The Development Dimension of Migrant Transfers

How do remittances promote development?
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This paper highlights that remittances have become the most visible evidence and measuring stick for the ties connecting migrants with their societies of origin.

The paper presents a conceptual tool to understand the role of remittances and explains:

  • Monetary remittances: Migrant's earnings sent from the migration destination to the place of origin;
  • Social remittances: Ideas, practices, identities and social capital flowing from receiving to sending country communities;
  • Intra- and international remittances: Remittance by migrants within their countries of origin or across an international border;
  • Individual and collective remittances;
  • Forms of Transfer:
    • Formal: Banks, post offices and money transfer companies;
    • Informal: Hand carried or transferred by family, friends or money couriers.

The paper enlists the development opportunities in the remittance scenario, including:

  • Mobilizing remittance: Depends on a healthy financial system in the host country, along with an enabling economic environment and an adequate basic infrastructure;
  • Enabling monetary remittances through regular banking channels to encourage more productive use;
  • Capitalizing on the macroeconomic dynamics generated by transnational migration;
  • Utilizing Diasporas as development agents by:
    • Increasing interactions and interests at the political level;
    • Granting dual citizenship rights;
    • Enhancing already existing networks for investment, international trade, and tourism.

To conclude, the paper cautions that international development agencies should make sure that their renewed focus on remittances as a development tool does not place additional stress on already vulnerable groups.

About this Publication

By Sorensen, N.