ARSfinalreport CM

APPLIED RESEARCH SEMINAR

Remittances to Africa: money for (mother)land?

Research Project in Collaboration with the International Organization for Migration

Astrid Carruet Catarina Mastellaro Serena Mithbaokar

Date of Submission: 23.12.2014

Institut de Hautes Études Internationales et du Développement Graduate Institute of International and Development Studies

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2 . Executive summary In 2013, a total of 404 billion USD were

sent as remittances to developing

countries. This is more than twice the

amount of official development assistance

to these countries. Remittances, the

portion of migrant workers’ earnings sent

home to their families, have been a critical

means of financial support for decades.

Migrants are indeed increasingly seen as

actors that provide benefits to their

countries of origin. According to the World

Bank and other international organizations,

these benefits are recognized as directly

promoting economic development in the

country of origin.

Within this mindset, the International

Organization for Migration (IOM)

headquartered in Geneva, requested us to

carry out this research project.

The above-explained assumption is the

underlying hypothesis in this report.

Through qualitative research, we have put

into perspective the widely accepted

development-migration nexus and have

provided answers to the following

question: are remittances really promoting

economic development in the countries of

origin?

The qualitative research was based on 10

in-depth interviews with migrants from

West Africa, Eritrea, Ethiopia and the

Democratic Republic of Congo (DRC)

living in Geneva. Carrying out qualitative

interviews enabled us to identify the gaps

in the migration-development nexus

literature and allowed us to concentrate on

an aspect that had been less researched in

the academic world: the role that social

networks play in determining how, for what

reason, and why individuals remit.

Based on the literature review and the 10

interviews, we have come up with the

following main findings:

§ We are able to support the

development-migration nexus,

but it is important to note that

it is not just manifested in

economical and development

terms: remittances also

contribute to human

development at the household

level through consumption

smoothing;

§ When it comes to the role of

social networks, we have

found that remittances are not

unilateral (from the host

country to the country of

origin). Migrants detain

kinship networks beyond their

home countries: remittances

are thus distributed

multi laterally to different parts

of the world;

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§ Along these lines, the

expectations of family

members in home countries

and abroad affect the amount

and frequency of remittances

sending;

§ Finally, and maybe the most

surprising finding of all, the

costs associated to sending

back money are not the most

important determinants in the

decision-making process of

sending back remittances.

Following these conclusions, we have

come up with two main recommendations

for the IOM:

§ First of all, in order to fully

take advantage from the

benefits of remittances in the

home countries, the IOM

should continue to promote

financial development in these

countries.

§ Second of all, it is important

to not overestimate the

economic impact of

remittances on promoting

development in migrants’

home countries.

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3 . Acknowledgments

We would like to thank all the interviewees who agreed to talk to us for their valuable inputs

and interesting stories. We would also like to thank both Olivier Ferrari and Tauhid Pasha

from the IOM for their support and professors Christophe Gironde and Alessandro Monsutti

for their guidance. We also thank Claudie Fioroni and Christina Atekmangoh who have made

important contributions to our research methodology and mainly to our interview guidelines.

Finally, we would like to thank our colleagues Elodie Vieux and Regina Hammond for putting

us in contact with some of the interviewees.

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4. Table of contents

1. Title page……………………………………………………………………………………………1

2. Executive Summary…………………………………….…………………………………………..2

3. Acknowledgments………………………………………………………………………………….4

4. Table of Contents…………………………………………………………………………………..5

5. List of Acronyms…………………………………………………………….………………………7

6. Introduction………………………………………………………………………………………….8

6.1 Research Questions……………………………………………………………………..9

6.2 Hypotheses……………………………………………………………..………………10

7. Literature Review………………………………………………………………………………….12

7.1 Migration-Development Nexus…….…………………………………………………12

7.2 Reasons to remit………………………………………………………………………..15

7.3 Kinship Networks………………………...………………………...…………….........18

8. Methodology…………………………………………………………………...………………….16

8.1 Selection of case “African migrants in Geneva”……………………………………..21

8.2 Site visits……………………………………………………..……………………………21

8.3 Sampling methodology/Selection of interviewees…………………………………..22

8.4 Interview methodology…………………………………………………………….……24

8.5 Challenges and limitations faced during interviews…….…………………………...25

8.6 Transcribing and coding of interviews, analysis……………………..……………….25

9. Results………………………………………………………………………..……………………..26

9.1 Reasons to remit in order of frequency……………..…………………………………26

9.1.1 Help family meet basic needs………………………………………………26

9.1.2 Moral (and social) obligation to remit……………………………………...27

9.1.3 Contribute to education……………………………………………………..28

9.1.4 Building a house……………………………….……………………………..28

9.1.5 Start a new business…………………………..……………………………...28

9.1.6 Remittances to support long-distance relationship ……………………...28

9.2 Costs of remittances and cost of living in Africa…………………………..………….29

9.3 Flows and networks…………………………………………………..………………….30

9.4 Means of sending remittances……………………………………………….………...31

9.5 Remittances are adjusted based on the situation of the family back home………33

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9.6 Complex management of expectations among family members….….………........33

9.7 The important role played by the migrants’ social networks……….……………….33

9.8 Building relationships in Geneva……………….………………………………….…...34

9.9 Investments in Africa and the intention to return…………………….…………...….35

10. Conclusion………………………………………………………………………………….........37

11. Recommendations………………………………………………………………………………39

12. Bibliography…………...………………………………………………………………………...41

13. Annexes……..……………………………………………..…………………………………….45

13.1 Interview Guidelines………………………………………………………………….45

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5 . List of Acronyms

ARS - Applied Research Seminar

DRC - Democratic Republic of Congo

IOM - International Organization for Migration

MTO - Money Transfer Operators

ODA - Official Development Assistance

OECD - Organization for Economic Cooperation and Development

UNCTAD - United Nations Conference on Trade and Development

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6 . Introduction

According to the United Nations, more

than 232 million people live outside their

countries of birth (UNDESA 2013).

Increasing globalization has not only

increased international migration but has

also made it more complex, with most

scholars now recognizing that migrants

maintain various kinds of ties to their

homelands while getting involved with the

host country community (Levitt and

Jaworsky 2007). Within this perspective,

many studies have focused on remittances

(and other transactions) from migrants to

their families and friends as an important

part of the migration experience.

In 2013, remittances to developing

countries were more than three times

larger than official development assistance

(ODA) and, according to the World Bank

they are projected to grow by 5% to reach

US$435 billion in 2014 (World Bank 2014).

Given this scenario, in recent discussions

within the migration and development

nexus, migrants are increasingly seen as

possessing the potential to provide

benefits (mainly in terms of economic

development) to their countries of origin

and many international organizations

(World Bank 2014, UNCTAD 2013) have

been pushing for the reduction of the

transaction costs of remittances in order to

increase its benefits and contribution for

development.

Within this perspective, the International

Organization for Migration (IOM), the

leading inter-governmental organization in

the field of migration, requested us to

carry out our applied research project on

the "Actors, Technical Means and Costs of

Remittances’ Transfers to Africa". Most

existing literature on remittances uses the

case of Asian migrants, particularly India

and the Philippines, but both data and

scholarly literature on migrants from Africa

is quite limited. As such, the IOM

requested us to focus specifically on

African migrants living in Geneva. Upon

conducting some preliminary research, we

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adapted the scope of our initial research to

focus less on the costs and the means of

remittances' transfers and more on the

conditions under which people remit, and

what role do migrants’ networks play in

affecting the decision to send remittances,

in order to fully evaluate theories on the

migration-development nexus. In this

sense, we also tried to understand the role

that social networks play in terms of

constraints on migrants and some of the

social determinants that drive the sending

of remittances. We define migrant social

networks as the interpersonal ties based

on kinship and friendship that connect

them in their places of origin and

destination (Poros 2011).

It is worth mentioning that remittances do

not necessarily need to be in the form of

money transfers, but they could also be in

the form of gifts sent and in terms of the

"obligation" to host and take care of a

family member who migrates to the same

place.

Our interviews will show that social

dimensions matter. We believe that our

findings can contribute to shed some light

on the importance of conducting

qualitative research in the areas of

migration and remittances and on the

need to contrast and complement the

results of studies that are being promoted

by some international institutions and that

are mainly based on quantitative data

analysis. This research contributes to the

existing literature on migration by offering

empirical evidence on remittances and the

transnational networks of migrants. Such

data cannot be captured in simple surveys,

and we hope that the richness of

qualitative findings will contribute to IOM’s

actions and policy recommendations to

governments.

6.1 Research questions

How is the migration-development

nexus manifested in reality? Is it in

purely economic terms as claimed?

Under which conditions do people

send remittances?

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§ What is the role that social

networks play in terms of

constraints on migrants?

§ What are the social

determinants affecting

remittances sending?

§ Is there a moral obligation to

remit?

6.2 Hypotheses

We hypothesize two motivations behind

migrants’ decisions to send remittances.

§ One hypothesis is that

migrants are sending money

for mainly economic reasons,

in order to compensate for the

investment made by their

families in helping them

immigrate and/or for not

being around with the family

of origin. (Lucas & Stark,

1985). Remittances in this case

could also be a self-interested

long-term investment of the

migrant in assets back home in

the cases where the migrants

are will ing to return home in

the future.

§ The second possible

explanation is that migrants

are sending remittances

because of what we would call

a "moral obligation to remit".

Under this term, we include

fi l ial piety as a moral

obligation to remit (or simply,

moral obligation towards

one’s family of origin), moral

obligation towards other

extended family networks and

friends, social pressure from

other migrants who also send

remittances back home, as

well as to other kin who may

not necessarily be in their

home countries. In this sense,

sending remittances would

indicate that migrants care

about their loved ones and

thus they would not

necessarily just send money

"back home" for those who

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stayed but also for siblings

and other relatives that are

not necessarily in their home

countries but elsewhere

abroad. Within this

hypothesis, there should be

very strong social

determinants affecting the

remittances sending process,

the amount of the money sent,

and the frequency of sending

remittances. It could even be

the case that migrants remit

because they are afraid of

possible moral and even

supernatural sanctions in case

they do not send remittances

to those they feel obliged to.

Both economic and sociological research

has looked at remittance behavior and

migrant networks. In this report, we will

first review the current state of research

related to our hypothesis and identify how

our research will contribute to filling

theoretical gaps on this topic. Following

the literature review, we will discuss our

case selection, the methodology of our

research, results, conclusions and the

policy recommendations that follow from

our results and conclusions.

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7. Literature Review

In this section, we review the literature

concerning migration, development and

social networks. It is based on three key

concepts: i) the Migration and

Development nexus; ii) Remittance

Behavior iii) Migrant kinship networks. We

have included both the economics and

sociology-anthropology domain of

migration and remittance behavior. The

purpose of this literature review is to

understand the development-migration

nexus and identify the gaps related to

social determinants affecting remittance

behavior and kinship.

7.1 The Migration and

Development Nexus

The first part of the literature review

analyses and puts into perspective the so-

called positive “migration and

development” nexus, the process by which

migrants, through financial means, are

seen as being able to provide economic

development to their countries of origin.

Today, a total of 232 million citizens are

living outside their country of birth, making

international migration one of the most

important factors affecting economic

relations between developed and

developing countries (UNDESA and OECD

2013). As much as 404 $ billion in the

forms of remittances have been sent to

developing countries in 2013, and those

numbers are projected to continue

growing strongly at an average rate of 9%

to reach 540 $ billion by 2016 (World Bank

2013). Remittances account for twice the

level of official aid-related inflows to

developing countries and are thus said to

have a positive impact on the economical

development of the countries of origin. As

will be discussed in this part and will be

confirmed by our qualitative research

further on, the relationship between

development and migration is not as

straightforward and entails a certain

number of assumptions. Do remittances

have positive long-term effects on

development? Do migrants want to

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contribute to the development of their

country of origin?

Remittances are defined as private

monetary transfers that a migrant makes to

the country of origin, directed to specific

individuals or households. A simplistic

explanation behind the positive

development–migration nexus supposes

that remittances will reduce poverty in the

country of origin as the poor directly

receive them. This will accordingly increase

their income. Studies have shown that a

10% increase in the share of remittances in

a country’s GDP leads to, on average, a

decline from 1.6% to 3.5% in the

proportion of people in poverty (UNCTAD

2013). This is due to the multiplier effect in

the economy: remittances received by the

individuals will be used to buy essential

goods and services, which will directly

increase the local demand, thereby driving

domestic production. Furthermore, each

migrant generally leaves behind several

family members that he/she will support

through remittances; a huge number of

people are therefore directly affected by

the monetary flows. It is implied however

that the demand for goods corresponds to

locally produced goods.

Long-term benefits to the economy would

however only come forth if remittances

were being invested in local and

productive activities (enterprises, purchase

of machinery, education…): in this case,

the multiplier effect becomes larger as

these investments create future income

streams. Yet, as remittances are being sent

to households in direct need of funds,

those households will have a high marginal

propensity to consume and will, as a result,

not direct significant funds towards

investment (UNCTAD 2013). The money is

thus mainly being spent on essential

consumption goods (food, medicine, rent).

Furthermore, even if migrants from the

host country send back remittances for a

specific and intended use, these monetary

flows will be affected by asymmetric

information problems, and more

specifically moral hazard issues: the

distance between the person sending

money and the receiver severely decreases

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the ability of the remitter to monitor what

is really being done with the money.

According to UNCTAD, on average, only

10% of remittances would be saved and

invested. The positive relationship

between economic development of the

country of origin and migration can hence

already be tempered.

In contrast to the view that migration leads

to development in the countries of origin,

the pessimists, such as Papademetriou,

argue that migration would contribute to

the “evolution into an uncontrolled

depletion of the countries of origin’s

meager supplies of skilled manpower –

and the most healthy, dynamic, and

productive members of their populations"

(Papademetriou 1985). Moreover,

remittances would cause inflation as they

are mainly spent on consumption goods:

Lipton affirms that more than 90% of

remittances are indeed used on “everyday

consumption” (Lipton 1980).

The above-mentioned theories are,

however, not capable to deal with the

diverse realities involved in migration and

development interactions. The New

Economics of Labor Migration theory takes

the household and not the individual as

the main decision-making unit (Stark and

Bloom 1985). Taking the household as the

decision-maker models migration as a risk-

sharing behavior of families who are not

searching to maximize profits by migrating,

but who are focused on minimizing income

risks: migration is a household livelihood

strategy, which can be defined as “a

strategic or deliberate choice of

combination of activities by households

and their individual members to maintain,

secure and improve their livelihoods. […]

This particular choice is based on access to

assets, perceptions of opportunities, as

well as aspirations of actors” (Stark and

Bloom 1985: 187). As a result, migration

strategy cannot be properly evaluated

without taking into account the other

livelihood strategies.

This theory is the backbone of the

transnational perspective on migration and

development, which is at the core of our

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qualitative research. Indeed, as migrants

maintain multiple relations that cross

borders, return to the country of origin is

not a prerequisite anymore for their

continued involvement with local

development (Levitt et al 2003). Migrants

maintain enduring ties to their homelands

even though they have settled and

integrated in their host countries. The act

of sending back money is a consequence

of social and emotional relations (altruism)

that migrants maintain with their families

back home. Households live

transnationally and migrants adopt

transnational identities.

Finally, migration is not an independent

variable “causing” development and vice-

versa, but is an endogenous variable: there

are several determinants playing a role in

this dual relationship. In short,

development is rather seen as a

prerequisite for investment by migrants

rather than the contrary. In fact, States

need to have a general social and

economic reform (with efficient political,

social and economic structures) in order to

stimulate investments in the countries of

origin. As development begins, investment

opportunities and returns on investments

will increase. The use of remittances thus

remains dependent on the quality of

governance in those States (IOM 2002).

7.2 Reasons to remit

In this part of the literature review we will

briefly introduce the main arguments

found in the literature to explain why

migrants remit.

Studies about the motives for remitting

have flourished, as there was a shift in

migration studies from seeing the

migration processes as an individual

decision to situate the migrant within the

decision-making unit of the household (de

Haan and Rogaly 2002). With the advent of

the so-called “new economics of labor

migration” (Stark and Bloom 1985, Stark

and Lucas 1988), which started to highlight

the role of social interactions and entities

such as family in conditioning the

migration behavior, migration and

remittances are understood as a means of

spreading risk and increasing income

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within the family, and sometimes as a

repayment for an investment in human

capital made through education (Mohan

2006). The migrant thus feels a strong

need to remit and a great pressure to

succeed in order to re-pay the investments

made the family that financed the journey

to the host country and, in many cases,

accepted to “lose” the migrant’s help in

the family business/farm.

A ground-breaking paper in economics by

Lucas and Stark published in 1985 tested

several hypotheses for motivations to

remit, focusing on the case of Botswana.

The authors divided the motivations to

remit into three categories: (1) pure

altruism for those cases where the only

explanation for remittances is that migrants

care for those left behind; (2) pure self-

interest, in those cases where migrants are

motivated by their aspiration to inherit

from their family in the future or when

migrants know that the remittances are

being used as an investment in assets in

the home area where they intent to return

someday; and (3) tempered altruism (or

enlightened self-interest) when there is an

“inter-temporal and mutually beneficial”

agreement between the migrant and

remaining family for risk sharing and

investment in education (human capital).

The paper found that “tempered

altruism”or “enlightened self-interest” was

the most appropriate explanation for the

remittances being sent in that case, and

inspired several other studies based on a

similar approach (Agarwal and Horowitz

2002, Foster and Rosenzweig 2001).

Other authors (Poirine 1997) have focused

on the fact that, in many instances,

remittances are used for consumption and

not for investment in agricultural activities

or business, as Stark and the others were

implying when they talked about risk

sharing (co-insurance) in the family.

According to these authors, remittances

would be more related to the repayment

of an informal loan (in many cases to

finance education abroad) between the

migrant and the family, even though the

migrants would not indicate this explicitly

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when explaining their reasons for

remitting.

These studies are very relevant and have

provided important caveats to the

scholarship that understands remittances

as a merely altruistic behavior. According

to the authors of the so-called “pure

altruism” theory, migrants are willing to

give resources for those who were left

behind because sending remittances yields

a satisfaction to the migrant out of a

concern for the social welfare of his family

(Tchouassi and Sikod 2010). Although

some empirical studies have found

altruistic motivations for remittances, its

assumptions are “more commonly

assumed than contrasted to other

possibilities” (Rapoport and Docquier

2006: 12).

Despite the differences in their results, a

common feature in all these studies is their

strong rationalistic analyses, mainly based

on econometric models, that fail to

consider the role played by socialization

(and social networks) and kinship relations.

As many scholars have shown, there is a

strong moral and social obligation among

migrants to support home (Mohan 2006)

and to distribute wealth connected to the

need to maintain a certain good reputation

and avoid sanctions and moral norms from

those back home. According to Mohan

(2006), for instance, there is a Congolese

belief that "success in commerce is a gift

that is inherited in the family and that the

wealth it brings belongs to the family and

should be shared among them".Tchouassi

and Sikod (2010) suggest that in many

Sub-Sahara African countries remittances

are explained by the principle of kinship

solidarity through giving and sharing

(charity) to the family and the clan

embedded in many African communities,

as most people rely on subsistence

agriculture and the States are generally

too poor to provide for adequate social

security. According to the author “a child

born to a family belongs to the

community” (2010: 2), and everyone is

responsible and expected to contribute to

its development.

Other studies from a more socio-

anthropological perspective have also

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highlighted interesting dimensions behind

the logics of remittances that often escape

from econometrics studies. Bruce

Whitehouse, when analyzing voluntary

migration from the Sahel to the Congo

basin (Kane and Leedy 2013), for instance,

stresses that in West African Sahel – as in

most places of the African continent - it is

very difficult to refuse a request from kin,

as prevailing norms “favor the collective

welfare of the kin group over individual

private accumulation of wealth, and those

who turn down demands from needy

relatives risk incurring strong moral and

even supernatural sanctions” (Kane and

Leedy 2013 : 23). Within this perspective,

some may fear of suffering from some type

of curse or witchcraft is an interesting

aspect shaping the motives to remit.

Finally, it is worth mentioning that many

migrants maintain the perspective of

returning home someday and remittances

are thus seen as a way for them to

maintain ties with their countries of origin.

7.3 Kinship networks

In this section, we review literature on how

migrant kinship affects remittance

behavior. It is necessary to distinguish

between the role of family and community

networks. As per sociological literature,

family networks can be viewed as "strong

ties" networks and community networks

are similar to "weak ties" networks -

acquaintances. Both networks are

expected to provide varying degrees of

assistance and information to potential

migrants. Migrant networks reduce the

cost of migration and improve the

anticipated return from migration (Winters

et al, 2001).

In a study of Montserratian migrants in the

UK, authors found that remittances are

remarkably steady, especially when

compared to capital markets, which tend

to be volatile. During economic crisis,

when receiving countries may face

difficulties attracting capital, it has been

observed that remittances tend to

increase. These funds support not just the

persons who receive them, but may also

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affect entire families and communities. The

authors also argue that the socio-economic

conditions of the migrants and their kin

also determines how likely they are to send

remittances. The better off immigrants are,

the less likely they are to send remittances.

The poorer migrants are the ones most

likely to send remittances (Philpott 1968).

Studying kinship among migrants also

reveals that remittances do not simply

follow a one-way trajectory from host

country to home country. Migrants not

only send remittances; they also receive

them, what Mazzucato et al call reverse

remittances. These are mainly in the form

of services undertaken for migrants during

the second (installation) phase of the

migration process. In the case of their

research of Ghanaian migrants in the

Netherlands, this phase has become

longer for labor migrants as migration

policies become stricter and more

exclusionary. The authors indicate that

while it is harder to quantify these services,

they help migrants in resolving crisis

during this phase of their migration. This

finding is relevant to both insurance

literature and economic migration studies.

Reverse remittances means that migrant

and networks at home pool risks. As such,

migrants not only provide insurance, but

they also receive it. The authors also

advise that most data on reverse

remittances gets overlooked, because data

is collected based on what household

members receive in migrants’ home

countries and what households receive

from migrants (Mazzucato et al).

Furthermore, it is important to see how

migrants value their networks and how this

shapes their behavior. Network services

provide an overall incentive to remit, but it

is important to consider heterogeneity

among migrants. Indeed, the incentive

effect of network services is stronger for

those migrants who value network

resources the most. A case study of

Senegalese migrants revealed that

migrants who received help from

nonfamily networks or have larger and

denser network, are found to remit more

than insecure migrants who were never

20

helped or do not have large networks.

Interestingly, they are also found to send

remittances at least as much and very likely

more than migrants with less precarious

working conditions (Chort et al).

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8 . Methodology

8.1 Selection of case “African

migrants in Geneva”

Most literature of migrant remittances is

concentrated in areas where remittances

occur the most i.e. the case of India and

the Philippines. We chose the case of

African migrants, as it is an understudied

case, and we carried out our interviews in

Geneva, where both the Graduate Institute

and the IOM international office are based.

Switzerland is one of the European

countries with the largest number of

international migrants among its residents

(24.5% of the total population). As of 2013,

there were 83,903 people of African

nationality residing in Switzerland, which

represents 1% of the total Swiss

population and no more than 4.3% of the

foreign-born population; and 30% of them

had a Permis N (asylum seekers).

Geneva represents a very special case in

the country and it is known to be one of

the most international cities in the world.

As of 2013, there were 198.358 foreign-

born residents in the city, corresponding to

40.2% of the total population. Of these,

16.857 (8.5%) were born in Africa. The

main African communities that exist in

Geneva are from Morocco (1.705

residents), Tunisia (1.214), DRC (888),

Algeria (864), Cameroon (827) and Eritrea

(741). As these numbers can show, the

African-born population in Geneva is very

diverse.

Our sampling selection is theoretical

because we are looking at the particular

case of African migrants living in Geneva.

We have selected people who have made

the decision to migrate to Switzerland, and

we have not included recent arrivals, or

victims of human trafficking, as they may

be outside our theoretical frame as

discussed in the literature review. It is

worth to notice that our interviewees were

between 29 and 55 years and they were all

employed or owned a business. Such a

theoretical sampling will help verify our

22

hypothesis related to remittance behavior

of migrants from Africa.

8.2 Site Visits

We conducted a site visit to the Ria shop

(money transfer agent) in Place Cornavin,

the main train station in Geneva, to

confirm the information regarding the

transaction costs collected during the

interviews. We were impressed by the

number of people (around 20 in half an

hour) transferring money at the store, and

by the fact that most of them were from

Africa. We could hear a man from Senegal

in front of us sending 1.412 CHF to his

sister in Senegal that day.

8.3 Sampling methodology/

Selection of interviewees

Interviews were selected in two ways:

1) On the basis of snowball sampling by

starting within our network of friends and

acquaintances, who referred us to

potential interviewees;

2) Field visits conducted in Paquis, an

immigrant neighborhood in Geneva that

has many African shops. We also stopped

by money transfer agencies, and other

small businesses including restaurants run

by people of African origin to find

potential interviewees. Of all the people

we approached, not everyone agreed to

be interviewed. In two of the cases,

interviewees did not feel comfortable

talking about remittances and declined to

share information, but nonetheless

described their arrival in Geneva.

Figure 1: Interviewee background

We interviewed ten people. Brief

information on them is as follows. We do

not mention names for the sake of

23

confidentiality, but we provide a brief

description of their “trajectory”, their

gender, current occupation and their

nationality.

1. M (Female) originally from

Senegal, arrived in Switzerland

13 years ago in 2001 to study

at the University of Lausanne.

She owns two restaurants (one

Senegalese and one Swiss) in

Geneva.

2. P (Male) originally from DRC,

arrived in Belgium to study at

the “Université Libre de

Bruxelles”. From Belgium, he

came to Switzerland in 1984 to

work. Currently he owns an

African grocery store/kiosk in

Paquis and is now a Belgian

citizen.

3. X (Male) arrived in 1982 from

Eritrea as an asylum seeker.

He owns an Eritrean restaurant

in Geneva.

4. Y (Male) arrived 13 years ago

from Ethiopia as an asylum

seeker. He works as a waiter in

an Ethiopian restaurant. He

was on Permis N for several

years and only recently

received Permis B and the

authorization to work legally

in Geneva.

5. I (Male) migrated from Guinea

to Spain in 1995 and is now a

Spanish citizen. He arrived in

Switzerland looking for further

job opportunities and is now

relying on several part-time

jobs he could find.

6. A (Male) came to Geneva in

2005 as a Masters student

from Mauritania. Previously he

was in France for a few years.

He has completed his PhD in

Switzerland, is married and

has a daughter. He works for

an NGO.

24

7. S (Female) is a Gambian

national working at an

international organization in

Geneva for the past two years.

She has l ived in many

countries, but arrived in

Switzerland for her Masters

degree.

8. B (Male) is 34 years old,

comes from Senegal and

arrived to study in Europe, is

married to a French woman,

and currently works for an

NGO in Neuchatel.

9. S (Female) is 52 year old,

comes from Ghana and works

at an international

organization. She arrived to

study in the UK when she was

22. After her studies, she

moved to Geneva and intends

to move back to Ghana in 5

years after her retirement.

10. K (Male) comes from

Togo/Ghana. He arrived in

Switzerland to study

informatics in 2007. He now

started his own business, and

wants to move to Senegal to

start a business venture.

8.4 Interview methodology

We prepared an interview guide (see

Annex I) for the semi-structured interviews.

The interview guide was followed loosely

based on the responses of the

interviewees. However, in most cases we

started with basic information about the

interviewees: how they arrived here, who

their family is… before moving on to a

more detailed discussion of remittances

and social networks within Geneva and

beyond. We decided it was the best way in

order to gain their trust and make them

feel at ease. Each interview was conducted

by at least two of the team members, in

some cases, on site. The interviews lasted

for about an hour.

25

8.5 Challenges and l imitations

faced during interviews

It has not been easy finding people who

are willing to be interviewed about

remittances. Initially, prior to starting the

field research, we had decided to only

interview migrants from one region or one

country in Africa, however with challenges

in approaching people and getting them

to be interviewed, we had to change our

sampling to include migrants from

different parts of Africa.

8.6 Transcribing and coding of

interviews, analysis

In order to gain the confidence of the

interviewees, we did not record interviews.

We memorized the interview guide, and

tried to follow the pattern. During the

interview we took notes, and the interviews

were later transcribed. After reading the

transcripts of the ten interviews, all

interviews were coded according to

recurring themes related to reasons for

migrating and remittance behavior. The

literature review informed part of the

categories/codes, but most coding was

done based on the transcripts of the

interviews. The findings are presented in

the results section.

26

9 . Results

9.1 Reasons to remit in order of

frequency

According to our interviews, we have

identified five main reasons to remit. We

will discuss each one of them below in

order of frequency, starting with those that

appeared more often during the

interviews.

9.1.1 . Help family meet basic needs

When asked why they were sending

remittances the main answer given by our

interviewees was related to helping family

members (mainly parents and siblings, but

also extended family) to meet their basic

needs in Africa, such as food, rent and

medicines. One of our interviewees said,

for instance, that his family in DRC is very

dependent on the money he sends them

every month, and that without this money

he does not see how "some of them would

be able to live". Others have indicated

that they started sending money after one

of their parents passed away, generally the

father, in order to help their mother "pay

the bills at home". This arguments would

be in line with the literature on the

migration-development nexus that focuses

on the role played by remittances in

helping families to have a stable path of

consumption (consumption smoothing).

However, it is interesting to note that none

of the migrants we interviewed left their

countries to pursue a "family (economic)

strategy" and remit back home at some

point. They all said they went to study

(except for the asylum seekers) and started

remitting when the family asked for help or

when a family member passed away. When

asked if they saw the remittances as a

"repayment" for an investment made by

the family in their education (as some

received some money from the parents

living in Africa during their first years in

Europe as students) none of our

interviewees saw remittances from this

perspective. This hypothesis of

"repayment" would be in line with the

"tempered altruism" as defined by Lucas

and Stark (1985) but we could not find any

27

strong evidence in this sense. What

appears to be a more representative

argument from our interviews is based on

social determinants such as a moral

obligation to remit rather than an

economic strategy made by the migrant

and/or the family.

9.1.2. Moral (and social) obligation to

remit

In most cases, we have identified a strong

feeling of a "moral obligation"

to remit. We observed very

often comments like: "I send

money to my mother because

she is my mother" or "I help

my sister because my sister’s

sons are my sons too."

As we mentioned before, many

interviewees indicated that they started

helping their mothers after their fathers

passed away, "because they are family",

respecting some sort of "kinship solidarity"

(Mohan 2006). One interviewee also

mentioned that once, she sent money back

home not because her family needed it,

but because it was her first paycheck and

you are supposed to share it with the rest

of the (extended) family. "It's a tradition in

Gambia, otherwise you can have bad

luck".

These arguments would be more in line

with the literature that moves away from

strong rationalistic analyses, mainly based

on econometric models, and considers the

role played by socialization and kinship

relations in the process of sending

remittances. Within this perspective, many

interviewees have indicated that they

actually felt obliged to

send remittances

(money or gifts) back

home in order to

maintain a certain good

reputation or due to the

fear of facing (moral) sanctions back home.

Moreover, we can say that migrants care

about the family well-being, but do not

care about how remittances are spent. In

most of the cases, interviewees do not

know what is being done with the money

they send to their families, and they do not

wish to know. In some cases, when

sending to their mothers for instance, they

“I ask myself i f they would hate me or

treat me badly if I come to vis it and do not bring anything from Switzerland”

28

say that “it is my mom, you know, I would

never want to ask her what she is doing

with this money”.

9.1.3 Contribute to education

Many interviewees were sending money to

help fund the education of their sons or

siblings living abroad (not necessarily in

Africa, as many went to study in Europe or

Canada). For them, this money is an

investment that is worth being made, as

they all perceived education as something

very positive. Some indicated that,

although their son/sibling is studying

abroad, they would recommend him/her

to return to Africa to work after their

studies, as they believe that there are

more job opportunities available (for those

with a diploma from Europe/Canada)

there.

We can argue that so far the three main

reasons to remit presented by our

interviewees (in order of frequency) had

very strong social determinants behind

them. The following two reasons stated

below are more related to an individual

strategy to return to Africa.

9.1.4 Building a house

Among those interviewees planning to

return to Africa in the future, we found that

at some point they were sending

remittances to help the construction (or

acquisition) of a house back in Africa. They

said that they already stay in this house

whenever they go back home and that

they plan to move into the house once

they return.

9.1.5 Start a new business

One of our interviewees told us that he

was remitting in order to start a new

business in Africa. He was willing to leave

Geneva soon and, if the business he was

trying to develop in Senegal works, he

would return to Africa to work.

9.1.6 Remittances to support long-

distance relationship

I know people who send money to their wives

in Guinea so that they stay there and do not

come over to Europe […] because in Europe,

women are free”

29

9.2 Costs of remittances and cost

of l iving in Africa

As our interviews have shown, they use Ria

in Geneva for their money transfers, as

they only have to pay 5CHF for any

amount to be sent up to 5,000 CHF1.

Some also mentioned Western Union, but

apparently this would be more expensive

in some cases. In this sense, we can

confirm that costs are a concern to

migrants, as they tend to choose Ria over

Western Union because the first is less

expensive, but they are not an obstacle to

remit. In some cases, some interviewees

have indicated that they didn't mind to

pay more in terms of fees and use Western

Union over Ria because of convenience. As

many interviewees have said, some towns

had Ria agencies that were too dispersed

(but they do have one from Western

Union) and, even though using Ria would

be less expensive, this would mean that

the family member who is going to pick up

the money would have to walk long

distances for that, so they prefer to pay a 1 https://www.riamoneytransfer.com/

little bit more but ensure that the process

is more convenient for those in Africa.

We found that, in contrast to some reports

focused on global trends (Sander 2003), it

is not very common among African

migrants living in Geneva to send money

“informally” through friends or relatives.

We found that only in the case of the

migrants from Eritrea, informal

mechanisms such as giving money to

someone who is going back to Eritrea are

commonly used, as sending money

through the traditional Money Transfer

Operators (MTO) can be very expensive

and it implies the need to have a bank

account. For all the other migrants we

interviewed, both Ria and Western Union

were considered to be a relatively cheap

and convenient option to send

remittances. Furthermore, by sending

money through these formal institutions,

the migrants have the certainty that the

money will arrive almost instantly, and

most importantly, will also be received by

the person who is meant to receive the

transfer.

30

It is worth mentioning that although

sending money through someone else is

an informal mean to send remittances, as

migrants have no guarantee that the

money will be delivered, it cannot be said

that it is illegal, as people can travel to

many countries with a considerable

amount of cash.

Given that costs are not the main problem

when the interviewees talked about

remittances, what they complained about

many times was the fact that they could

not send as much money as they wished

either because they don't earn enough or

they don't save enough. In many cases

they told us that the cost of life is rising in

some African countries and that their

families would need more money, but that

unfortunately they could not afford to send

more. Many interviewees who have been

living abroad for more than a decade have

mentioned that the cost of living in Africa

was rising considerably in the past years

and that it was becoming more and more

expensive for the family members to live

there. This fear was also related to the fact

that some of them wished their families,

for instance, could open small businesses

with the money they remit, but they said

that they were aware that the amount they

are sending is not enough for that, but

only for food and rent.

9.3 Flows and networks

We observed that remittance flows are not

unilateral i.e. from host countries to the

home countries. Almost all interviewees

mentioned that they also send remittances

to other siblings or relatives in Europe or

Canada. This reveals that migrants not only

have connections with their home

countries but also have a much wider

transnational network where remittances

are distributed.

Two of the interlocutors mentioned that

the case of reverse remittances was also

common especially in the initially stages of

migration, when they are trying to settle in

in their newly arrived destinations. In those

cases, their families had helped them with

additional money during the first months.

31

9.4 Means of sending remittances

Among those interviewed, Ria was cited as

the most frequently used means of

sending remittances back to home

countries. This was followed by Western

Union, and Money Gram. Migrants

sending money to kin in Europe used wire

transfers (banks). In some cases, physical

transfers of money or gifts, through friends

passing by their home country was also

mentioned. The use of physical transfers is

particularly important in the case of Eritrea,

given Eritrea’s unique case of semi-autarky

and control of remittances transfer, “I

often asked a friend of mine travelling

back by plane to bring cash for my family

back home as it would otherwise be too

expensive and too risky – I don’t really

trust the system”. Our Eritrean interlocutor

also mentioned the use of hawalas, also

known as hundi, an informal transfer

system consisting of a network of brokers,

where money is transferred without

Figure 2: flows of remittances from Geneva

32

actually moving it. This system is common

in the Horn of Africa. He also mentioned

the use of Dahabshiil, a money transfer

agency that was founded in Somalia in the

1970s, to facilitate the easy payment of

remittances for Somali migrants in the gulf

countries. The agency is now

headquartered in Dubai, and continues to

send be used for money from abroad

throughout Horn of Africa. Eritrea and

Somalia are also exceptions in both the

amount of people who work outside of

their home country or migrate, and the

amount of remittances sent back home, as

compared to other African countries.

Eritrea is as such as special case, and we

do not study it in depth in our report, but

we recommend that this be studied

separately on its own.

THE ERITREAN CASE:

“Money changes hands a lot”

Informal practices were only mentioned by our Eritrean interlocutors. According to our

interviewee, it is really difficult to send money to Eritrea given the semi-autarkic nature of the

Eritrean economy, the restrictions on bringing cash in foreign currency to the country and the

government control on remittances by limiting both financial development of the country and the

amount of money transfer agents. Eritreans in Geneva can use the National bank located at the

Eritrean Consulate (Banque Himbol) but they charge a 2% commission for money transfers. One

could also use Western Union but the commission is even higher (5%). These commissions become

especially costly when they have to send large sums of money home. The Eritrean Nafka has been

depreciating over the recent years, with the black market exchange rate being more than 50% of

the official rate (Healy, 2007). Fearing customs and other measures, Eritreans sending foreign

currency to Eritrea through physical transfers thus often hide large sums of foreign currency by

hiding it in their clothes. Sometimes physical transfers are routed via Dahabshiil (from Dubai, then

Somalia and then to Eritrea), or through networks in Dubai, where many Eritreans work.

Remittances from Eritrean individuals are also used sponsor the fees of “agents” who help other

kin migrate over land, i.e. by illegally crossing borders into Sudan and Egypt and over the

Mediterranean Sea.

33

9.5 Remittances are adjusted

based on the situation of the

family back home

In most of the cases we were told by our

interviewees that they adjust the amount

of money being sent according

to the needs back home, at

least up to what is possible

given their own constraints.

Within this perspective,

interviewees reported sending

more money when a family member dies

or when a sibling starts a new school.

Similarly, families of migrants who are well

off are less likely to receive remittances.

9.6 Complex management of

expectations among family

members

Managing expectations among family

members is a lot more complicated and

involves weighing in expectations from

different members of the immediate

family. As such, remittance behavior is

often adjusted to manage these

expectations from kin, including taking into

account the different relationships among

the kin and how they are affected by

remittances. Examples of such adjustments

include: sending the same amount of

money to all the relatives in

order to avoid making

anyone “jealous” or

creating conflict among

family members;

deliberately not sending

money at the same time as the sibling;

deliberately not knowing how much money

each sibling sends; deliberately sending

only gifts instead of a “cash” remittances.

9.7 The important role played by

the migrants’ social networks

We also found that the social networks of

migrants play an important role in

attracting new migrants: when asked if

he/she was the only migrant living in

Europe, it was very likely to hear that

another sibling came over to Europe a few

years later or earlier than him/her. Before

"I don't help my parents because they

have a shop in Senegal and they are

doing fine"

34

arriving in Europe, all the interviewees had

a sort of connection in order to facilitate

their journey and integration in Europe.

This underlines the importance of having

social networks prior to arrival: a further

research question that could be studied

here is to analyze whether or not citizens

from African countries without

any relatives or acquaintances in

host countries are as inclined to

migrate as those that have a

(even minimal) network they

could make use of.

Furthermore, ties to home are

mixed and the pressure from family

members differ:

- Family members want them to come

back or help another family member

migrate. Through the interviews, we

have noticed that Europe is still

seen as a dream destination for

migrants, a place where they will

easily find a job, start up a business,

create a family and succeed in life:

Ibrahim “I left Guinea when I was

seventeen because I wanted to be

more ambitious and thought that I

could do more and become

someone more important out there

in Europe”. Upon arrival, they are

often confronted to a different and

contrasting reality.

- “Family” is defined on two levels:

the families back home, which

encompasses the parents

and the broader family,

and the new family that

has been constructed in

the host country.

Migrants thus have

multiple social roles to

commit to: they are a part of two

families but are also seen as the

“savior” of the family back home; as

such, they need to fulfill this role by

sending back remittances.

9.8 Building relationships in

Geneva

What was interesting to note when

analyzing the way African migrants

integrated in Geneva was the fact that the

majority of the individuals did not find it

necessary to belong to a national

“I always send the same amount to each

person so that they don’t feel jealous”

35

association or a community from back

home. Individuals did not find the urge or

the necessity to form bonds with other

migrants from the same region or country.

This trend was countered by only one

interviewee: the Eritrean refugee upon

arrival in Geneva at the end of the 1980s

started an association of Eritreans and

were aimed at spreading information to

the population in Geneva who were

completely ignorant on what was going on

in Eritrea at the time (war of

independence).

Even though migrants do not feel the

necessity to form associations, they tend to

regroup and socialize through church

membership. For the majority of our

interviewees, religion takes up a very

important part of their lives. This is where

they get to know people and create

networks.

Even though most of our interviewees

answered positively to the question of

whether they liked living in Geneva, it is

worth noting that one refugee from

Ethiopia, together with other Ethiopian

migrants, prepared a movie in Amharic,

called Wereket to be promoted in Ethiopia

about the hard living conditions of the

Ethiopians living in Switzerland, in order to

increase their real knowledge of the

economic and social difficulties awaiting

them here and to “stop others from

coming to suffer”2. The video also talks

about problems with documents/visas.

9.9 Investments in Africa and the

intention to return

We can argue that there is a relationship

between the cases where migrants are

investing back home (and not only helping

family meet basic needs) and their

intention to return. We found that migrants

using remittances to build a house or to

start a new business are planning to return

to Africa. Within this perspective, these

examples would fit more into the "pure

self-interest motivations" (Lucas and Stark

1985), where migrants are motivated by

their aspiration to inherit from their family

in the future or when migrants know that

the remittances are being used as an

2The trailer is available on Youtube http://www.youtube.com/watch?v=inMTsUUCxTM)

36

investment in assets in the home area

where they intent to return someday.

37

10. Conclusion

We frame our results to see how they

answered our research questions of the

much-discussed migration-development

nexus and how it is manifested in each of

the 10 cases that we studied. With the

exception of Eritrea, we found that all

remittances were sent to families with the

intention of helping other kin in their

household consumption or financing the

costs of education for the younger siblings.

Factors that affects the amount, the

frequency and the recipients of

remittances included: complex

management of expectations from family

members in home countries and siblings

and cousins in other countries, particularly

Europe and the fact that most migrants do

not care about how remittances are spent,

and that they adjust the amount they send

based on needs at home. We also found

that transaction costs, which are more

widely covered in the studies, were not

found to be an obstacle in the decision-

making process of sending money. In fact,

convenience of retrieving money from

money transfer agencies in the home

countries (example, distance from the

agent) took precedence over the costs of

sending money.

With these results in mind, we conclude

that the migration-development nexus is

manifested more in human development

terms, rather than contributing to just

economic development of the country.

Money sent to kin back home is typically

used to cover basic needs, and as such as

remittances may help in smoothening

consumption of families back home,

especially during times of financial

hardship. Additionally, migration helps

formation and development of human

capital, with remittances sponsoring

education of siblings and cousins. We also

argue that the reason for migration is not

just to send remittances back home. As

such we find more evidence that migration

helps the human development in

improving a standard of living, but we

38

cannot conclude that remittances link to

economic growth of the country.

At the same time, two of our interlocutors

mentioned use of remittances to construct

a house back home. Indeed there can be

economic spillovers to other sectors, when

such projects are financed back home.

However we cannot address this question

from the scope of our study.

39

11 . Recommendations

We have structured our recommendations

into two main fields of action: more work

can be done in the policy as well as in the

research frameworks:

• We make the following policy

recommendations to the IOM as

well as other agencies, and

governments:

- We recommend further

financial development in the

home countries of the

migrants. While the costs of

sending remittances may not

be an obstacle, we found that

convenience of using money

transfer agent was more a

factor in deciding which

means to use while sending

money. As such promotion of

financial depth, for example,

presence of more branches,

including in vil lages, wil l

facil itate sending of

remittances.

- We also recommend that

agencies do not overestimate

the economic impact of

remittances in promoting

development in migrants’

home countries. Migrants send

remittances primarily to assist

with household consumption

rather than investment in

productive assets. At the same

time, remittances are widely

used for financing education.

As such, we recommend the

development be taken into

account from a more holistic

“human development”

perspective rather than a

narrow economic development

definition.

• Second of all, we state that more

research needs to be done in some

areas:

40

- We believe that

researchers interested in

studying remittances should

focus not only on migrants’

countries of origin, but also

consider remittances from the

perspective of other networks

that migrants have. As we

have shown, the people we

interviewed either knew

someone who had migrated

before them or had someone

in the family who migrated

after them.

- In many cases people

require resources and

connections to engage in

international migration, and

they can also inspire other

family members to do the

same afterwards - and this was

particularly true for those who

migrated to pursue their post-

secondary education abroad,

as they were remitting to help

siblings who are doing the

same. Within this perspective,

we found that remittance flows

are not unilateral (from host

countries to the home

countries) and that there is an

important flow of remittances

from Geneva to developed

countries in Europe and

Canada to help siblings pay

for tuition fees. As we have

said, this reveals that migrants

not only have connections

with their home countries but

also have a much wider

transnational network where

remittances are distributed,

and this process might be

ignored with researchers focus

on migrants' countries of

origin and destination only.

41

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13. Annexes 13.1 Interview Guidelines

PART 1: INDIVIDUAL

Before starting: Basic background information about the person: Name, Sex, Age

category, country of origin, education level (range), family composition, religion.

· Tell us your story?

In case he does not explain why/how he/she came to Geneva, we would ask him/her:

· How come you came to Geneva?

· When did you arrive?

· Why did you come to Geneva? (Did you come here to study? To work?) Are you planning to

stay? For how long are you staying?

· Did you know someone who helped you to settle in Geneva? How did you know this

person? How did you get in touch with him/her?

· How did this person help you? Why was he/she useful? (Did you have to pay him/her?) Did

someone pick you up from the airport (or place where you arrived)? What/where did you go

afterwards?

· Did you study? What did you study?

· Were you working before coming to Geneva? What was your previous job? More subtle:

what were you doing back home?

· Are you working now? (How did you find this job? Who helped you? Did you have to pay

that person?)

· How often do you go home? Are you planning to go home?

· Are you in contact with your friends, family or anyone back home? How? (letter, email,

telephone)?

PART 2: FAMILY

· Is your family (define family) living in Geneva with you?

- If yes, who are they? Do you have any other family members back home?

(who do you consider being part of your family?)

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- If no, where do they live? (If they live somewhere else, why? Have they tried to

join you?)

· Can you tell us a little bit more about them? Do you have brothers, sisters…?

· What do they do? (Work?)

· Do you help your family? How? (In case he says no, we ask why not and who is helping them)

· Do you send them money? Do you send anything else?

· Who do you send money to?

· Why? What is the money for? (Do you have to pay back your family, are you just helping

them or are you investing it for when you go back home (if you plan to go back)?) Specifically

ask if they send it to parents or to other members of the family, as it will differ when it comes

to identifying whether or not they send because they feel morally obliged to do so.

PART 3: REMITTANCES

· How often do you send money? When was the first time?

· Why do you send back money?

· How much money do you send them? Who decides how much money should be sent? Don’t

ask them a specific number, they won’t answer…

· Is it a big part of what you earn in Geneva? (Try to get information on how much money he

earns and what share of the income it represents) They won’t answer…

· Do you always send the same amount?

- If he says yes, we ask why?

- If he says no, does it depend on how much money you earn? Does your family

expect you to send more when you earn more? Do you tell your family that you earn

more? Be subtler here: what do you do when you are in a difficult financial situation?

· Has it ever happened that you didn’t have enough money to send back? What did you do? If

he does not send, how did your family react?

· Do you feel obliged to send this money?

· Do you know what this money is used for? Do you care about how the money is spent?

· Is there a specific period in the year where you send money the most? If so, why?

· When did you first start to send money?

· Will you continue sending money forever?

· How do you keep in contact with your parents/family? Do they call you aswell? Why do you

keep in contact with that specific member of the family?

· Tell me how you feel about remittances (I feel like I am becoming a psychologist haha), what

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can you say about it? Is it a good thing/bad thing?

PART 4: TECHNOLOGIES / MEANS

· How do you send money? Does someone help you? (Technologies / means)

· Have you been using the same method since you have arrived? If no, why did you change?

· Is it expensive to send back money? If there is a person involved in the process, do you have

to pay him? Don’t ask this last question

- If he says yes: Why/what makes it expensive?

- If he says no: what are the costs involved? What is expensive for you?

· Is it difficult to send back money/gifts? Why?

PART 5: NETWORKS IN GENEVA

· In Geneva, whom do you hang out with? Start by asking if there is a big local community?

Are there any associations? Are you part of any?

· How did you get to know them?

· Are you part of an association? Which one? Who is part of it? What does this association do?

· Do you go to church? Is church important for you? Do your friends go to church as well? Is

this where you got to know them?

· Do you like living in Geneva? Why/why not?

· Are you planning to go back home? Subtler: what are your future plans?

· Are you planning to move abroad?