JIS News

Given the high levels of remittance flows into Jamaica, Finance and Planning Minister, Dr. Omar Davies has suggested that government undertake a study to find out how remittances were being utilized.The probe will also ascertain, who the beneficiaries of remittances were and who was sending the money.
“The trick is to seek to obtain that information without prying, so I don’t know whether we could lower the transaction cost for those who will fill out a form but we need a clearer idea,” Dr. Davies said, as he addressed a Jamaica National Building Society (JNBS) and United States Agency for International Development (USAID) Money Transfer symposium today (June 2) at the Jamaica Conference Centre downtown.
“We need to have assess the data on who are the beneficiaries, what was the money intended for and what was it really utilized for. At the same time, we need to have some more information on the remitter (the sender) although that may be a bit more difficult,” Dr. Davies said, adding that, the extent to which the government can broaden its knowledge base, could assist in enhancing inflows.
He said fuller data was also needed on the actual profit margins involved. “I should indicate that this is not just a concern of the government of Jamaica. The government of Canada is seeking to become more involved in monitoring the transaction cost involved in remittance services and their equivalent of a fair trading corporation is seeking to identify what would be a reasonable cost associated with such remittances,” Dr. Davies said.
The Finance Minister noted, that in looking at these flows, it is important to know what income groups were transferring the money.
Jamaica has benefited from significant foreign exchange flows over the years, moving from $184 million in 1990 to $800 million in the late 1990’s and the figure stood at some $1.47 billion in 2004.
Sixty per cent of the remittances come from the United States, 25 per cent from the United Kingdom and five per cent from Canada and the Cayman Islands. “Even as the flows have grown, we can track that it plays too far an important role in the society and the economy, for us to be as ignorant as we still are in terms of so many of the critical questions about the remittances,” Dr. Davies stated.
He noted that while the impact of remittances on the foreign exchange system could not be precisely quantified “access to this additional sum each month or week, provides the Bank of Jamaica with a cushion from which it can determine its foreign exchange policy”.
“The remittance flows have no sort of seasonal variations. the flows from has certainly changed that whole picture in terms of the stability of the foreign exchange market,” he added.
The Finance and Planning Minister noted however, that there was a downside to remittance flows, in terms of the threat of terrorism and the financing of the illegal arms. He pointed out, that there had been increased stringency in regulating the movement of capital across borders and Jamaica has taken steps to formally register those institutions, which seek to become involved in foreign exchange transactions.
“That is one of the changes we have imposed due to the possible misuse of this facility,” the Minister indicated.
During the symposium, the JNBS donated some 10 computers to the Kingston High School as part of the JNBS/USAID Money Transfer Card and Education Project.

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