Discussions are underway at the World Trade Organization (WTO) 2024 Public Forum this week, focusing on reducing remittance costs for developing nations.
While these discussions are in the early stages, involving the WTO alongside various international entities, financial institutions, and central banks from developing countries, not all WTO members agree on the approach.
WTO Deputy Director-General Xiangchen Zhang indicated that several developing nations have submitted proposals to the WTO’s Council for Trade in Services aimed at addressing this issue, which is crucial for their overall GDP growth.
According to the World Bank, the global average remittance cost stood at 6.35% in the first quarter of 2024, a significant margin above the UN Sustainable Development Goal target of under 3%.
“The WTO cannot achieve this goal alone. We must collaborate with financial institutions and other international organizations,” Zhang stated. He emphasized the need for increased discussions, collaboration, technical assistance, transparency, and the integration of digital technologies to help developing nations lower remittance costs.
Experts were invited to share insights on the challenges faced by these countries regarding remittance fees. Zhang acknowledged that their input was valuable but called for further action.
“The next step will involve submitting recommendations from the panel discussions at the forum to the Committee of Trade in Financial Services to enhance the dialogue on this matter,” he noted. “Raising awareness among WTO members is vital, along with partnerships with organizations such as the International Labour Organization (ILO) and the International Organization for Migration, as well as financial institutions like the World Bank and the central banks of developing nations to determine the best path forward. While there are no shortcuts, this represents a strong initial move.”
He concluded by highlighting the need for improved transparency, competition, digital technology, technical assistance, and collaboration based on insights gained from the panel discussions.
In Fiji, personal remittances rank as the second-largest source of foreign exchange, with the first quarter of this year showing a 14.2% increase to $310.5 million, up from $271.8 million during the same period last year.