The World Bank wants to see dramatic cuts in the cost of remittances as part of its efforts to overcome poverty in the Pacific.
Remittances from Pacific Island communities in Australia and New Zealand to their families are vital parts of the economies of the island countries.
But the World Bank says the transaction costs they face are huge.
Don Wiseman has more:
"The World Bank says financial institutions and money transfer operators are charging fees ranging from 15 to 50 percent, when international best practice is in the range of one to five percent. Senior economist with the World Bank, Dr Manjula Luthria, says these high fees in the Pacific are eroding this income support and run counter to best practice in other parts of the world where transfers have been made more efficient. She says transaction costs between the United States and Mexico have fallen 60 per cent since 1999 as a result of improved regulation, product innovation and stronger competition. The World Bank says agreement has now been reached to make the transfer process in the Pacific more efficient while central banks will change their reporting requirements to improve transparency. Dr Luthria says the Bank is anticipating the roll-out of these initiatives to reduce fees and improve remittance services will occur over the next 12 months."
