Remittances from the USA per inhabitant of home country

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January 27th, 2019 at 2:35:40 PM permalink
Pacomartin
Member since: Oct 24, 2012
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Using PEW estimates for remittances sent from the USA to the home country, divided by population of the home country in 2016 yields the following table

Remittances per inhabitant (> $50)
$14,645 Bermuda
$1,472 French Polynesia
$681 El Salvador
$617 Jamaica
$478 St. Kitts and Nevis
$422 Guatemala
$405 Dominican Republic
$379 Honduras
$341 Marshall Islands
$291 Tonga
$255 Guyana
$229 Belize
$228 Mexico------------ larges total value of remittances
$209 Barbados
$207 New Caledonia
$198 Lebanon
$163 Dominica
$147 St. Vincent and the Grenadines
$144 Grenada
$137 Haiti
$131 Luxembourg
$108 Panama
$108 Nicaragua
$103 Philippines
$98 Iceland
$96 Antigua and Barbuda
$79 Trinidad and Tobago
$79 St. Lucia
$76 Costa Rica
$75 Kiribati
$72 Liberia
$70 Vietnam
$70 Ecuador
$69 Hungary
$63 Armenia
$60 Montenegro
$57 Malta
$56 South Korea

While Mexico, given its size and proximity to the USA, obviously receives the largest total value of remittances (roughly $28 billion) the second and third country (China and India) are not even on the above list because the home population is so large.

Quite a lot of countries, particularly in Central America and Carribbean receive much more per inhabitant than Mexico.

Remittances are so important to the El Salvadorean government that they found it easier to simply abandon their own currency and adopt the USD.
January 28th, 2019 at 4:02:43 AM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 55
Posts: 6784
Quote: Pacomartin
Using PEW estimates for remittances sent from the USA to the home country, divided by population of the home country . . . .

I will leave the math to you, but would suggest that geographic proximity means that a great deal more is transferred via visits. cash, goods, trinkets, etc.


>>>>>>>>Remittances are so important to the El Salvadorean government
>>>>>>>>that they found it easier to simply abandon their own currency and adopt the USD.

It is rare for governments to be so sensible.

Travel destinations probably get more than mere "remittances". Look at how various Medical Tourism sites bring in shoppers, hotel guests, restaurant customers, taxi fares, souvenir buyers, etc., not just patients.

Look at how one country turned its entire coastline into a Maritime Sanctuary when they realized just how much money visiting yachtsmen were spending there. These are not counted in remittances, but surely serve the same function.
January 28th, 2019 at 5:20:49 AM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 898
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Quote: Fleastiff
It is rare for governments to be so sensible.


GDP per capita $3,889‎ (2017) in El Salvador. With such a large percentage of GDP being remittances from the USA, the government found that maintaining their own currency was too expensive.

Quote: Fleastiff
Travel destinations probably get more than mere "remittances". Look at how various Medical Tourism sites bring in shoppers, hotel guests, restaurant customers, taxi fares, souvenir buyers, etc., not just patients. Look at how one country turned its entire coastline into a Maritime Sanctuary when they realized just how much money visiting yachtsmen were spending there. These are not counted in remittances, but surely serve the same function.


It may have been part of the reason. Large numbers of US tourists visit Costa Rica and Panama. El Salvador may have been hoping that by dollarizing, that people would visit El Salvador as well

Flights from El Salvador to northern America
United Airlines Houston–Intercontinental Seasonal: Newark
American Airlines Dallas/Fort Worth, Miami
Delta Air Lines Atlanta, Los Angeles (ends April 30, 2019)
Spirit Airlines Fort Lauderdale, Houston–Intercontinental, Orlando

Avianca El Salvador Boston, Chicago–O'Hare, Dallas/Fort Worth, Houston–Intercontinental, Los Angeles, Miami, Newark, New York–JFK, Orlando, San Francisco, Washington–Dulles
Avianca Costa Rica Los Angeles, New York–JFK, Toronto–Pearson
Volaris Costa Rica Los Angeles, New York–JFK, Washington–Dulles
Air Transat Seasonal: Montréal–Trudeau

Once again I remind people of the Republican plan (circa year 1999-2000) to aid Latin American countries that wished to do so to dollarize. The hope was that a more stable currency would increase trade and improve the economies of those countries. Reduced pressure for illegal immigration would result.
January 28th, 2019 at 7:27:14 AM permalink
AZDuffman
Member since: Oct 24, 2012
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Quote: Pacomartin


Once again I remind people of the Republican plan (circa year 1999-2000) to aid Latin American countries that wished to do so to dollarize. The hope was that a more stable currency would increase trade and improve the economies of those countries. Reduced pressure for illegal immigration would result.


I think the real hope was to tie (trap?) them even deeper into the USA orbit of power. A group like the Sandinistas could be more easily controlled when their country is locked into the USD when they take over.
The man who damns money has obtained it dishonorably; the man who respects it has earned it
January 28th, 2019 at 9:12:34 AM permalink
Pacomartin
Member since: Oct 24, 2012
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Quote: AZDuffman
I think the real hope was to tie (trap?) them even deeper into the USA orbit of power. A group like the Sandinistas could be more easily controlled when their country is locked into the USD when they take over.


Like any major economic change, there would be a lot of repercussions both genuine and political.

When the President of Ecuador Jamil Mahuad (August 10, 1998 to January 21, 2000) proposed dollarization in late 1999, he lost his job after 17 months. The next president, Gustavo Noboa (January 22, 2000 - January 15, 2003) decided they had no choice but to dollarize. They hoped that the INTERNATIONAL MONETARY STABILITY ACT would pass, but their currency was completely worthless anyway (the largest banknote was worth only $2), that they had to dollarize even though the ACT was killed in committee.

Quote: INTERNATIONAL MONETARY STABILITY ACT OF 2000
The purpose of the bill reported by the Banking Committee is to make it easier for other countries to adopt the U.S. dollar as their official currency.
Many emerging market countries have had a recurring problem with bad monetary policy. The effects of a history of bad monetary policy include high-interest rates and a lack of long term lending in the local currency. High interest rates and a lack of long term lending stifle investment and job creation, make it difficult to purchase homes and other durable goods, and weaken local financial systems. These problems, in combination with the traumatic events in emerging market countries in recent years and the creation of the euro, have generated interest in dollarization, particularly in Latin America.
Much of Latin America is already dollarized on an unofficial basis. Unofficial dollarization means that, despite the existence of a national currency, people often use the U.S. dollar for everyday transactions, bank deposits, and lending, and governments often issue debt denominated in dollars.4 Official dollarization means a country eliminates its own paper currency and adopts the U.S. dollar as legal tender.5 (Unless otherwise explained, references to dollarization in the remainder of the report refer to official dollarization.)

https://www.congress.gov/congressional-report/106th-congress/senate-report/354/1?r=45


Any country can dollarize, but it is very expensive as banknotes must be acquired at face value instead of merely printed. Uruguay is experimenting with central bank digital currency (CBDC) which may allow the country to dollarize without acquiring banknotes at face value.
January 28th, 2019 at 11:30:49 AM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 118
Posts: 9529
Quote: Pacomartin




Any country can dollarize, but it is very expensive as banknotes must be acquired at face value instead of merely printed.


In one sentence you described why the USA rules the monetary world.

Need $60?

KSA has to pump a bbl of oil.
Japan has to make transistors.
Central American country must grow 250lbs of bananas.

USA has to enter a few keystrokes.
The man who damns money has obtained it dishonorably; the man who respects it has earned it
January 28th, 2019 at 1:08:02 PM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 898
Posts: 10670
Uruguay has had massive devaluations against the dollar, dropping three zeros from the currency on 1 July 1975 and again on March 1, 1993.

Uruguayans became accustomed to the constant devaluation of their currency. Uruguayans refer to periods of real appreciation of the currency as atraso cambiario, which literally means that "the exchange rate is running late".

Californians had a similar phrase for real estate prices in the 1980's where they said "you can never pay too much for a house, you can only pay it too early".

As a consequence of the instability of the local currency, prices for most big-ticket items (real estate, cars and even executives' salaries) are denominated in U.S. dollars.

Outside of Sweden, Uruguay has been one of the most vocal of central banks about its experiments with central bank digital currency (CBDC).
In 1995-1996, banknotes in denominations of up to 1000 pesos uruguayos were introduced, followed by 2000 pesos uruguayos in 2003. The largest banknote is 2,000UYU =$61.32 although I imagine the 1,000UYU =$30.66 is a lot more common. The biggest coin is worth 10UYU=30.66 cents, and the smallest banknote is worth 20UYU=61.32 cents.

Should they switch CBDC they could eventually peg to the USD and pretend they are using dolllars. If the central bank keeps Treasury Bonds of value equal to the circulating currency, they may be able to tap into international finance markets that are impossible now,
January 28th, 2019 at 1:22:57 PM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 55
Posts: 6784
Quote: AZDuffman
Central American country must grow 250lbs of bananas.
Please mister talleyman, tally me bananas. The trouble is that when the revolutionaries batter down the palace gate, slipping out the back door of the palace with 250 pounds of bananas won't help much. Gold, diamonds or dollars will. Confidence in a currency can erode, but the US dollar, even if tarnished, still evokes confidence simply because its accepted as the ultimate store of value no matter what end-runs are attempted.
January 28th, 2019 at 3:59:53 PM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 898
Posts: 10670
Quote: Fleastiff
Confidence in a currency can erode, but the US dollar, even if tarnished, still evokes confidence simply because its accepted as the ultimate store of value no matter what end-runs are attempted.


Fiat currency is the universal norm today, but it always bothers me that most of the world is printing currency at a rate much higher than GDP growth. If currency is backed by GDP instead of gold or silver, you would think that some ratio would be established. Right now it is $12 in GDP of the USA for ever $1 in currency, but the ratio drops every year.

Of course, most of the rest of the world is worse. I wonder if we get Central Bank digital Currencies (CBDC) what kind of ratios will be possible?

Growth in Currency In Circulation - Growth in GDP (2006-2016)
  1. -44% Sweden 22%
  2. -2.4% Norway -7.6%
  3. 20% Denmark 8.2%
    ......
  4. 27% Japan 9.0%
  5. 59% Canada 36%
  6. 76% New Zealand 54%
  7. 78% Switzerland 54%
  8. 79% Eurozone 7%
  9. 81% Australia 63%
  10. 84% U.K. -2%
  11. 87% U.S. 35%
    ......
  12. 89% Morocco 53%
  13. 110% Thailand 83%
  14. 135% South Africa 135%
  15. 148% Oman 46%
  16. 170% Brazil 160%
  17. 178% Russia 165%
  18. 180% Nigeria 179%
  19. 183% Colombia 74%
  20. 191% Kazakhstan 65%
  21. 198% Israel 79%
  22. 208% Kenya 173%
  23. 224% Mexico 85%
  24. 234% Chile 104%
  25. 243% Indonesia 240%
  26. 250% South Korea 69%
  27. 280% Iraq 140%
  28. 287% India 263%
  29. 318% Algeria 44%
  30. 329% Iceland 18%
  31. 350% Pakistan 107%
  32. 355% Ukraine -13%
  33. 359% Turkey 228%
  34. 362% Bolivia 195%
  35. 369% Egypt 213%
  36. 372% Afghanistan 166%
  37. 413% Myanmar 365%
  38. 441% Angola 114%
  39. 442% Mozambique 33%
  40. 522% DR Congo 145%
  41. 621% Sudan 167%
  42. 904% Argentina 135%
January 28th, 2019 at 6:01:54 PM permalink
Evenbob
Member since: Oct 24, 2012
Threads: 128
Posts: 17190
Quote: Pacomartin


Growth in Currency In Circulation - Growth in GDP (2006-2016)
  1. -44% Sweden 22%
  2. -2.4% Norway -7.6%
  3. 20% Denmark 8.2%


What do these stats mean.
If you take a risk, you may lose. If you never take a risk, you will always lose.
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