Discussions are underway at the World Trade Organization (WTO) 2024 Public Forum this week, focusing on reducing remittance costs for developing countries. Although these talks are in the early stages involving the WTO and various international organizations, there is a divergence of views among WTO members.
WTO Deputy Director-General Xiangchen Zhang noted that several developing nations have put forward proposals to the WTO’s Council for Trade in Services regarding this matter. He emphasized that addressing remittance costs is critical for developing countries as it significantly contributes to their overall GDP growth.
According to the World Bank, the global average cost of remittance stood at 6.35 percent in the first quarter of 2024, which significantly exceeds the United Nations Sustainable Development Goal (SDG) target of below three percent. Zhang highlighted that collaboration with financial institutions and other international organizations is necessary to achieve this goal.
He remarked on the importance of enhanced discussions, collaboration, technical assistance, transparency, and the use of digital technology to help reduce remittance costs for developing nations. Experts have been invited to shed light on the challenges faced by these countries in this regard.
Zhang stated that while the insights gained from the panel discussions at the forum are valuable, they are not enough. The next steps will include submitting the panel’s recommendations to the Committee of Trade in Financial Services to further examine the issue.
He called for raising awareness among WTO members and collaborating with organizations like the International Labour Organization (ILO) and the International Organization for Migration (IOM), as well as financial institutions such as the World Bank and central banks of developing countries, to determine effective strategies for advancing this issue. Zhang acknowledged that while there is no quick solution, the ongoing discussions are a positive beginning.
He concluded by emphasizing that there needs to be more transparency, increased competition, greater use of digital technology, more technical assistance, and enhanced collaboration in addressing remittance costs.
In Fiji, personal remittances represent the second-largest source of foreign exchange, having increased by 14.2 percent to $310.5 million in the first quarter of this year compared to $271.8 million during the same period last year.