Prepared at the request of the Hague Process on Refugees and Migration and the International Organization for Migration, this study highlights the ways in which the development potential of remittances could be most effectively used, while avoiding the possible risks. In doing so, it seeks to help promote a more balanced approach to the issue of remittances and development, which, as indicated above, is now high on the global economic agenda. In focusing attention on the nexus between remittances and development, the study uses a narrowly circumscribed frame of reference. Obviously, remittances cannot be separated from migration; and migration no doubt entails both benefits and costs, which, it is widely recognized, are shared differently both between and within the sending and receiving countries. Remittances are an integral part of the welter of these benefits and costs. However, these latter and much wider issues of migration are not taken up in this short study as they remain outside its scope. Also, even in examining the impact of remittances on development in this limited context, the study essentially deals with migrant-sending developing countries.
Chapter 1 discusses the level of remittances, both formal and informal, and their geographical distribution. It also discerns types and personal characteristics of migrants as remitters.
Chapter 2 examines the various ways in which formal remittances to developing countries can be increased, covering such questions as migrants’ remittance behavior, cost of transfer, effectiveness of incentives and regulatory measures, and the importance of political and macro-economic environments.
Chapter 3 describes the economic and social impacts of remittances, and this is followed by a more critical and relatively detailed appraisal of the development potential of remittances as well as of the possible pitfalls involved.
Chapter 4 provides a critical appraisal of relying on remittances for development including an appraisal of their stability, contribution to growth, inflationary pressures, poverty and inequality, and the weakening of family ties.
Chapter 5 examines the role of three major non-state actors, namely migrants’ associations, the diasporas and the corporate sector.
Chapter 6 sums up the report’s major findings.
Written by Prof. Bimal Ghosh in his capacity of being a member of the Club of The Hague on Refugees and Migration (=Advisory Council to THP), and a co-production with IOM Geneva.