Wednesday, February 21, 2007

Remittances in the Pacific Region

Sources of remittances in the pacific small states;

Fiji: Military coups in 1987 and 2000, aimed at strengthening the political control of ethnic Fijians, caused a sharp upturn in emigration by Indo-Fijians including doctors, nurses and computer specialists, to Australia, Canada and New Zealand. Such emigration of about 80,000 persons has reduced Indo-Fijian share in the population from about 50 percent to 40 percent. Ethnic Fijians are longstanding participants in United Nations peacekeeping forces, contract workers in Afghanistan and Iraq, and professional rugby players in Australia, New Zealand and Europe.

Kiribati: Seafarers who have been certified as high quality by the International Maritime Organization are employed on vessels operating worldwide. They normally obtain renewable one-year contracts following graduation from the Kiribati Maritime Training Institute, which was established with United Kingdom assistance in the 1970s.

Samoa and Tonga: Large communities from these countries have existed in New Zealand for many years and generally maintain very close links with their home countries, even after two or three generations. There are also sizeable numbers in Australia and the United States, primarily employed in construction, and agriculture. Numbers living abroad exceed the local population in both countries. Well-established links ensure a continued flow of migrants, even as substantial numbers regularly return home, especially in retirement.

Papua New Guinea, Solomon Islands and Vanuatu: Emigration from these three countries has been very small since independence, notwithstanding relatively low growth and high unemployment rates over long periods. The reasons for this may include the very small number of skilled citizens, less pronounced links than Samoa and Tonga with New Zealand, the high percentage of the population living in rural areas where knowledge of jobs abroad is minimal, and the continued importance of the wontok system whereby a relatively high percentage of earnings would need to be widely shared with neighbors.

Marshall Islands and Micronesia: It is estimated that up to 20,000 Marshallese and 30,000 Micronesians could be resident in Guam, Hawaii and the mainland United States. These citizens do not require visas and there are no restrictions on working in the United States. Increases in emigration have been associated with stepdowns in Compact funds, which have limited public sector employment.

Palau: Palauan citizens also have unrestricted access to live and work in the United States and remittances are sizeable. However, these receipts are broadly offset by outward transfers by Chinese, Filipino and other Asian nationals, who work in the fast growing tourism sector.


Source; Remittances in the Pacific Region, IMF

Further reading;
What Do Remittances Do? Analyzing the Private Remittance Transmission Mechanism in El Salvador
Workers' Remittances and Economic Development
Do remittances have a flip side ? A general equilibrium analysis of remittances, labor supply responses, and policy options for Jamaica

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