Tuesday, 5 April 2011

American dream hit by dollar’s decline.

Migrant workers are choosing to move to Europe, Australia or Canada rather than the US in order to protect the purchasing power of the money they send home to their families, according to one of the world’s leading experts on remittances.

The shift is a result of sharp falls in the value of the US dollar against other international currencies, many of which have been boosted by the rise in commodity prices.

“We are seeing workers from Bangladesh, Nepal and especially the Philippines choosing destinations where they’ll get paid in stronger currencies,” Dilip Ratha, head of the World Bank’s remittances and migration unit, told the Financial Times.

Mr Ratha said the trend was especially notable among skilled workers, such as doctors, nurses and information technology specialists.

In its most recent analysis of remittance trends, published at the end of last year, the bank said the slowdown in the US economy had depressed the growth of remittance flows to Mexico and some other Latin American economies.

Recent evidence from Brazil shows a similar preference for Europe and Canada, even among unskilled workers. Migrant workers from Brazil have been especially affected as the country’s own currency, the real, has nearly doubled in value against the dollar since early 2003.

In a survey of 200 migrants who had recently returned to the Brazilian city of Governador Valadares, local sociologist Sueli Siqueira found that 28 per cent planned to migrate again but this time to Europe or Canada.

Mr Ratha argues that much of the recent increase in remittances in many countries has been due to efforts by migrant workers to protect the purchasing power of their families at home, in the face of inflation and local currency appreciation.

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