Cash crash

Banks put stop to money transfers

AS governments begin to squeeze out the financial supporters of global terrorism and put pressure on drug traffickers, the innocent have been caught in the crossfire.

Millions of people worldwide and thousands from the Pacific have become collateral damage as restrictive State policies force banks to turn away from money transfers and remittances. Money from islanders living and working in New Zealand, Australia, the United States and to a lesser extent the United Kingdom has become the lifeblood of many Pacific families.

The International Monetary Fund says remittances are large and have grown substantially over the past decade in the region, consistent with experiences in many other developing countries. The increases for the Pacific island countries are a reflection of increased migration due to low growth in real GDP at home, cutbacks in public sector employment, and little progress in creating a more favorable climate for private sector activity.

Strong growth in Australia, New Zealand and the United States has meant that increasingly more islanders seek work in those countries from where they send money home – usually through low cost transfer services.

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