IOM and its partners highlight the impact of migrants’ economic contributions at International Banking Forum
More than one million Azerbaijanis live outside the country, many of them working and providing financial support to their families in Azerbaijan by sending remittances from abroad. This represents an important source of income for households, particularly in rural areas. Remittances significantly contribute to the socioeconomic growth of the country.
According to the data from the Central Bank of the Republic of Azerbaijan, in 2022, the amount of official remittance inflows was three times as much as in 2021 (3.6 billion USD compared to 1.2 billion USD).
IOM, in coordination with the State Migration Service of the Republic of Azerbaijan, implements a project to enhance the socioeconomic benefits of remittances in the country. The initiatives funded by the IOM Development Fund (IDF) aims to contribute to greater financial inclusion and use of digital financial services among Azerbaijani migrants and remittance recipients, located both in Azerbaijan and abroad.
An action plan for improving the legal and regulatory framework is being drafted and training programs on financial inclusion for migrants will be prepared within Central Bank’s financial literacy activities.
During the seventh International Banking Forum, organized by the Azerbaijan Banks Association and Central Bank of Azerbaijan, IOM ran a panel on remittances and the financial Inclusion of migrants. It aimed to highlight the socio-economic benefits of remittances, the importance of migrants’ economic contributions to their families back home, and to explore ways to maximize these benefits jointly with the private sector.
At the panel, moderated by Mr. Hurshid Rustamov, economist of the UN Resident Coordinator’s Office in Azerbaijan, it was noted that the importance of migrants’ economic contributions to their families back home is now more important than ever, especially for low- and middle-income countries (LMICs).
Ms. Maria Bassermann, project officer at the IOM Regional Office in Vienna, noted that the total amount of remittances received in South-Eastern, Eastern Europe and Central Asia region last year was USD 72 billion, on average 11 per cent of national GDP.
In low- and middle-income countries, remittances and migrants’ savings exceed overseas development assistance (ODA) to these countries 5 times. Furthermore, Ms. Bassermann stated that “to increase the positive impact of remittances for development, a focus needs to be put on improving migrant decision-making in sending remittances, reducing costs of sending remittances, enhancing financial Inclusion of migrants and remittance recipients.”
Mr. Elvin Afandi, Head of Corporate Strategy & Research of the Islamic Corporation for the Development of the Private Sector, highlighted contribution of digitalization of remittances to enhancing financial inclusion of migrants and their families. Mr. Matthieu de Heering, Head of Russia, Central Asia and Caucasus at the SWIFT, presented regional perspective on cross-border low-value payments.
A recording of the IOM-organized panel discussion can be fouind at IOM organized panel discussion at the 7th International Banking Forum held in Baku - YouTube
For more information on remittances and Azerbaijan, refer to the IOM assessment report “Digital Remittances in Post-pandemic Azerbaijan: Supply- and Demand-side Analysis.”