News / Economy

Remittances High on Radar of World Economists

Remittances High on Radar of World Economistsi
X
Laurel Bowman
June 10, 2014 8:48 PM
Many migrants send small amounts of money - called "remittances" - home to friends and family members. But with 200 million international migrants out there, those small sums add up quickly. In 2013, migrants around the world sent back $400 billion, far outweighing official aid to many countries and sometimes providing the largest source of foreign exchange. This has economists wondering - can remittances boost not just a receiving family’s budget but their country's economy too? VOA's Laurel Bowman has more.
Laurel Bowman
Many migrants send small amounts of money - called "remittances" - home to friends and family members. But with 200 million international migrants out there, those small sums add up quickly.

In 2013, migrants around the world sent back $400 billion, far outweighing official aid to many countries and sometimes providing the largest source of foreign exchange.  This has economists wondering - can remittances boost not just a receiving family’s budget but that country’s economy too?

When Jean Claude Kazadi and his wife Myriam came to the U.S. from the Democratic Republic of Congo they immediately began sending money home.  They wanted to help family members left behind.
 
“That is the way we grew up.  We believe in supporting each other.  We believe in supporting our parents, specifically, and we believe in supporting our brothers and sisters.”
 
Jean Claude is a doctor who works on HIV Aids for Catholic Relief Services in Maryland.  He frequently visits Congo, and says he hopes he is helping his fellow Africans through his work.  But he knows that the $400 a month he sends home to his parents are a lifeline.
 
“If we don’t do something, do you think the government will actually do something to support my parents? They will not. They don’t care about it.”
 
Economist Adolfo Barajas of the International Monetary Fund (IMF) has been studying remittance trends for a decade, watching how they affect receiving economies. 
 
“They have been growing tremendously from 1990 to 2010; they grew more than sevenfold,” says he.
 
Barajas says massive migration drives the trend, but notes a possible downside - that governments may be less efficient if they are receiving large windfalls of cash.
 
Economists have long said that remittances generally strengthen the families who receive them, by boosting their income.  But some are concerned that all this cash can cause a nation’s currency to appreciate, bidding up prices and making that country less competitive when it comes to, for example, exporting goods.
 
But economists, including Barajas, agree remittances affect a receiving country’s economy in many positive ways.  Dilip Ratha, is a remittance expert with the World Bank. 
 
“They provide incomes, they are a lifeline for people, they reduce poverty, they provide funding for business investment, human capital investments, education, health,” says Ratha.
 
Economists say that when countries are in conflict, like Jean Claude and Myriam’s  Democratic Republic of Congo, private investors tend to sneak out, while remitters rush in.
 
"Because that is precisely when the needs of the families left behind increase.  And to meet those needs, migrants send money home,” says Ratha.

For Myriam and Jean Claude Kazadi, it’s about showing their parents they have not forgotten them, even though they live so far away.

You May Like

At Khmer Rouge Court, Long-Awaited Verdict Approaches

First phase of trial, which is coming to an end, has focused on forced exodus of Phnom Penh in 1975 - and now many are hopeful justice will be served More

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities More

Video Information War Rages Alongside Real One in Ukraine

Downing of Malaysian airliner, allegations of cross-border shelling move information war in war-torn country to a new level More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Information War Rages Alongside Real One in Ukrainei
X
Al Pessin
July 31, 2014 8:13 PM
The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.