Are remittances pivotal to Guyana's development?

by Tarron Khemraj

Several commentators have recently expressed the view that remittances are important for Guyana’s economic development.  Indeed, one pro-government commentator noted remittances are “pivotal to development” (Misir 2009). Of course, the latter view is not altogether unfounded as there are several cross-country regression studies and reports from international organizations that tend to support that view.  However, I am not convinced by these cross-country studies and will explain why it is misleading to extrapolate the conclusions of these studies to the Guyana context.  I frame my arguments by taking into consideration the underlying structural characteristics of the Guyana economy.  These structures mitigate the long-term positive effects remittances could have in our context.  The key argument of this column is remittances are not pivotal to Guyana’s development but rather are engendered by our perpetual underdevelopment. Read full article here

July 8th, 2009