workers' remittances represent a resource flow from rich to poor countries. The global value of remittances has risen sharply to over US$100 billion a year. This represents the second largest external income source for developing countries behind foreign direct investment (FDI), and far outstrips official development assistance (ODA) (Orozco 2003a). Remittances to developing countries are becoming increasingly important as other sources of external income decline. The impact of remittances on development, however, is inadequately reflected in the literature. Latin America and the Caribbean (LAC) is the world's largest remittance-receiving region. With 9 per cent of the world's population, the region receives approximately 32 per cent of the world's remittances. It is appreciably greater than tourist revenues in many countries, and in five countries in this region, remittances account for over 10 per cent of GNP (World Bank 2003). Within LAC, Nicaragua stands out from other countries. While the US dollar value of remittances to Nicaragua, estimated at US$610 million in 2001, is quite modest compared with the US$10 billion flowing into Mexico, for example, the relative volume of this resource compared with other income flows, and the potential for the country's development, makes Nicaragua's case exceptional. Representing almost 24 per cent of its GNP, remittances to Nicaragua have a significant social and economic impact. The value of known remittances is greater than total export earnings, on a par with the country's ODA, and almost five times that of FDI. As such, remittances currently represent the second largest single resource flow into the country. This is a recent phenomenon.

History

Journal

Development in practice

Volume

15

Issue

5

Pagination

685 - 691

Publisher

Routledge

Location

Abingdon, England

ISSN

0961-4524

eISSN

1364-9213

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal

Copyright notice

2005, Taylor & Francis

Usage metrics

Read the peer-reviewed publication

Categories

Keywords

Exports