Discussions are underway at the World Trade Organization (WTO) 2024 Public Forum this week, focusing on reducing remittance costs for developing nations. These talks, which are in their early phases, involve the WTO collaborating with various international organizations, financial institutions, and central banks from developing countries. However, there is a lack of consensus among all WTO members on this issue.
WTO Deputy Director-General Xiangchen Zhang highlighted that several developing nations have put forth proposals to the WTO’s Council for Trade in Services aimed at addressing this matter. He emphasized the significance of remittances, which are a major contributor to GDP growth in these countries.
According to the World Bank, the global average cost of sending remittances stands at 6.35% in the first quarter of 2024, a figure far exceeding the United Nations Sustainable Development Goal target of below 3%. Mr. Zhang pointed out that achieving this target will require collective efforts involving financial institutions and other international organizations.
He stated, “The WTO cannot achieve this goal by ourselves alone. We need to work together with the financial institutions and other international organizations.” Zhang called for increased dialogue, collaboration, technical assistance, transparency, and the incorporation of digital technologies to assist developing nations in lowering remittance costs.
Experts have also been invited to address the challenges faced by developing countries in this respect. However, Mr. Zhang noted that while the discussions are a positive step, they are not enough. He mentioned that the next step will involve submitting the recommendations from the panel discussions to the Committee of Trade in Financial Services to further explore the topic.
He stressed the importance of raising awareness among WTO members and fostering collaboration with organizations such as the International Labour Organization (ILO), the International Organization for Migration, and financial institutions like the World Bank and central banks in developing countries. “There’s no shortcut, but I think it’s a good start,” he said.
In related news, personal remittances account for Fiji’s second-largest source of foreign exchange. In the first quarter of this year, remittances saw a 14.2% increase, totaling $310.5 million compared to $271.8 million during the same period last year.