IAMTN Weekly Update 21/01/2009
IAMTN Weekly Update
‘There seems to be more news this week as the year gets into full swing’ says Leon Isaacs, Managing Director of IAMTN – ‘so apologies if this weekly update is a bit longer than usual. If we continue to gather relevant information at this same level we will look at providing a bi-weekly update rather than just once per week to make this intelligence more digestible’.
This weeks news items cover the Dubai conference, some economic data from Colombia, Pakistan, Philippines and El Salvador as well as a press release from MoneyGram showing their network expansion and a potential change in policy from the new US administration.
1. MTD 2009 – Book before 31st January for 15% Discount
9th March 2009, Shangri la Hotel
There are a few sponsorship and speaker opportunities available for this conference so if you are interested please don’t hesitate to contact Charlotte Giles: email@example.com. Full information on delegate places is available on the IAMTN website.
If you would like more information about IAMTN and how to become a member of the international organisation for money transfer networks please contact Kellie Waidson: firstname.lastname@example.org
2. Colombia reports sharp drop in remittances
BOGOTA (AP) — New government figures show that Colombians living abroad are sending less money to their home country — though it’s too early to say if it’s a trend.
The central bank says it recorded $321 million in remittances for November. That’s down 31 percent from $468 million for the same month in 2007.
Monday’s report doesn’t give a reason for the drop, but it appears to be linked to a slowing global economy. Most Colombians abroad live in the U.S. or Europe.
Colombians sent home $4.4 billion from January through November 2008. For all of 2007, remittances were $4.5 billion.
Leon Isaacs comments: ‘These figures are quite dramatic for a single month. November 2008 had the deepening US financial situation plus real problems in Europe. Colombia receives remittances from the US primarily but also a very significant amount from Spain. The weaker Euro and employment problems in Spain in November may have caused remitters to send less. This will be something to watch out for in the next few months data’.
3. Salvadorans send home more money despite crisis
SAN SALVADOR, El Salvador (AP) — Salvadorans living abroad sent home about $3.8 billion last year, an increase of 2.5 percent despite the global economic turmoil.
El Salvador’s central bank said Tuesday in a report that the remittances figure is up from the previous record of $3.7 billion in 2007. The yearly increase was of $92 million.
The central bank attributes the rise in part to the renewal of temporary U.S. work permits granted to Salvadorans after a series of earthquakes in 2001. The permits apply to about 10 percent of the 2.5 million Salvadorans living in the U.S.
LI: An interesting contrast to Colombia which may reflect the fact that nearly all of El Salvador’s remittances come from the USA and to some specific factors as mentioned in the article. Compared to the previous growth 2.5% would be called modest.
4. Plan to jack up quantum of remittances to over $12b
By ERUM ZAIDI – The Nation
KARACHI - The federal government is preparing a plan to jack up annual quantum of the inflow of remittances to over $12 billion a year, sources told The Nation.
The federal govt would offer incentives to the overseas Pakistanis for transferring money through the legal channels, sources said.
They said that the government was considering providing insurance to the expatriates, allot plots to them in the industrial and export processing and offer some other lucrative incentives to attract remittances.
In the current financial year, the government has anticipated inflow of 7.5b dollars remittances, one billion dollars more than the previous financial year.
This scheme would tap the overseas market of workers’ remittances especially USA, S Arabia, UAE and GCC countries in a wake to accelerate growth in the remitted amount being sent to the country. Also this plan is expected to strengthen the position of external receipts with carrying risks in the tough international environment, sources added.
However, an economic downturn and recessionary tendency being witnessed in the U.S and the U.K would be a major challenge towards successfully implementing this plan, sources warned.
Earlier, State Bank in its first quarterly report for FY09 had predicted that the inflow of remittances from the Pakistani expatriates was feared to fall short by $200 million to 7.5b from the targeted $7.7b in 2008-09.
According to SBP data on workers’ remittances, Pakistan’s overseas workers sent the highest-ever amount of $673.50m as remittances in Dec 2008, beating the previous record of $660.35m received in Sept 2008. The amount of $673.50m received in Dec 2008 showed an increase of $194.24m, or 40.53 percent, when compared with $479.26m received Dec 2007.
LI: This is a fascinating article and one I think we will see more of. This shows that the government in Pakistan realises how important remittances are to an economy that has already received external support. Remember that Pakistan has received loans from the IMF to the value of $7.6 billion which is not much different to the total value of remittances for a year! What is really interesting is that the government is looking to take a number of proactive measures to incentivise remitters to send money home through legal channels. It will be interesting to see if more money enters Pakistan in total as a result of these measures when they are introduced or whether there is a shift from informal to formal methods.
5. The coming perfect storm
Manila Standard Today – Philippines
No one said the new year was going to be a joyride for the Philippine economy, as the effects of the prolonged worldwide recession start to hit our shores. And now the World Bank is predicting that two significant vulnerabilities of the local economy are about to come into play in a big way in 2009.
In its quarterly economic update for January, the World Bank predicted a one-two punch on the Philippines in the form of significant decreases in foreign remittances from Filipinos working overseas and reduced income from our largely undiversified export sector. Since both foreign remittances and export earnings are major drivers of the local economy, the hits these two sectors will take in 2009 can only mean that the Philippines will take a lot more time to get out of the global economic funk.
According to the bank, money sent home by millions of Filipino workers abroad will expand only by about 4 percent this year, compared to the hefty 15.1-percent increase in remittances from January to November 2008 against the same period in 2007. Because foreign remittances drive consumer spending in everything from cellular phone “loads” to the real estate market, and because consumers spending the money they get from abroad will get us out of a recession faster, less remittances mean a longer-lasting recession hereabouts.
The Bank’s prediction is fully half of the 8 percent of the already-reduced forecast of the Bangko Sentral for this year’s remittances, which peaked at more than $15 billion in the first 11 months of 2008. The Bank says the only increase expected from remittances will come from Filipinos employed in “recession-proof” jobs, meaning that Filipinos working in sectors whose jobs may suddenly become desirable to local workers in these depressed times could soon join the unemployed in the countries where they reside.
For those who still don’t know how big a factor foreign remittances play in the local economy, money sent home from abroad now accounts for something like 10 percent of the country’s entire domestic product, apart from driving consumer spending. After decades of being saved by foreign remittances, the local economy may finally find that the well is now in danger of running dry.
LI: Another item where the importance of remittances is recognised and showing how countries around the world are affected by the current economic times. These are big numbers.
6. French-speaking countries sign on as MoneyGram network grows in France
MINNEAPOLIS--(BUSINESS WIRE)--Jan. 19, 2009--MoneyGram International (NYSE: MGI) today announced that in 2008 the company added 13 countries and territories and more than 33,000 locations to its global network, helping people and communities around the world by providing more convenient choices for safe and reliable money transfer services.
In 2006, in response to business and market needs, MoneyGram launched its owned-retail strategy in France and Germany, and today operates more than 50 stores and kiosks in high-traffic areas in immigrant communities. Half of the countries joining MoneyGram’s network last year are French-speaking, reflecting the company’s commitment to serving the needs of France’s large immigrant population. According to the World Bank, France is a top-five immigration country with 6.5 million immigrants.
“Our growth in France was vital to adding Algeria, which according to the World Bank, produced the largest influx of immigrants into the country,” Tony Ryan, MoneyGram chief operating officer and executive vice president said.
Germany is a similar success story for MoneyGram. The company established service to Serbia this year, which produces a high volume of immigrants to the country. MoneyGram has 30 owned locations strategically located in Germany.
“Network breeds network and feeds both expansions to new countries and increased locations in key areas around the globe,” Ryan said. “The more we grow, the more interested retailers, post offices and financial institutions are in seeking our service to expand and grow their own businesses and offer more services to their customers.”
Countries and territories added to MoneyGram’s global network include the French-speaking Algeria, Central African Republic, Comoros, French Polynesia, Gabon, Madagascar and New Caledonia. Other countries include Angola, Bermuda, Bhutan, Czech Republic, Serbia, and Slovenia.
LI: MoneyGram now has over 160,000 locations around the world and have clearly increased their bricks and mortar distribution substantially last year. They have made real progress in establishing network in countries like Algeria and Serbia which have traditionally been very hard to work in. It will be interesting to see if the competitive landscape changes in these markets in terms of other competitors and also the effect on prices.
7. Sen. Clinton signals Cuba policy change
ALEXANDRIA, VA - President-elect Barack Obama’ nominee to be Secretary of State, Senator Hillary Rodham Clinton (D-NY), signalled a change in American foreign policy with respect to Cuba. At her confirmation hearing before the Senate Foreign Relations Committee this week, Senator Clinton indicated that the new administration is committed to lifting current restrictions on Americans’ freedom to visit family members in Cuba and to send remittances to relatives in that country.
Calling Cuban-Americans “the best ambassadors for democracy, freedom, and a free market economy,“ Clinton went on to tell members of the committee that she hopes the Castro regime will see that the new administration represents an “opportunity to change some of their typical approaches.”
LI: This news, if it happens, will bring more competition to one of the last ‘closed’ corridors and will bring competition to the non-US based organisations, particularly those based in Canada and Europe that quite legitimately are operating in Cuba today.
- Contact Information
- Kellie Waidson
- Office Adminstrator
- Contact via E-mail
This news content may be integrated into any legitimate news gathering and publishing effort. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.