Migrant Money Flow
A $300 Billion Current
People who track remittances have been starved for basic data. It
is difficult to say exactly how much money is flowing and even harder
to say where to, exactly. Sums large and small travel informally,
through the mail or in the care of friends
By JASON DePARLE
Story from The New York Times
The
money crosses borders $200 or $300 at a time. It buys cornmeal and
rice and plaid private school skirts and keeps the landlord at bay.
Globally, the tally is huge: migrants from poor countries send home
about $300 billion a year. That is more than three times the global
total in foreign aid, making "remittances" the main source
of outside money flowing to the developing world.
Surveys show that 80 percent of the money or more is immediately
spent, on food, clothing, housing, education or the occasional beer
party or television set. Still, there are tens of billions available
for savings or investment, in places where capital is scarce. While
remittances have been shown to reduce household poverty, policymakers
are looking to increase the effect on economic growth.
Some migrants, for instance, send home money to savings accounts
at small bank-like microfinance institutions, which use the resulting
capital pool to lend to local enterpreneurs.
People who track remittances have been starved for basic data. It
is difficult to say exactly how much money is flowing and even harder
to say where to, exactly. Sums large and small travel informally,
through the mail or in the care of friends. The World Bank, the main
tally keeper, only counts transfers recorded by central banks. Last
year's sum came to $208 billion. Bank officials estimate that the
total is about 50 percent higher - $300 billion or more.
Recently, the International Fund for Agricultural Development, an
arm of the United Nations, and the Inter-American Development Bank
released a set of numbers culled from additional sources, including
private survey data and records of money-transfer companies. The new
study's estimate of the global total, $301 billion, is about the same
as the World Bank's. But when it comes to specific countries, the
two organizations vary widely.
The Wolrd Bank, capturing central bank data, said southern African
countries received about $1.4 billion in 2006. The new study said
$4.5 billion. The World Bank puts Brazil's intake at $3.5 billion;
the new study reports $7.4 billion. Depending which numbers you use.
Russia received either $3.3 billion (old) or $13.8 billion (new).
The World Bank data has been published annually, while the new study,
part of a larger project, has not been widely reviewed.
By any accounting, the amounts involved are big and flow worldwide:
migration truly is global. The new study found that 60 countries received
$1 billion a year or more last year.
Donald F. Terry, an official at the Inter-American Development Bank,
which helped sponsor the study, has campaigned for years to publicize
the importance of remittances. His policy agenda includes reducing
the costs of sending money and helping migrants open bank accounts,
so they can gain access to mortgages and business loans.
"Putting it out there this way increases the level of policy
interest," Mr.Terry said. "What's stunting is how critical
remittances are in almost every developing country in the world."
(Published: 09.12.2007.)
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