PRESS RELEASE - 6th December 2010 - Remittances are an important source of household income and foreign exchange for many developing countries, providing income directly to households to improve living standards.
Reducing Pacific remittance costs to be in line with global averages would represent a significant productivity increase for the Pacific."Remittances to both the national economies and individual families in some Forum island countries are quite significant so it is imperative that the region gets the full benefits through mechanisms that would result in a win-win situation for the sending and receiving countries," says Tuiloma Neroni Slade, Secretary General of the Pacific Islands Forum Secretariat.
In a report called "Trends in Remittance Fees and Charges" prepared by Australia and New Zealand and presented to the recent Forum Economic Ministers' Meeting in Niue, it was noted that around US$470 million was formally remitted to Forum island countries (FICs) in 2008. The primary sources of remittances to the Pacific are Australia, New Zealand and the United States of America.
The report stated that "the primary remittances policy challenge is that the average cost of remitting to the Pacific is significantly higher than global averages."
The average cost of sending remittances to the Pacific island countries is 21.7 percent of the amount remitted when sent from Australia and 15.2 per cent when sent from New Zealand. It is estimated that remitters to the Pacific pay at least US$90 million in remittance fees each year.
Following discussions of the report, the Forum Economic Ministers Meeting in Niue agreed "to explore and prioritise support for domestic initiatives in both sending and receiving countries to promote lower remittance costs."
The Ministers agreed to investigate whether domestic regulatory or payment system arrangements are a constraint to lower remittance costs and reporting back to FEMM in 2011.
They further agreed to support financial efforts, consistent with the MoneyPACIFIC Goals and promote transparency in remittance costs of Remittance Service Providers operating in their countries. The MoneyPACIFIC Goals to be achieved by 2020 are that: all school children to receive financial education through core curricula; all adults to have access to financial education; simple and transparent consumer protection be in place; and to halve the number of households without access to basic financial services.
The Forum Economic Ministers also agreed to promote national level awareness of the SendMoneyPacific website (www.sendmoneypacific.org) and share experiences in improving financial awareness, especially in relation to remittance costs. The website has improved the transparency of fees and charges by displaying both upfront fees and exchange rates.
FEMM is the premier regional forum for economic cooperation in the region. Meeting documents for the Niue FEMM including the full report on remittances can be accessed through this link:
http://www.forumsec.org/pages.cfm/economic-governance/forum-economic-ministers-meeting-femm/femm-2010.html