Remittances

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Image:Remittance advert Oxford Street London 20060909 KaihsuTai.jpg

Remittances are transfers of money by foreign workers to their home countries. The World Bank officially estimates that migrants from developing countries in developed countries sent home more than $223 billion to their families in developing countries in 2005 – a figure more than twice the level of international aid. Remittances are playing an increasing larger role in the economies of many countries. (Remittance also refers to the accounting concept of a monetary payment transferred by a customer to a business.)

In Latin America and the Caribbean remittances play an important role in the economy of the region. In the region, remittances have overtaken the combined sum of Foreign direct investment and official development aid in terms of dollar value. Remittances also account for more than 10% of GDP in six Latin American and Caribbean countries and exceed the dollar flows of the largest export in almost every country in the region.

Globally, remittances contribute to economic growth and to the livelihoods of needy people. Moreover, remittance transfers can also promote access to financial services for the sender and recipient.

Early research on the effect of remittances in particular countries include Richard P.C. Brown's "Public Debt and Private Wealth. Debt, capital flight and the IMF in Sudan" (1992) Basingstoke: Macmillan.

In 2004 the G8 met and decided to take action in lowering the costs for migrant workers who send money back to their friends and families in their country of origin. In light of this, various G8 government developmental organisations, such as the UK government's DFID [1] and USAID [2] who have conducted a number of in-depth surveys concerning remittances to the developing world with the ultimate goal of lowering costs to senders of money and thus increasing the amount of monies received.

In response to this, the DFID remittances project -'Sending money home?'[3]- , has gathered useful information for senders of money from the UK to currently Albania, Bangladesh, China, Ethiopia, Ghana, India, Jamaica, Kenya, Nigeria, Rwanda, Serbia, South Africa and Ukraine. In addition, the project now covers remittance corridors from outside the UK which include: Austria, Germany, Greece, Italy and Switzerland to Albania and Serbia and South Africa to Botswana, Lesotho, Mozambique, Namibia and Swaziland. This information can be accessed by visiting the dedicated web site.[4]

The World Bank has a webpage for remittances [5], and the World Bank and the Bank for International Settlements [6] have developed international standards for remittance services [7].

The Inter American Development Bank's Multilateral Investment Fund has carried out extensive work on the topic of migrant remittances, particularly with regards to Central and South America. All IDB[8] remittances info can be found at the MIF's remittance portal[9]. Remittances to Latin America from all parts of the world are estimated at $60 billion in 2006. About 75% of these remittances come from the United States.

Examples of remittances include: