Record Transfers Reach Fewer Households | a job

Krystal, at 20 years old, is not shy about her lifestyle.

She is one of thousands of Jamaicans who rely on remittances from abroad for living expenses.

But Crystal, whose real name has been withheld to protect her privacy, does not quite fit the images that central bank statistics raise of remittance recipients as families or family members receiving money from relatives working and/or residing abroad.

She is a Kingston based social media influencer, but relies on transferring money from partners to fund her elegant lifestyle. But the pandemic forced her to adapt.

“Initially with the pandemic, it affected me, but now it’s okay,” she says.

“Years ago, I basically had generous people send me money as well as my ex-boyfriend. But I got banned from Western Union and MoneyGram and had to use other payment methods, like banks to get the cash.”

Crystal’s experience speaks to a trend that polls are beginning to discover.

Remittances, which represent the largest inflow of foreign currency into Jamaica, are not only increasing but are constantly setting new records since the pandemic.

Ostensibly, larger flows should mean more people receiving, but in confidence surveys released this year, there has been a marked decrease in the number of households saying they are benefiting from remittances.

“Right now, this is something we have observed very carefully, and we are concerned,” said pollster Don Anderson, whose company Market Research Jamaica conducts quarterly business and confidence surveys on behalf of the Jamaica Chamber of Commerce and the Jamaica Conference Board.

Market research services have been tracking conversions in surveys for 12 years. The most recent Q1 2022 survey reports a 10-point drop in recipients since the pandemic. It found that 25 percent of households received remittances in this period, down from 29 percent in 2021 and 35 percent in 2020.

We cannot yet determine what the factors are. “I think we will have to assess the situation independently from the surveys that we do on a regular basis,” Anderson said Tuesday when releasing the quarterly survey results and confidence indices.

Before the pandemic, between 33 percent and 38 percent of households said they were receiving remittances.

The central bank data suggests that the decline is significant, especially compared to the expanding remittance market, which has seen a 45 percent jump in inflows over the two years of the pandemic.

In 2020, remittances jumped to a new record high of $2.9 billion, from $2.4 billion, and then surpassed the record in 2021 with $3.5 billion in inflows.

But Krystal doesn’t focus on those big numbers.

She was planning to start her own online business.

“I’m supposed to meet someone today to join my company,” she said on Friday. “I expect to start making more money from my business and reduce my need for remittances.”

Both the central bank and remittance service providers assumed that the market benefited from two new factors: reduced travel during the pandemic, which meant that cash that would have been transferred in person by visiting relatives was sent through official remittance channels instead; And the emergence of online transfer platforms, which makes money transfer more convenient.

Anderson will seek to reveal whether people are underestimating their financial situation, or if the rise in official remittance data is in part related to business transactions inadvertently entering the remittance pool.

One remittance expert, who spoke on the condition of anonymity because he was not authorized to comment, explained that remittances are essentially a gift sent from one party to another, or “the transfer of wealth from one pocket to another.” The person said that payment is not supposed to be for a good or service, even if the money is sent through one of the six major money transfer providers.

The Bank of Jamaica, BOJ, which oversees the remittance market, noted before the world faced the pandemic, that it was studying how remittances were calculated and whether the model should be modified to get a more accurate count.

The Central Bank did not mention what was stated in that study, if any.

On Tuesday, Anderson indicated that his team was interested in knowing answers to questions such as “why is this reduction happening,” “where is it happening” and “household income.”

“We’re in the field right now, and we’re going to try to learn from consumers what we can by adding a question somewhere along the line,” Anderson said.

“Maybe we should assess the situation independently in surveys that we conduct on a regular basis,” he said.

The pollster said Friday that his team will be asking clarifying questions in the current round of surveys being conducted for confidence indicators for the second quarter.

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