Syndicate content

Migrants and their families must be at the core of any remittance framework

Ashraf El Nour's picture
Remittances are a fundamental part of migration’s positive contribution to development. They represent multidirectional, voluntary, and private international monetary transfers that migrants make, individually or collectively, to people with whom they maintain close links. Out of the $581.6 billion remittances sent by international migrants in 2015, almost 75% were sent to developing countries, representing more than three times the size of foreign aid received by such countries in the same year[i]. 2015 was a landmark year for international cooperation with the adoption of the Sustainable Development Goals (SDGs) and the Addis Ababa Action Agenda. Due to their sheer scale and impact to development, remittances have been garnering more and more attention worldwide. Both frameworks contain commitments relating to migrant remittances, designed primarily to reduce the costs of sending remittances and removing barriers to their effective transfer. However, we need to build on the SDGs to call on governments and other stakeholders to develop a framework with a broad understanding of remittances and related operations embedded within it that puts individual migrants and their families at its core.

Remittances can represent both social and economic opportunities and challenges for senders and recipients. Certain conditions are critical to ensuring that remittances have a primarily positive impact on development. Generally, the remittances discourse highlights issues such as improving the transparency in service provision of remittance transactions, lowering the costs of remittances and improving data related to transaction costs, so that a greater proportion of funds go to migrants and their families. These are central to the commitments in the 2030 Agenda and the Addis outcome. However, while these aspects are important, certain other considerations must also be taken into account to ensure a more nuanced understanding of the link between remittances and development. Remittances have the ability to contribute to beneficiaries’ wellbeing when they are additional, rather than the sole or primary source of income. Remittance flows can be counterproductive to development if governments are not fully engaged into the provision of basic services and functional social security, health and education systems.

Though often forgotten, it is vital to put individual migrants and their families at the core of the remittances discourse – rather than focusing solely on transaction costs - and to remain attentive to the conditions under which remittances are earned, sent and used. Remittances provide great potential to improve recipients’ living conditions but a narrow focus on transaction costs ignores the socio-economic costs that can result from different labour and migratory conditions. A comprehensive approach should consider the implementation of and adherence to fair recruitment practices and decent work conditions, in accordance with international standards. Addressing the links between fair recruitment and the costs of migration, for example, would be an important consideration and is a core component of IOM’s work in the remittances field.

In order to assess the actual costs incurred by migrants, the development of more efficient models is necessary, including detailed information about migrants’ transfer habits, to calculate a weighted average cost of remittances for each corridor. To do this, innovative technology is vital. Good practices should be shared among countries and private sector partners on improved money transfer service provision including through mobile technologies or postal services to increase affordable service options. Once we start not only considering transactional costs but also, social costs and impacts on migrants’ well-beings can we truly achieve a people-centered inclusive remittances framework.  

Ashraf El Nour is the Permanent Observer of the International Organization for Migration to the United Nations and writes here on IOM’s position on remittances.

Add new comment