The Walls Between Remittances and the People Who Need Them
Sharing Ideas to Facilitate Money Transfers
In 2016, remittances (money migrants send home) to developing countries totalled 429 Billion USD. Increasingly recognized as a powerful engine for development, remittances are more consistent and reliable than other sources of financing because they usually reach individuals and are dispersed directly to local economies through a diverse network for a wide range of purposes.
Since 2015, the ACP-EU Migration Action (implemented by IOM) has proudly worked with governments, regional economic communities, and non-state actors on 21 projects aimed at improving remittances flows throughout the African, Caribbean and Pacific (ACP) states. In addition to these on-demand Technical Assistance projects, the Action held a Peer to Peer meeting in the fall of 2016 that brought together a diversity of stakeholders from across the three regions to discuss challenges, approaches and best practices for managing remittances. Later that year, the Action published a report that identified six key challenges that are applicable across the ACP regions and proposed nine concrete recommendations that can be easily implemented, including:
1- Improve domestic payment infrastructure and access, particularly in relation to new technologies
2- Improve irregular migrants access to formal remittance channels
Following the launch of the report, at this year’s European Development Days (EDD17), IOM, the UN Migration Agency, and the International Fund for Agricultural Development (IFAD) held a joint session to brainstorm on ideas for “Remittances and Development in the ACP-EU Dialogue”.
The session was focused on three main questions:
1. How to reduce the costs of sending remittances?
2. How to increase access to receiving remittances?
3. What are the impacts of remittance flows for communities?
Professionals and experts from a wide variety of backgrounds attended the meeting, many of whom had sent money home themselves, offering a rare opportunity to catalyze rich discussions on these topics. The session brought to light interesting trends and new information about the practicalities of sending, receiving and using remittances.
The session was considered both novel and useful because it provided an enabling environment where all participants could learn from each other. Now, over a month after the EDD17, and with the aim to take the gathered knowledge beyond the brainstorming session, IOM will be launching a series of three short publications sharing the highlights of this session. The aim is to take the discussion outside the EDD context by inviting you to share your thoughts in the comments section of the post. Please respond to the challenges and recommendations, or share your own insights and experiences on this topic. The first post will look at ways to overcome the inefficient and costly reliance on cash as the number one method for transmitting remittances. Another post will look at how to maximize the productive use of remittances. And the third post will look at the positive and negative impacts of remittances for communities, and how these can be managed. Stay tuned for more in the coming days.
This is just one of the many ways the Action offers opportunities and insights for strengthening migration and development. The Action’s diversified access means it has a unique capacity to identify and map trends and influence outcomes, which makes it a powerful tool for forecasting within the ACP regions and beyond. By feeding the findings into the larger ACP-EU dialogue, the recommendations have the ability to impact some of the most remittance-dependent States in the world.
The recommendations emerging from the Action’s work can be leveraged to transcend national interests and regional constraints and adapted to work globally making them relevant and central to the realization of the Sustainable Development Goals (SDGs). By reducing the transactional costs of remittance transfer to 3 percent (SDG 10.7C), we can transfer an additional 32 Billon USD to the people who it was always destined for. The clear recommendations produced through the work of the Action, easily adapted to any context worldwide, are a first step in providing practical tools that will reduce the cost of sending money home. The first post, available today, will address the “Stickiness of Cash”. Please join us in seeking solutions to this worldwide problem.
This article is written by Mathieu Jacques, programme manager of the ACP-EU Migration Action. It introduces a three-part series on remittances and the path to SDG 10.7. Pt. I is Conquering the High Cost of Remittances: 9 Easy Steps. Pt. II is Rethinking Remittances: How We Get Them, How We Use Them and pt. III is Remittances in Receiving Communities: How to Reap Their Value.
