Remittances to Latin American and Caribbean nations rose 15 percent to 72 billion U.S. dollars in 2006, the Inter-American Development Bank (IADB) announced Sunday, according to reports from Guatemala.

The remittances are mostly from the United States, while Europe is another important source.

Speaking at the IADB governors meeting, Donald Terry, manager of the Bank's Multi-Lateral Investment Fund, estimated that this sum would rise by 9.7 billion dollars this year, and that if current rates of growth are sustained, it would be more than 100 billion by 2010.

However, he said it also reflected the region's economic inability to create income and opportunities for their citizens.

Remittances are a fact of life, and are contributing to poverty reduction in Latin America, although they do not always reach the poorest in the population, he said.

"Remittances are not a panacea, but they help," Terry said, adding that they are substantially more than foreign direct investment in the region.

He said that the Fund was working to channel more remittances through formal financial system, although banks were doing some of this work by reducing charges.

According to IADB figures, Mexico is the top receiver with 23 billion dollars, followed by Brazil with 7.4 billion, and Colombia with 4.2 billion.

Source: Xinhua