…if successfully passed
BY SAMUEL SUKHNANDAN
Minister, Dr Henry Jeffrey
Guyanese dependent on foreign financial support have reasons to fear that the United States (US) congress may make an amendment to the US Electronic Fund Transfer Act to impose a fee for remittance transfers to certain foreign countries, South of the US, including Guyana.
The bill, which is titled Border Wall Funding Act of 2017 (HR 1813), has already been introduced in the US House of Representatives by Congressman Mike Rogers, of Alabama’s 3rd Congressional District.
In introducing the Bill on March 30, 2017, Rogers claimed that remittances are normally used by illegal immigrants to move money from the US to their home countries.
In order to put a restriction on this, Rogers said the Bill will seek to allow for a two per cent fee charged on individuals sending money to recipients in 42 countries in Latin America and the Caribbean.
In providing his interpretation of the issue, former Foreign Affairs Minister, Dr Henry Jeffrey told Guyana Times International during an interview, that if successful, the Bill will cause severe problems not only in Guyana, but the wider Caribbean and Latin American region.
“In the case of Guyana, we can lose somewhere between G$25-40 million and that’s a lot of money for a small country for ours,” Dr Jeffrey stated, explaining that regardless of the circumstances, people will find other means by which to send finances to their home country.
The former Minister pointed out; however, that there are mechanisms in which the matter could be discussed with the US before any such laws are passed.
Dr Jeffrey made reference to the Caribbean Community (Caricom) Trade and Investment Agreement with the US, explaining that through that agreement, the Caribbean has been recognised as small and vulnerable economies, and the need for the Region to be given special treatment is reinforced.
He suggested that Caricom member states, including Guyana, use that mechanism to address the issue before it comes into effect. But if that doesn’t bear fruit, Dr Jeffrey said Guyana also has the advantage of joining the wider region to advance its interest and ensure that its concerns are heard.
“I have had a look at the statements made by Caricom, but they are all generalised statements where it says, it will have a Region-wide stance on the issue,” he added.
While recognising that this Bill has the potential to cause Guyana to lose investment, Dr Jeffrey told this newspaper it is a “complicated matter” which should be looked at and addressed collectively. While Government has not made any statements on the issue nor provided an analysis of the possible impact it might have on the country’s economy, Dr Jeffrey is urging the Government to work to ensure that they do. He thinks also that Guyana should press for activation of the Caricom council and work within it.
Different perspective
This publication also spoke with a Guyana-born financial analyst who had a different opinion on the issue. Sasenarine Singh claimed that the tax will ensure that millennial who are now having better jobs than their parents, will divert their money away from the remittance trade into “actual bricks and mortar investments in the Guyanese Diaspora.”
According to Singh, the proposed tax will make the decision easier for those in the Diaspora who do not want to work in the black market, to not send money to Guyana.
“The United States where the biggest Guyanese Diaspora communities reside, is still recovering from the economic slump, although 2017 will be a good year for the US economy. So the Guyanese community who has delayed investments in the new cars and new houses are making that investment in larger numbers in 2017, leaving less for the relatives in their motherland,” he added.
Besides these issues, hundreds of Guyanese still depend on remittances for their upkeep.
Remittances contributed to 11.2 per cent of Guyana’s Gross Domestic Product in 2016, a decline from 14 per cent in 2015. This was a result mainly because net current transfers decreased by 23.1 per cent or US$95 million over 2016 reflected a drastic reduction of workers remittance from abroad into Guyana.
Guyana is just a drop in the global remittance trade which in 2016 was pegged at US$441,000 million; Guyana received in 2016 only US$320 million of that amount.
The largest destination for remittances from the US is Mexico, which Pew Research estimates was equal to US$24 billion in 2015.
