Remittances to Mexico register first increase since 2008

The amount of money sent home by Mexicans living abroad increased slightly in April for the first time in 17 months.

The Bank of Mexico says remittances for the month reached $1.8 million, less than a 1 percent increase over April 2009. The bank says no increases had been reported since November 2008. But it also noted in its report that remittances from January to April this year dropped to $6.6 million, nearly 9 percent less than the same year-ago period.

Remittances are Mexico's second-largest source of foreign income after oil exports. Nearly all of the money comes from the US, where nearly 12 million Mexicans live.

Recovery in the Gulf drives rise in remittances to Jordan

Economists expect remittances from Jordanians working abroad, mainly in the Gulf region, to continue to increase steadily this year.

According to figures recently published by the Central Bank of Jordan (CBJ), expatriate transfers during the first four months of 2010 rose by 2.4 per cent reaching JD797.7 million ($1.1 billion) compared with JD779 million during the same period last year.

Foreign remittances represent approximately 20 per cent of Jordan’s gross domestic product.

CBJ figures showed that remittances during April of this year increased by 6.7 per cent compared to the same month in 2009 from JD195 million to JD208 million.

Economist Hani Khalili said that the rise in money transfers from abroad indicates that either the number of Jordanians working in the Gulf region has increased or that workers’ income have gone up.

“I believe that the number of Jordanians working in the Gulf has increased because the economies of these countries are recovering and they tend to attract more skilled labor,” Khalili said, adding that Jordanians are among the most wanted skilled workers in the Gulf.

Fahmi Abu Dayeh, chief economist at a local bank, said that the volume of remittances is returning to its usual levels from previous years, noting that the drop in remittances in 2009 was temporary, due to repercussions of the global economic downturn.

“I expect remittances to continue growing in the coming years as higher oil prices have spurred recovery in the Gulf region,” he said.

Economist Ali Tabbalat agreed, but cautioned that “remittances are expected to rise steadily but not dramatically”.

The Gulf private sector is looking for qualified and skilled staff, and many Jordanians are heading to work in the oil-rich region, particularly in Saudi Arabia, Tabbalat added.

Economists agreed that last year analysts overestimated the effects of the global downturn when they predicted that many Jordanians working in the Gulf would be laid off.

Abu Dayeh said that lay-offs in the Gulf were primarily among Asians who often work as unskilled laborers in construction projects, whereas Jordanians work in more specialized fields such as engineering, medicine and academia.

Tabbalat said that the majority of Jordanians who left work in the Gulf were working in Dubai, as the emirate was hardest hit by the global financial crisis, agreeing that the number of those who were sacked was “very limited”.

According to official figures, over 600,000 Jordanians work abroad, mainly in the Gulf countries, of whom 260,000 work in Saudi Arabia, 250,000 in the United Arab Emirates, 42,000 in Kuwait and 27,000 in Qatar.

Remittances - Hard times in Greece prompt Albanians to return home

After the fall of Communism two decades ago, Greece became a promised land for hundreds of thousands of Albanians, a place to make a new start after generations of grinding poverty. But the gold rush has fadeed and many migrants are now finding themselves to be the first victims of the Greek financial crisis. Some see better economic prospects in Albania and are tempted to return home for good.

"I have never seen the economy so bad," said Agim Aliaj, a 48-year-old house painter who returned to Albania in March, after failing to find regular work in Greece for months.

"It has been impossible for me to send money home for a year and a half. Their problems will affect us, too, very hard."

Albanians are by far the largest groups of foreign workers in Greece, estimated at 650,000 to 800,000, and have been among the first to feel the current turmoil.

Since the onset of the global financial crisis, the woes of Albanian migrant workers in Greece and Italy, Western Europe and the United States have been reflected in the decline of their remittances, which sank to a five-year low last year.

In 2009 remittances totaled 780 million euros, equivalent to nine percent of Albania's gross domestic product. That compared to totals of 833 million euros in 2008 and 951 million euros in 2007, the highest figure ever.

Remittances would fall further and unemployment could rise if the number of returning migrants continues to grow. On the positive side, some may also bring back capital to invest.

Aliaj, the house painter, said thousands of Albanians were struggling just to get by in Greece, hoping the economy would improve. Their families from Albania were sending them tobacco, beans and potatoes via buses plying the slow, tortuous mountain route.

Like many others, he was tempted to stay home and cultivate land in his village Kuc, where his wife, daughter and son live.

But he was quickly sobered by the experience of his fellow villagers, who saw tons of their onions, beans and apples dumped into a river for lack of a proper market or storage.

"This gives me no enthusiasm to start an activity because the sale is not guaranteed. I will wait for a few months to see how things are in Greece and will go back there," he said.

Unlike Aliaj, Gerald Hoxha, 28, has returned home to his native village for good.

"Once my daughter finishes first grade (in the coming days), all the family will come here to settle for good. There is some work here for me, not much, but it will be better than in Greece," Hoxha said.

Having worked mostly as iron worker, including for the 2004 Olympic Games, Hoxha said he had seen his daily income fall from 70 euros to as low as 30 euros when he could find work to support a wife, seven-year old daughter and three-year old son.

"If I worked 24 days a month for 50 euros a day, it would be fine. But in the last four months of winter I could work only 20 days. And I think it will be much worse in September," Hoxha said, adding nobody was keen to build there anymore.

At the Kapshtice border crossing with Greece, duty officer Landi Ipo said the number of Albanians returning for good had increased as migrants were leaving the Thessaloniki area.

There are no reliable statistics on the number of Albanians that are returning home from Greece. Greek officials acknowledge that an increasing number of Albanians are leaving but say it is too soon to speak of a major wave of departures.

"They say they have no guarantees for the future there. They are coming back with everything they own," Ipo said.

Driving his Opel car past the Kapshtice border crossing into Albania, Arben Haka said he hoped to find something to do here because life was becoming too hard for a migrant worker.

"I am hopeful I will find something in my country, because the foreign land is no longer able to keep us," he said.

Although Albania remains one of Europe's poorest countries, with unemployment officially at more than 14 percent, the Greek crisis has prompted some thinking among the migrants.

Per capita GDP in Albania stood at $3,840 annually in 2008, compared to $29,361 in Greece, according to the World Bank.

Albania is one of the few European countries that did not go into recession. Gross domestic product (GDP) rose by 3.3 percent in 2009, down from 7.9 percent the year before, and is seen growing again in 2010.

"Why does our government force us to pick the cherries of the Greeks instead of providing us with development alternatives," Aliaj asked. "Albanians have toiled and sweated in Greece. If they had stayed at home, if the right policies had been in place, something great would have been achieved."

Operational Risk - Risk Management IT Set for Increased Spending

Financial institutions worldwide will increase spending on technology related to risk management, according to three new reports released by Chartis Research. The spending increase is, in part, attributable to financial institutions' responses to the financial crisis, regulatory changes and a desire to combat financial crime.

"Financial institutions realise they must continue to invest in strong risk management IT systems," says Peyman Mestchian, managing partner at London-based Chartis. "One of the main lessons learned from the financial crisis was that risk management systems weren't up to the job."

Chartis' research reveals the key areas in risk management IT where financial services firms will continue to invest. The three new Chartis reports, "Financial Crime Risk Management Systems 2010", "Market for Solvency II Technology 2010" and "Market Risk Technology Solutions 2010" provide in-depth discussions of these markets and forecast how and where growth in IT spending will occur. The Chartis reports also identify demand-side trends, best practices, leading software vendors and competitive landscapes. They can be downloaded at www.chartis-research.com.

"Financial Crime Risk Management Systems 2010" gives a detailed account of the increase in the occurrence and complexity of financial crime and predicts that the global recession will increase the frequency of internal fraud, security breaches and false accounting. Financial services firms, according to the report, are particularly troubled by insider fraud, because of the reputational damage it brings. The paper also discusses the proliferation of identity theft and Internet-based frauds, like phishing, which are impacting financial services firms. Accordingly, firms are devoting more resources to fighting all kinds of fraud. Chartis forecasts the global market for financial crime risk management technology will grow to $4.19 billion by 2013, at a compound annual growth rate of 15%.

"Market for Solvency II Technology 2010" forecasts that expenditure will grow to $1.67 billion by 2013 at a compound annual growth rate of 19.2%. "The rate of growth reflects the growing cost and complexity of implementing Solvency II technology projects," says Mestchian, "For example, hiring and retaining staff able to manage sophisticated Solvency II projects has become a greater cost than anticipated."

"Market Risk Technology Solutions 2010" forecasts the global spend for market risk software and technology will be $1.28 billion in 2010 growing to $1.8 billion by 2014, reflecting a compound annual growth rate of 8.9%. "The EMEA region represents most of the spend this year, however, Asia Pacific will provide most of the growth over the next five years," says Chartis' Mestchian.

Mobile phones and banks, banking transactions future trends

Futurist Dr Patrick Dixon shares some ideas and concepts. Should banks be worried? Judge for yourself.

Remittance inflows to Kenya drop because of Euro problems

Remittances from the Kenyan diaspora will maintain a downward trend as the debt crisis spreads among European nations, market analysts have said.

“There has been a significant drop in remittances from the European area in the last few months, we don’t know when the trend will reverse,” said Frida Nzilani of Sky Forex Bureau.

Europe, which accounts for 27 per cent of the total remittances from Kenyans working abroad, is reeling under the weight of huge domestic debts.

“Investment instruments like mortgages are going to be affected due to reduction in incomes and job losses”, said Mr. Karisa Yaa, treasury manager at Kenya Commercial Bank.

An earlier report by the Central Bank had indicated a decline of three per cent, but market analysts warn the trend may dive further even as most Euro zone nations adopt austerity measures to curtail spending hence shrinking growth.

“Economies already in a crisis like Greece, Spain and Britain will see taxes hiked, an issue that will prompt layoffs and salary cuts” said Mr. Chris Muiga, a trader with Kenya Commercial Bank in an interview with the Business Daily.

“The decline of Greece into her current economic woes has sent jitters across the Euro zone creating a lull in what would have been otherwise a resurgent economic growth, ” said Karisa.

Kenya has been experiencing growth in the value of remittances from the diaspora for the last five years owing to the increasing number of skilled Kenyans abroad. They were, however, hit by the last global financial crisis, a resurgent upward trend has again come under pressure from the euro zone debt crisis.

The annual aggregate figures have maintained a steady upward trend from $338 million in 2004 to $609 million in 2009 except between 2008 and 2009 when there was a lag arising from the global financial crisis.

The decrease in remittances from $611 million in 2008 down to $609 million in 2009, a three per cent decline, arose from job losses and the liquidity crisis occasioned by the subprime mortgage crisis that hit Europe and North America.

Industry players attributed the persistent long run increase in cash inflows to the increasing number of Kenyans looking for employment abroad.

Philippine remittances rise 7% to $4.34 billion in March

Remittances grew seven percent year-on-year in the first three months of the year to $4.34 billion, the central bank (Bangko Sentral ng Pilipinas (BSP)) reported today.

For the month of March, overseas Filipinos sent home $1.55 billion, up from $1.41 billion in February. It was also 5.44 percent higher compared to March 2009 of $1.47 billion. BSP said remittances from land-based and sea-based workers increased by six percent and 11 percent, respectively.

In a statement, BSP Governor Amando M. Tetangco Jr. said prospects for more Filipinos finding more work abroad is "positive" in the next months, particularly in Hong Kong, Qatar, Taiwan, Kuwait, United Arab Emirates and Saudi Arabia.

Tetangco said employment opportunities "are expected to rise along with clearer signs of global economic recovery." He quoted a report from the Philippine Overseas Employment Administration that in the first quarter this year, job orders totaled 155,334, of which 20.2 percent or 45,393 were job orders for service, professional, technical, and production-related work.

Tetangco also attributed banks expanded remittance network in the continued expansion of fund transfer volume. As of the end of March, the BSP noted that these networks increased to 4,483 from end-2009 of 4,192. These networks include tieups, remittance centers and local banks representative offices or branches abroad.

BSP earlier increased its remittances forecast to eight percent this year, from six percent. In dollar terms, remittances are expected to amount to $18.7 billion this year from $17.3 billion at the end of 2009. The previous projection was six percent or $18.35 billion.