William Lacy Swing — How migrants who send money home have become a global economic force

by
Mike Norman
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More people are on the move around the world than ever before. An estimated 258 million people are currently living outside their country of origin. Every migrant chooses to leave home for different reasons, but they all bring their life experiences, knowledge, culture and ambitions with them. As they settle into life in their host countries, they acquire new skills and know-how. And they contribute to their families and communities in their country of origin by sending money home.

Financial remittances have been recognized as an important developmental vehicle associated with migration. Financial remittance flows have steadily increased in volume from the 1990s to the present day. In 2017, migrants sent an estimated $466 billion to families in developing countries. Money sent home from abroad is shown to be more stable than both private debt and portfolio equity flows, and several times larger than international development aid.…

However, apart from financial remittances, transnational communities also contribute by way of 'social remittances' - the flow of skills, knowledge, ideas and values that migrants transmit home. The impact of social remittances was most strongly felt in areas such as education, health, employment, business and aspects of governance, found a study conducted by IOM in Tanzania in 2014. There is also a broader development effect, as the recipients of social remittances extend beyond the migrants’ immediate circle of relatives and friends to the wider community beyond.

Taken together, financial and social remittances have an important role to play in the achievement of individual family goals, community and national development priorities, and the achievement of the SDGs more generally. However, to leverage the true development benefits of financial and social remittances, there is still work to be done....