Remittances: At the Heart of Economic Migration
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June 16 is the International Day of Family Remittances, when we celebrate those private, voluntary international money transfers which do so much for development and poverty-reduction in communities across the world. The World Bank estimates that last year USD 613 billion-worth of remittances were transferred worldwide, out of which USD 426 million went to developing countries.
Remittances play a critical poverty reduction and development role for many countries and communities in the Southeastern, Eastern European and Central Asia region. In fact, three of the top ten most remittance-dependent countries in the world are in the region, with remittances accounting for 35 per cent, 31 per cent, and 20 per cent of GDP in Kyrgyzstan, Tajikistan, and Moldova respectively.
Remittances also serve as a vital lifeline to communities in times of crisis and displacement as we continue to see with the Syrian community in Turkey and elsewhere, and as we have seen most notably in our region with the growth of labour migration out of Ukraine and the correspondent growth of remittances to Ukraine (which have increased from USD 5.8 billion in 2015 to USD 7.9 billion in 2017; an increase of 36% over just two years).
While at the macro level remittances may help governments to shore up foreign reserves, it is important - particularly on the International Day of Family Remittances - to look at the phenomenon from a more human angle. Remittances are deeply personal transactions; a wife sending money to her family so that the children can continue to go to school; a son sending money to his mother so she can receive the healthcare she needs; a husband sending money to his wife so they can continue to build their dream home where they hope to one day live together again.
Within the Sustainable Development Goals, governments have rightly prioritized reducing the costs of remittances so that migrants and their families can keep more of the money they have worked so hard and sacrificed so much to attain.
An equally important – and often ignored – valuable service is to provide financial literacy training and develop financial products that assist migrants and their families to better save and use their earnings towards the achievement of long term development goals. For many recipients of remittances, the funds represent a massive growth (of 500 per cent or even more) in their household budget. This is also often the first time families may be in a position to start saving money.
If my salary magically quintupled overnight, I would have a financial manager helping me make decisions for the long-term benefit of my family; but those services simply don’t exist for households whose salary has increased from USD 200 to USD 1,000.
As the UN Migration Agency, IOM aims to facilitate migration in a way that supports the sustainable development of migrants, their families, and communities of origin. It is our responsibility to develop services and systems not only that allow them to keep more of their earnings, but also that help migrant families to achieve the longer-term goals and dreams that triggered their migration in the first place.