The Role of Remittances in Crisis: An Aceh Research Study

How do remittances help households cope with crises?
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This paper studies the role of migrant remittances in the livelihoods of the people of Aceh in a post-disaster scenario. It focuses on funds sent by Acehnese migrant workers located in Malaysia and Singapore.

Aceh was hit by two earthquakes and one tsunami in the period between December 2004 and March 2005. The study uses data from interviews with migrant workers, their families, migrant worker union organizers and community leaders to explore how remittances helped families manage the crisis. Findings indicate that:

  • Remittance flows, formal and informal channels were severely affected in the first three months of the emergency;
  • Alternative distribution channels and emergency assistance were needed to help families cope;
  • Banks for remittances and infrastructure were destroyed or severely damaged.
  • Remittances started to recover by February–-March 2005;
  • Migrant workers were returning to Aceh bearing money and gifts by mid-2005;
  • Formal and informal remittance systems were operating at high capacities and families were using aid assistance and remittances in a complementary manner by the end of 2005.

Finally, the paper outlines study implications for initial emergency relief programming and further needs assessments.