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  • Reply to: Why taxing remittances is a bad idea   1 day 14 hours ago

    Thanks for your comment, Kaushik. Typically the officially recorded data on remittances tend to underestimate the true size, among other reasons, due to the difficulties of measuring flows through informal channels. When the cost of sending money Is high, or difficult due to exchange controls imposed by the governments on either side, migrants are forced to use informal channels. A discussion of the definitions, methods and pitfalls of measuring remittances can be found on page viii of the Migration and Remittances Factbook 2016. Kindly see link: https://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1199807908806/4549025-1450455807487/Factbookpart1.pdf.

  • Reply to: Why taxing remittances is a bad idea   3 days 7 hours ago

    Dear Mr. Ratha,

    I follow your reports on remittances furnished on the WB website and for anyone working in this industry, it has always remained our Bible. Was curious to understand one thing though, when you mention that remittances to India in 2015 was $71 bn, are all of it family remittances? because today there are not even formal channels to send money from countries like Bangladesh, Pakistan and Sri Lanka to India which constitutes a major chunk of the $71 bn.

    Look forward to you hearing from you. You may reach out to me on my email kaushik_ghosh_1983@yahoo.co.in or IM me on my LinkedIn (we are connected).

    thanks,
    Kaushik

  • Reply to: Why taxing remittances is a bad idea   5 days 16 hours ago

    Informative note Dilip, I enjoyed reading it!
    As micro-transfers international remittances have transformative potential. In burdening remittances through taxation, governments impede rather than leverage their potential. In fact, policy should recognize the productive possibilities of stable and timely household monetary flows. It can magnify its use in spurring growth in lagging regions, fostering spatially balanced job-creation, and unlocking latent entrepreneurship capacity in family members who are left behind.

  • Reply to: Digital Remittances and Global Financial Health   1 week 6 days ago

    The foreign exchange conversion costs are where the pricing becomes too hard to assess, particularly as banks and operators such as PayPal have been increasing their margins, rather than reducing them. (A recently announced increase - to a 3% margin - by PayPal still is lower than major banks which have increased margins to around 5%).
    So, part of the answer is to collect all remittances into a domestic clearing service, rather than do individual FX conversions. This has a considerable extra value in lowering transfer fees as well; a domestic ACH is a few cents (if anything) as against at least $10 for international wires.
    Linking personal donations, charitable support and family remittances - along with payroll deductions - can reduce costs on the sending side by a large amount. At a time when there is increasing pressure on aid, both by reductions of support in North America and Western Europe, as well as increases in need, with 65 million in grave danger, we need to work together to optimize the value of the funds.
    The FATF guidelines give clear help as to how to ensure such funds do not go to enable criminal networks, as well as what limits can be established for family remittances to be permitted - as long as there is confirmed ID of both parties and ongoing real time auditing to avoid any repetitive flows that exceed stated limits.
    Managing this through a domestic clearing format is already available as a technology, meaning the only requirement is to register the parties in a reliable manner. While there can be various ways to do this, the proven usage of iris scanning by UNHCR and WFP is perhaps the most obvious methodology for this.
    Working with recipient countries on domestic settlements through established debit networks is the same factor. The linkage of secure biometric IDs for recipients of remittances with local ID services to support education and health (as well as national ID requirements) is already happening, or being studied in many parts of the world.
    Linking all of this with offsetting currency flows for eCommerce and other approved hard currency purchases, is also under way. This then incorporates the other new trend for real time VAT collection in the buyer country.
    In summation, the time is right for digital solutions to change the whole dialog for personal support programs; lowering the cost of remittances to below 3% is now technologically available, increasing its value by up to $25 billion pa.

  • Reply to: Remittance reality: Getting to 3% and beyond   2 weeks 4 days ago

    Hi Michael,

    This might interest you.
    Remittance down to 3% for migrants between Thailand and Myanmar on Blockchain.

    Everex One ran a successful pilot in summer 2016.
    www.everex.one

    I would be delighted to providing more information.