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Lessons from the APEC Remittances Initiative

Finance Forum, September 21, 2004. Raul Hernandez-Coss (FSEFI). Lessons from the APEC Remittances Initiative. Best Practices to enhance the development impact of remittances. Hawala 2 Conference. WB Financial Sector Remittances Program. November. 2003. 2004. September. 2005. April.

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Lessons from the APEC Remittances Initiative

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  1. Finance Forum, September 21, 2004 Raul Hernandez-Coss (FSEFI) Lessons from the APEC Remittances Initiative

  2. Best Practices to enhance the development impact of remittances Hawala 2 Conference WB Financial Sector Remittances Program November 2003 2004 September 2005 April June July Shaping the Remittances Market by Shifting to Formal Systems APEC ARS Initiative / APEC Remittances Initiative Follow Up Second APEC Symposium Additional Research APEC ARS Draft Report USA – Mexico Remittance Corridor Canada – Viet Nam Remittance Corridor Publication The APEC Remittance Initiative To encourage flows of remittances through formal channels

  3. Top 15 Remittance Receiving Countries in 2002 (millions/ USD) Lessons from the Case Studies a) need for conducting bilateral analysis, for both the sender and the recipient remittance countries, b) different degrees of development on the remittance corridors c) presence of informal mechanisms that are linked to illicit activities d) the need for a balance between regulations and responding to senders incentives

  4. Workers’ Remittance to Mexico and Vietnam 1999–2003 (millions/USD)

  5. 1999–2003 (percent) Remittances as a Share of FDI

  6. Key Features for the Corridors

  7. Nascent Market Mature Market Impact of factors and incentives IFT systems are faster and cheaper than formal systems. Formal systems rely on expensive mechanisms not necessarily designed to facilitate remittance transactions. Cost and speed are critical, but once competitive prices and efficient channels are in place, competitors should explore other factors

  8. Nascent • Use of Money Orders sent by mail. • Cash couriers • 20 days Sergio Mature • Use of a Bank • 2 seconds • He uses Money Orders • delivered by courier service Oliverio Channels

  9. Perceived Incentives in the Remittance Process

  10. Nascent Market Mature Market Information to the Market Authorities and investors should initiate research on the characteristics and potential of the remittance corridor Authorities should institute mechanisms and standards for systematic information gathering that are detailed and organized

  11. Mono-product platform Multi-product platform Mono-product platforms, such as those implemented by MTOs, are very limited for products and service innovations. Businesses are looking at remittances flows as an opportunity to create land and home investment opportunities for the remitter

  12. Nascent Market Mature Market Regulations should be a tool Regulations should be applied transparently and consistently to result in a level playing field for market competitors. Standards should be consistent.

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