Banks and breweries
| AN OUTSIDERS VIEW |
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| Ken Fuller |
Just after Christmas, this outsider received an e-mail from avaaz.org, the online campaigning organization, regarding the transmission costs of overseas remittances. The example given was of a Kenyan student in the Netherlands who sent his year’s savings back to his family in time for the holidays, only to find that Western Union took 20 percent of the total in fees.
Avaaz is therefore organizing a petition to pressure Western Union to reduce its transaction costs to 5 percent, the maximum recommended by the World Bank. Acorn International, which also campaigns for lower transfer fees, says that for every $100 remitted to the Philippines via Western Union, $12 goes in transfer fees, and another $2 is lost as a foreign exchange rate charge. According to a report by Associated Press, by the way, Western Union’s CEO saw her income treble in 2009 – to $8.1 million.
There can be no doubt that foreign remittances are big business for the banks and money transfer companies. The World Bank (remittanceprices.worldbank.org) says that such remittances added up to $414 billion in 2009, $316 billion of which went to developing countries, involving 192 million people (migrants and their families) — some 3 percent of the world’s population.
Avaaz, meanwhile, estimates that in the same year some $44.3 billion was “lost” in fees charged by banks and outfits like Western Union..... MORE
Source: The Daily Tribune
URL: http://www.tribuneonline.org/commentary/20110111com5.html
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