Migrant Remittances in South Asia (Palgrave Macmillan Book) with Introduction Chapter

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v

Contents

List of Figures vii

List of Tables viii

Preface x

Acknowledgements xii

Notes on Contributors xiii

List of Acronyms xviii

Migrant Remittances in South Asia: An Introduction 1Md Mizanur Rahman, Tan Tai Yong and AKM Ahsan Ullah

Part I Remittance and Conceptual Issues

1 Understanding Remittances: Theoretical and Methodological Issues 33

Md Mizanur Rahman and Lian Kwen Fee

2 Gender and Remittances: Remodelling Remittance Exposure 52 AKM Ahsan Ullah

Part II Remittance Transfer Systems

3 Formal Remittances: Costs and Efficiencies of Remittance Transfers to South Asia 71

Bhupal Singh

4 Social Organization of Hundi: Informal Remittance Transfer to South Asia 88

Md Mizanur Rahman and Brenda S.A. Yeoh

Part III Implications of Remittances in South Asia

5 The Social Dynamics of Remittance-Receiving in Pakistan: Agency and Opportunity among Non-migrants in a Transnational Social Field 115

Marta Bivand Erdal

6 Remittances and SME Development: Reflections from South Asia 135

Rita Afsar

7 Gendering Remittances: Contested Masculinities among Bangladeshi Male Immigrants in New York City 158

Natacha Stevanovic-Fenn



vi Contents

8 Globalization of Remittances in India: Towards a Sociological Perspective 192

Vani S. Kulkarni

9 When Money Follows the Corpse: Remittances of Deceased Migrants in South Asia 218

AKM Ahsan Ullah and Mallik Akram Hossain

10 Fertility Responses to Migrant Remittances in Pakistan 235 Mazhar Mughal and Amar Anwar

11 Migrants’ Private Giving and Development in Central Gujarat, India 255

Puja Guha

12 Uses and Impacts of Remittances in Nepal 277 Bhubanesh Pant

Index 295



1

Migrant Remittances in South Asia: An IntroductionMd Mizanur Rahman, Tan Tai Yong and AKM Ahsan Ullah

The flows of money, knowledge and universal ideas – called remittances – can have a positive effect on what is called devel-opment in the countries of emigration.

— Thomas Faist (2008: 21)

Making decision in order to set off for international destinations is hardly independent of potential economic benefit that spawns in the form of remittances. The primary motivations for migration from developing coun-tries are generally linked to economic opportunities overseas and sharing part of this newly acquired economic opportunity with family members remained behind (Skeldon, 1997; Faist, 2000; Oda, 2004; Piper 2007; de Haas, 2010b; Ullah, 2010; Adams et al., 2012; Rajan, 2012; Sirkeci et al., 2012). Remittance – one of the direct outcomes of international migration – is the most beneficial private transactions in the global economy. This often stems from relatively developed economies and goes to the migrant households located in the developing economies. The South Asian region draws nearly one-fourth of global remittance volume that contributes on average to over 10 per cent of GDP of South Asian countries. This remark-able amount and its potential for development to South Asia justify this volume. By focusing on the manners and means by which the South Asian migrant communities remit back to their countries and the implications of remittances for recipient families and communities, the chapters of this volume seek to contribute to expanding scholarship in the field of remittance.

Migrant remittances generally refer to ‘transfers of cash or in kind from migrants to resident households in the country of origin’ (Bilsborrow et al., 1997: 321). The key sources of official data on remittances are the records of annual balance of payments of respective countries. These are compiled in the Balance of Payments Yearbook by the International Monetary Fund (IMF). The IMF provides a comprehensive definition of the Balance of



2 Md Mizanur Rahman, Tan Tai Yong and AKM Ahsan Ullah

Payments Manual (BPM5) in its fifth edition by incorporating three distinct categories in its statistical yearbook: (i) workers’ remittances, (ii) compensa-tion of employees, and (iii) migrants’ transfers. Workers’ remittances cover current transfers by migrants who are employed in new economies and considered residents there. Compensation of employees comprises wages, salaries, and other benefits earned by individuals in other countries rather than those they are currently residing. Migrants’ transfers refer to transfers of financial assets made by migrants as they move from one country to another. Later, the IMF simplified the definition of remittances and brought it in line with compilation practices applied in many economies (World Bank, 2013: 4). The sixth edition of the IMF Balance of Payments and International Investment Position Manual (BPM6) introduces ‘personal transfers’ and ‘com-pensation of employees’ to estimate remittances (IMF, 2009: 20). Personal transfers include all current transfers between resident and non-resident individuals. Recent remittance data published by IMF Balance of Payments Statistics Yearbook provide data on remittances following BPM6 definition, that is, remittances as personal transfers and compensation of employees. Despite some drawbacks in the IMF data (for details, see Ramamurthy, 2006), the IMF remittance data are widely used in research on remittances (World Bank, 2011).

Recently, the volume of remittances has shot up to three times the size of official development assistance, and larger than private debt and port folio equity flows to developing countries (World Bank, 2013: 2). Officially recorded remittance flows at the global level have been grow-ing. Global remittance flows have increased from US$205 billion in 2003 to nearly US$549 billion in 2013 (World Bank, 2013), which is nearly 267 per cent increase over the last 10 years. Global remittance flows to developing countries demonstrate a more astonishing figure. Officially recorded remittance flows to developing countries increased from US$145 billion in 2003 to nearly US$414 billion in 20131 (World Bank, 2013). Thus, the percentage increase in the last one decade stands approximately at 285 per cent. This increase in international remittance flows is often attributed to the development of sophisticated monitoring and reporting mechanisms (Black and Skeldon, 2009; World Bank, 2011). It is worth not-ing that recorded remittance data have improved significantly because of the efforts of the World Bank and the IMF over the years (for details, see Rahman and Lian, this volume). The true value of remittances, however, is likely to be much higher because this official account does not cap-ture informal remittances. One source estimates informal remittances as between US$100 and US$200 billion a year, while another puts the figure between US$200 and US$300 billion a year (for details, see Chapter 4 by Rahman and Yeoh, this volume).

Remittance data in South Asia are impressive in many ways. South Asia’s share in global remittance flows to the developing countries is significantly



Migrant Remittances in South Asia: An Introduction 3

higher than many other developing regions. As mentioned earlier, nearly one-fourth of remittances to the developing countries are presently directed into the South Asian countries. Countries in South Asia received about US$31 billion in 2003, and the amount reached to an estimated amount of US$114 billion in 2013 (World Bank, 2007, 2013), which is nearly 368 per cent increase over the last 10 years. Three South Asian countries – India, Bangladesh, and Pakistan – are among the top 10 recipients of remittances on the global list of 2013 while India tops the list (with nearly US$71 billion in 2013). Bangladesh and Pakistan occupy seventh position jointly (nearly US$15 billion) (World Bank, 2013: 1–5).

Remittances play a crucial role in economy in some countries in South Asia. In Nepal, for instance, remittances contribute to 24 per cent of GDP. They are also important in Sri Lanka and Bangladesh, exceeding nearly 10 per cent of GDP. Remittances constitute nearly 4 per cent of GDP of India and almost 7 per cent of GDP of Pakistan. The diversified sources of remit-tances in South Asia made it unique from other regions by shielding the economy from susceptibility to economic slowdown. For instance, remit-tance flows to Latin America, the Caribbean, and North Africa regions fell in 2009 due to the 2008–2009 recession that began in the U.S. financial sector and spread globally (Martin, 2009). An exception during this period was the many Asian labor-sending countries such as Bangladesh, India, Nepal, Pakistan, and Sri Lanka where remittance volumes grew in the same year (World Bank, 2010),2 raising hopes for the development potential of remit-tances even during the period of global economic downturn.

A reliable estimate for the total number of South Asian emigrants living and working overseas is hard to find. This is probably due to the nature, scope, and time period of emigration from South Asia, which makes it administratively challenging to monitor the net migration (Tan and Rahman, 2013; Jayaram, 2011; Nayyar, 1994). In emigration statistics, we also need to consider annual outflow of emigrants from South Asia and children of emi-grants born overseas. It is roughly estimated that there might be between 30 and 40 million Indian emigrants, 8 and 10 million Bangladeshi emigrants, 5 and 7 million Pakistani emigrants, 2 and 3 million Sri Lankan emigrants, 4 and 5 million Afghan emigrants, and around 2 million Nepali emigrants living around the world (see Tan and Rahman, 2013). According to another estimate, there may be as many as 70 million people of South Asian origin living around the world (Burki, 2013).3 Remittances in South Asia in particu-lar are constituted primarily by ‘family remittances’ (Goldring, 2004) – from members overseas to their families, extended families, and communities back in South Asia. Therefore, what is interesting about remittances is that many of the estimated 70 million emigrants remitted over US$100 billion to their families in South Asia.

Unlike foreign aid, remittances directly enter the family back home, and in most cases, they go to relatively backward rural regions (Kapur, 2003: 7).




Hence, Jones (1998) notes, ‘there is probably no other more bottom-up way of redistributing and enhancing welfare among populations in developing countries than the remittances’ (cited in de Haas, 2005: 1277). Drawing on the case of emigration, remittances, and its development potential for Bangladesh, noted economist, Jonathon Moses, in his article argues that the most efficient way of developing Bangladesh is to encourage more emigration (Moses, 2009: 457). Moses makes his argument in three steps: (i) proposing that 10 per cent of the population be encouraged to emi-grate to member states in the Bangladeshi Aid Consortium; (ii) outlining the anticipated costs and (iii) describing the anticipated gains, which are, in his views, phenomenal and encouraging. He shows that the lives and families of millions of Bangladeshis would enjoy a marked and immediate improvement as a result of his proposal (Moses, 2009). Therefore, given the significance of remittances and its development potential in the region as a whole, this volume makes a compelling case for studying migration and remittances in South Asia.

Globally, the unprecedented growth in migrant remittances has drawn the attention of states, international organizations such as International Organization for Migration (IOM), UNDP, UNIFEM, INSTRAW, UNICEF, UNFPA, DFID, and DIIS, and international financial institutions such as the World Bank, Inter-American Development Bank (IDB), Asian Development Bank (ADB), and the IMF. The question of most interest to them is how to harness the development potential of remittances. The IDB sponsored several years of nation-by-nation studies of the importance of remittances in the Americas. In Asia, the ADB, the World Bank, UNIFEM, and IOM have spon-sored several studies on remittances, especially on searching ways to lower transaction costs for formal remittance transfers and to improve the pro-ductivity of remittances in the sending countries (Ratha and Kethar, 2004; El Qorchi et al., 2003; Seddon, 2004; Eversole, 2005). Broadly, existing studies seek to leverage migrant remittances and migrant capital for development in the developing countries. In addition to reducing transfer costs and develop-ing institutional partnerships, they also propose to bank the rural popula-tion, promote innovative remittances and financial services, and enhance productive rural investment in the migrants’ countries of origin.

Remittance is one of the outcomes of international migration, and there-fore this volume should not by any means suggest that migration does not affect development in ways other than through remittances. The impact of remittances should be seen in a broader context of the impact of migration. This is because migration has often broader implications for the migrants, their families and communities, and the nation-states than remittances. In line with de Haas (2007), we also believe that remittance impacts are seldom isolated from other migration impacts and this volume makes a modest attempt to reflect on some of these implications. Given the grow-ing sum of remittance flows to the developing countries, remittances have




gained popularity as an instrument to finance development. Along with remittances as a ‘development partner’ notion, remittances with a range of perspectives such as formalization of remittances, transfer costs, the impacts of remittances on inequality, investment, conspicuous consumption, and endogenous and exogenous nature of remittances have emerged in the last two decades (ADB, 2006; OECD, 2006; de Haas, 2005, 2010a, 2010b; Cohen, 2005; Sirkeci et al., 2012). There exists considerable literature on migrant remittances in Latin American countries (Orozco, 2013; de la Garza and Lowell, 2002; Trager, 2005; Kunz, 2011). Ironically, a disproportion of research on remittances is observed in Asia. In available remittance studies in Asia, what is ostensibly lacking is to view remittances as a process and provide a deeper understanding of remittances from a regional perspective, as we notice in remittance research in some Latin American countries (de la Garza and Lowell, 2002). This volume is an attempt to narrow the existing gap in remittance research by offering a South Asian perspective to remit-tance studies.

Scholars in remittance studies tend to address two sets of questions. The first set involves facilitation of remittance transfers that deals with the means of how to reduce the costs of transactions in the formal remittance transfers, how to bank the unbanked senders and recipients, and how to diminish the age-old practice of informal transfers. The second set scru-tinizes how to leverage the development potential of remittances with a focus on what are the patterns of remittance use, what constitutes produc-tive investment, and what type of investment particularly leads to develop-ment. The latter set of questions often takes a narrow economic focus and ‘problem-solving approach’ and tends to ignore the broader implications of the remittances on the society. In the existing work, a disjoint is evident between these two sets of questions. This volume addresses these two sets of questions and thus offers insights into the burgeoning remittance industry and multilayered and multifaceted effects of remittances in the South Asian society. In doing so, this volume takes a perspective to embrace two press-ing themes in remittance studies: first, the growing remittance industry that uses the advanced technology such as Internet and mobile phone and facili-tates the transfers to remote rural South Asia, and second, the far-reaching implications remittances have on the social, economic, and political spheres in the South Asian society.

After decades of pessimism and concerns, governments of source coun-tries have put renewed hopes on transnationally oriented migrants as potential actors of development (Glick Schiller and Faist, 2009; de Haas, 2010b; Hujo and Piper, 2010). The conventional focus on remittances and development tends to be based on notions of development that focus on gross income indicators (Papademetriou and Martin, 1991). Consequently, research on migration, remittances, and development was seen to devote primarily on income growth and investments in productive enterprises.




This conventional focus is rather narrow, since remittances can have impact on a wide range of societal issues beyond income. These may include their impact on income risks in the developing countries, investments in human capital, especially education and skill promotions, health and sanitation, gender equity, vital demographic statistics, and intragenerational and inter-generational relations. We take a broader view of development that is in line with Amartya Sen’s ‘human capability approach’ to development. Sen views development as a process of increasing the freedom of the people, in short ‘development as freedom’ (Sen, 1999). According to de Haas, applying such a broad view of development to the remittance debate evokes the necessity of looking beyond income indicators and also studying the multi-faceted ways in which remittances affect the well-being and capabilities of people in migrant-sending countries (de Haas, 2007: 1–3, 2010a). Sen’s understanding of development includes elements such as social well-being, poverty allevia-tion, income inequality, gender equality, and universal access to primary education, health care, and meaningful employment (Sen, 1999). Sen views ‘development’ as an effort to promote human capability through expanding the range of things that all people can choose to be or to do with their lives. Given this broader development context, it seems reasonable to assume that any implications of remittances have the potential to contribute to one or more of these fields in South Asia.

This volume advances research on migrant remittance in South Asia by shedding light on three key areas: (i) theoretical and conceptual develop-ments, (ii) remittance transfers, and (iii) the implications of migrant remit-tances for development in South Asia. Some questions that this volume particularly attempts to address are as follows: What remittances exactly refer to? Is the understanding of remittances limited to the fact of transfers of money from migrants to their family members at home? What are the determinants of remittances? What are the channels used and in place to transfer remittances? Why do a considerable number of migrants resort to remit through informal channels in South Asia, despite risks involved? A central element in nearly all discussions of remittances is the question of what their impact is – socially, economically, and politically. Are they simply used for consumption? Are they used for productive investment, and, if so, how is productive investment perceived? What role does gender play in the remittance use? What is the role of remittances in the small and medium enterprise (SME) development in South Asia? How are remittances of deceased migrants recovered and made available to their family members in South Asia? How do remittances affect fertility behavior in South Asia? Who are the family members who receive them, what are their expectations, and how different are the migrants’ expectations from the users? These questions weave through the chapters of this volume.

This volume highlights financial engagements of migrants as a process and views remittance-induced implications at the micro, meso, and macro




levels as a development process. The innovativeness of this volume thus lies in the fact that (i) it identifies and elaborates the burgeoning remittance industry that has revolutionized the means of remittance transfers in the global South, (ii) it takes us further by reflecting on the linkages between remittance transfers and remittance implications/effects, and finally (iii) it informs us of broader implications of remittances by incorporating social dimensions to it. Thus, this volume approaches remittances from a multidisciplinary perspective. More importantly, this volume views remit-tances as a ‘financial engagement’ rather than merely as a ‘sum of money’, and thus renders explanations for underlying social realities within which remittances are embedded. This book presents empirically based research involving a number of countries in South Asia and their diaspora members/emigrant communities/groups living and working overseas.

The following discussions are divided into four sections. The next section discusses channels and costs of remittance transfers and suggests policy measures for improving the remittance services in South Asia, followed by a section on the implications of migrant remittances for development. In this section, we highlight several interrelated issues such as determinants, uses, and impacts of remittances for development in South Asia. The next section highlights the contributions to this volume. In the conclusion, we provide some final reflections on further research on migrant remittances in South Asia.

Channels and costs of remittance transfers

Systematic research on remittance transfer mechanisms has mainly focused on three issues: (i) the typology of the transfer mechanisms, (ii) the com-parative cost of transfers through different transfer channels, and (iii) the choice of the transfer means and evolution of money transfer markets (Straubhaar and Vadean, 2005; APEC, 2003; FATF, 2003; World Bank, 2006; Maimbo et al., 2005). Migrants from different countries in South Asia have varying preferences about remitting channels. This preference is shaped by background of the individual remitters such as immigration status of the remitters (irregular or regular), skill composition of remitters (skilled and professional or unskilled), age structure (young or aged), and so on. As a result, they use diverse channels of remittances within the same remittance corridor. Most common practices for remitting in South Asia are money orders, transfers via telegraph, electronic transfers, couriers, the postal ser-vice, self-carry, and hand-carry by friends and family members. Broadly, we can identify two main types of transfer channels: formal and informal. They are often simultaneously used in South Asia.

Within formal channels, the institutions involved in money transfers are supervised by government agencies that determine the formation, charac-teristics, operations, and closure (APEC, 2003: 3). In general, formal systems




include banks, postal services, money transfer operators (MTOs), and other wire transfer services and card-based money transfers (credit and debit cards). After the 9/11, the fear turned widespread that remittances might be used for terrorist financing. As a result, many remittance-source coun-tries adopted policy measures targeting channels and costs of remittance transfers, which allowed healthy competition in the remittance market and development partnership between remittance-source and remittance-desti-nation countries in providing fast and cheap remittance services (Rahman, 2008; Rahman and Lian, 2009). Leading banks of the South Asian countries launched remittance services in major South Asian immigrant/migrant-receiving countries in North America, Europe, the Middle East, and East and Southeast Asia. In the remittance-source countries, South Asian banks indi-vidually and sometimes in partnership with local banks and local branches of foreign banks, and licensed remittance companies are serving the South Asian remittance market. South Asian banks have also formed partnership with global ‘monetary transfer operators’.

Among the formal channels, MTOs and credit unions have been playing an important role in global money transfers. The MTOs provide the fastest service, taking a few minutes to transfer money from one part of the world to another. They have been gradually establishing firm roots in the remit-tance market, beating the formal banking system. However, they charge higher fees. Western Union and MoneyGram are examples of two major MTOs. Initially, they started operations in North America and eventually their services expanded almost every country in the world. Western Union transfers money for payments using money orders and other electronic systems. Consumers can quickly and easily transfer money to more than 345,000 Western Union agents located in over 200 countries and territories worldwide, the largest network of its kind.4 MoneyGram operates in 190 countries and territories worldwide and has a network of 180,000 local agents. These MTOs penetrated the Asian remittance market in such a way that Western Union and MoneyGram have become a household name across the remittance-recipient families in South Asia.

Debit and credit cards are used to draw cash from automatic teller machines (ATM) in many remittance-recipient countries. However, when cash is withdrawn using such cards, a small fee is charged for each trans-action. Emigrants of Latin American origin living and working in North America are increasingly using debit and credit cards for remittance (Orozco, 2004); however, these have yet to reach South Asia, where the use of such cards (credit or debit) is still limited to skilled migrant workers who are on authorized status. Furthermore, the majority of low-skilled migrant workers do not have access to the banking services in either their host or home countries. The transfer mechanisms developed by banks, MTOs, postal services, and credit unions have the particularity that the remittance sender open an account or provide detailed information about remitters,




sometimes particulars about work permit to the respective formal institu-tions in remittance-sending countries. In South Asia, recipients of remit-tances are required to produce some sort of documentary proof (voter ID, passport, etc.) to withdraw cash from MTOs.

In contrast, the informal channel ‘exists and operates outside of (or paral-lel to) conventional regulated banking and financial channels’ (Buencamino and Gorbunov, 2002: 1). Informal funds transfer systems have long been in existence. Initially used as part of trade and commerce, they were also used by early migrants to transfer savings. Presently, informal systems exist in different names and forms in many countries, for example, hawala (India, Pakistan, and the Middle East) and hundi (Pakistan and Bangladesh) (for details, see Rahman and Yeoh, this volume). About two-thirds of remit-tance recipients in South Asia are using informal channels to make transfers (Kendall et al., 2013, cited in World Bank, 2013: 26). In general, informal sys-tem possesses several distinct features that account for the widespread use of informal system in this region. Trustworthiness, transaction cost–free door-to-door service, speed, cultural convenience, and social rewarding are among the most noteworthy features. If these features are compared and contrasted with the formal funds transfer systems in developing countries, which are often plagued by high transaction costs, long delay, exchange loss, and, last but not least, overly bureaucratic procedures (see also APEC, 2003; El Qorchi et al., 2003; de la Garza and Lowell, 2002), it becomes evident why many migrant workers prefer to use the informal system to remit their hard-earned earnings. The role of different socioeconomic groups (e.g., businessmen, stu-dents, medical tourists) is also important in the commercial viability of the informal system (see Rahman and Yeoh in this volume for details).

An increasing number of international organizations are addressing today’s challenges in the remittance market, with a particular focus on rural areas and rural financing linkages. The penetration of MTOs and opening of exchange houses in major labor-receiving countries have made consider-able inroad on the monopoly of informal remittance transfers. However, costs of remittance transfer remain a concern for migrants, states, and international community. Despite the G20 objective of reducing costs to 5 per cent in five years, the global average cost of sending US$200 seems to remain 8.9 per cent (World Bank, 2013: 6). The cost of transfer however varies from country to country and depending on the method of transfer (for details about formal remittances and transaction costs, see Chapter 3 by Bhupal Singh, this volume). According to Remittance Prices Worldwide, remittance transfers to South Asia from certain remittance corridors are among the least costly corridors in the world. However, there is still room for lowering the costs of remittance transfers and such initiatives will benefit the migrants, their receiving households, and the states. For instance, almost US$11 billion in remittances flowing from the USA to India in 2012 and lowering the cost of making remittances along this corridor, according to a




World Bank estimate, from 4.8 per cent to below 2 per cent would translate into an additional US$333 million reaching beneficiaries in India (World Bank, 2013: 25). Thus, there is genuine need for reducing the transfer costs of remittances in South Asia.

Recent literature has focused extensively on how to reduce the costs of remittance transfers (IFAD, 2006; World Bank, 2006; Agunias, 2006; Alarcon et. al., 1998; Buch and Kuckulenz, 2009; Buencamino and Gorbunov, 2002; Taylor et al., 2013). In the light of the findings of the existing literature, we propose several gender-sensitive ways to reduce transaction fees on remit-tances and leverage their development potential in South Asia. Existing literature almost unanimously identifies ‘competition’ as the single most important factor in reducing the transaction costs of remittance transfers. Therefore, a more competitive environment in South Asia is required to encourage more national and international players to provide remittance services. There is also a need to expand the access to clearing and settlement systems and to adopt new technologies that are gender-sensitive and will provide greater efficiency, lower costs, and extended outreach. Additionally, the governments of both host and home countries, international organiza-tions, migrants’ associations, and microfinance institutions should coordi-nate initiatives to reduce the transaction costs. However, it should be clearly understood that migrant remittances are primarily personal and private transfers, not commercial or public transfers.

Promoting good practice in remittances is an essential component within the ambit of remittance studies. In the line with a report published by International Fund for Agricultural Development (IFAD, 2006), good prac-tices in remittances include greater availability and access to remittances in rural areas; more options for linking remittance services and access to other financial services such as savings, credit, and insurance; transparent service fees and costs in remittance transactions; and solutions that minimize trans-action costs (IFAD, 2006).

Given the predominantly rural background of the workers and the poor financial infrastructure in South Asia, a solution to the problem should be found in technology (Rahman, 2008). Technology solutions are indeed the current frontier in remittances. Two gender-friendly remittance transfer tools can be considered such as: (i) mobile-to-mobile remittance transfer ser-vices and (ii) card-based remittance transfer services. These two methods of remittance transfers have the potential not only to reduce the fees for remit-tance transfers but also to make remittance transfers culturally convenient and faster for both remitters and recipients. There has been an emergence of mobile banking and transfer services worldwide. Some countries in South East Asia (e.g., the Philippines) and Africa (e.g., Kenya and Uganda) can make use of this new technology. Prospects for mobile remittances in South Asia are promising because of the high rate of mobile subscriptions in South Asia (Rahman, 2008, 2009b).




Prepaid card-based remittance transfers are emerging as another solution for international money transfers, and have been particularly popular in the remittance corridor between North America and Latin America (Orozco et al., 2007). In general, card-based remittances include several models, namely, card-to-cash, dual-card, and recipient-only-card. Many of these are available in the host countries under study. What South Asia can do is to coordinate with the host countries and make the necessary arrangements at the gov-ernmental levels to include South Asia within the coverage of these cards. Internationally recognized card companies, such as Visa and MasterCard, can also be approached for this purpose. This will make remittance transfer cheap, fast, and convenient for both migrant workers and their recipient families. However, the card-based remittance services will have difficulty covering remote places in South Asia due to the current state of disbursement networks, for example, the absence of ATMs and poor banking infrastructure.

Implications of migrant remittances for development

The motivations for sending remittances are often linked to the patterns of usages of remittances back home. In other words, forces that determine remittances are often unequivocally connected to the uses and the perceived impacts of remittances. We, therefore, provide determinants, uses, and impacts of remittances together for a better understanding of the implica-tions of remittances in South Asia. As we discuss various theoretical per-spectives for determinants, uses, and impacts in the next two sections, we provide empirical findings from South Asia and other regions to reflect on the current development in the field.

Remittance determination

The question what determines the remittance flows to developing countries has drawn attention of scholars and considerable amount of studies devoted to investigating the determinants of remittances since the 1980s (Stark, 1991; Adams, 2009). Once determinants are known, examining the implica-tions on the families, communities, and the receiving countries becomes easier. Remittances are fundamentally macro-level flows. However, in order to gain deeper understanding these macro-level flows, micro-level processes are important to understand. Remittance practice, primarily an individual-level behavior, is shaped broadly by two factors: (i) the migrants’ ability to earn and save from earnings overseas and (ii) the motivation to remit savings back to the origin country. At first, migrants need to earn sufficient money to live in the destination country to be able to save from earnings to share with families and communities in home country. Their level of earn-ing obviously is contingent on the quality of human capital, availability of work, recognition of skills, immigration status, and legal issues in destina-tion country (Massey and Basem, 1992; Rahman and Lian, 2009).




The motivation for remittances is often determined by the family situa-tion of migrants left behind, the strength of social and symbolic ties with members in origin country, social and cultural pressure on migrants to remit, duration of migration (i.e., permanent or temporary migration), civil status of migrants (i.e., married or single), immigration status of migrants (i.e., regular or irregular migrants), immigration policy of the destination country, as well as some macroeconomic factors such as rates of interest in home and host countries, the foreign exchange rate, and the rate of inflation in the home country (Stark and Lucas, 1988; Stark, 2009; Glytsos, 2007; OECD, 2006) and tax provision in destination countries. In studying remittance determination, some important terms have been developed to explain the determinants of remittances such as ‘pure altruism’, ‘pure self-interest’, ‘tem-pered altruism’ or ‘enlightened self-interest’, ‘implicit family coinsurance’, ‘implicit family loan arrangement’, ‘migrant’s saving target’, and ‘portfolio management decisions’ (for details, see Lucas and Stark, 1985; Straubhaar, 1988; Caces et al., 1985; Stark, 1991; Russell, 1986; Poirine, 1997; Taylor, 1999; Vanwey, 2004; Glytsos, 1997, 2007).

Two pioneer scholars, Robert E. Lucas and Oded Stark, made systematic effort to explain the reasons for remitting in the 1980s. They use the terms ‘pure altruism’, ‘pure self-interest’, ‘tempered altruism’ or ‘enlightened self-interest’, ‘implicit family coinsurance arrangement’ to explain the determi-nants of remittances in the developing countries (Lucas and Stark, 1985; Stark and Lucas, 1988; Stark, 1991). One of the most obvious motivations for remitting is, in their view, pure altruism, that is, the care of a migrant for those left behind. Under a pure altruistic model, the migrant derives sat-isfaction from the welfare of relatives or known persons. The pure altruistic model advances several hypotheses, for instance, the amount of remittances should increase with the migrants’ income and decrease with the domestic income of the family, and decline over time as the attachment to the fam-ily gradually weakens (Stark, 1991). In contrast to pure altruism, pure self-interest is also a motivation to remit. In this case a migrant remits with the aspiration to inherit, to demonstrate laudable behavior as an investment for the future or with the intent to return home.

According to Lucas and Stark, pure altruism and pure self-interest are two extremes and may be inadequate to explain the extent of remittances and its variability in certain conditions. They, therefore, introduce another term called ‘tempered altruism’ or ‘enlightened self-interest’ to explain the moti-vation for remitting in the developing countries (Stark and Lucas, 1988). In tempered altruism or enlightened self-interest model, remittances are viewed as part of a self-enforcing contractual arrangement between migrant and family. In this context, the intrafamily understanding is seen as an ‘implicit co-insurance agreement’. Remittances take the form of an insurance premium for the finance of migration risk that covers the family risks involving agri-cultural production and technological investment (for details, see Stark, 1991;




Taylor, 1999; Glytsos, 2007). Arrangements between a migrant and family are voluntary and thus self-enforcing. Mutual altruism is the most obvious force that enforces the mutual contracts between migrants and their families. Stark and Lucas’s research draws from the experience in Botswana, and they show how, in Botswana, migrants to South African mines remit so that their fami-lies can purchase farms and tend to cattle, both of which are major forms of asset holding and wealth in Botswana (Stark and Lucas, 1988).

Building on works of Robert Lucas and Oded Stark (Lucas and Stark, 1985; Stark and Lucas, 1988; Stark, 1991), Bernard Poirine offers an ‘implicit family loan arrangement’ theory that is considered alternative to the implicit co-insurance arrangement’ and the ‘tempered altruistic’ theory of remittances. The core of Poirine thesis is that there is an informal financial market among migrant and non-migrant family members and the key purpose of this infor-mal market is to finance investments in human capital with ‘informal loan’ that is repaid by remittances (Poirine, 1997). Poirine’s theory of ‘implicit family loan arrangement does not rely on risk spreading and does not imply that remittances are invested in agricultural production or technological investment as we find in Stark and Lucas’s theory, but rather that remittances are mostly consumed, a broader stance that fits well in many remittance-use experiences in contemporary South Asia (see Chapters 5, 6, 11, and 12, this volume). The key hypothesis of Poirine’s theory is that remittances mainly consist of the repayment of an informal loan taken by migrants in order to secure a better life. The strength of Poirine’s ‘implicit family loan arrange-ment’ lies in its ability to explain a battery of questions such as why emi-grants remit, what is the time profile of remittances, how it depends on the intent to stay, on the expected length of stay, what use family members make of remittances, and how the home family consumption behavior is affected by the economic prospects in the receiving country (Poirine, 1997: 590). The remittance flows found in the Pacific Islands lead Poirine to suggest that the loan hypothesis is more relevant than the coinsurance or altruistic theory.

Another way to model remittance determination is to assume that the migrants’ goal is to return home with a certain amount of savings as stated in the target income theory (OECD, 2006: 147). Target income theory adapts neoclassical theory to explain temporary labor migration. It retains the neoclassical emphasis on push–pull factors and individual cost–benefit analysis, but relaxes the assumption of lifetime income maximization (Berg, 1961; Hill, 1987). The theory assumes that the migrants’ goal is to return home with a certain amount of savings overseas. Migrants enter destination markets as target earners. When they have saved or remitted money to fulfil a target, they return to their home community (Berg, 1961; Lindstrom and Lauster, 2001). This model of remittance determination is more suitable for temporary form of labor migration found in Asian countries.

In addition to individual-level motives to remit, there are also macro-economic factors in origin and destination country, which may significantly




affect the flow of remittances (El-Sakka and McNabb, 1999). The core of this line of argument is that migrants may choose to remit their savings from host country to the origin country for reasons of relative profitability of savings in origin country and this can be explained in the framework of a portfolio management choice (OECD, 2006: 148). The portfolio manage-ment decision depends on relative macroeconomic factors in host and ori-gin country (i.e., interest rates, exchange rates, inflation, and relative rates of return on different financial and real assets). ‘Diaspora bond’ introduced in many remittance-receiving countries is an example of remittance flows to origin country.

Uses and impacts of remittances

The question whether or not migration and remittances can bring about sustained human development and economic growth in migrant-sending countries has generated substantial literature in the field (Papademetriou and Martin, 1991; Hammar et al., 1997; Nyberg-Sorensen et al., 2002; Piper, 2009; Kelegama, 2011; Jayaram, 2011; Rajan, 2012). The relationship between international migration and economic development in the home country has been traditionally explained from two contrasting theoretical approaches formulated as early as in the 1960s: balanced growth approach, ‘convergence point of view’ and asymmetrical growth approach, ‘divergence point of view’ (for details, see Spaan et al., 2005; Hermele, 1997; Ullah, 2007; Adams et al., 2012). This approach primarily posits that emigration leads to an improvement in ‘resource availability’ and ‘income distribution’ in origin areas. On the other hand, the divergence school argues that out-migration hinders development of the sending regions because it perpetuates a state of economic dependency that undermines the prospects for development. Apart from these two perspectives, there also exists a third approach called the ‘time perspective’. According to this perspective, in the short term, nega-tive factors dominate the impact of migration, while in the long term posi-tive factors come to stimulate development (Russell et al., 2006).

de Haas (2007) distinguished four periods in the post–Second World War thinking on migration and development and discussed broadly three theo-retical perspectives to elaborate the debate on migration, remittances, and development. First, the developmentalist and neoclassical views (migration optimists) that dominated in the 1950s and 1960s see migration in the posi-tive light. The migration optimists tend to think that migration leads to a North–South transfer of investment capital and subsequently to the expo-sure of traditional communities to liberal, rational, and democratic ideas and modern education that contribute to development in the developing countries (Todaro, 1969). In the 1970s and 1980s, an increasing number of empirical studies emerged that supported the hypothesis of historical structural and dependency views (the migration pessimists) such as migra-tion sustains problems of underdevelopment in the periphery (Lipton, 1980;




Reichert, 1981; Wiest, 1979; Stuart and Kearney, 1981; Rahman, 2000). The migration pessimists have argued that migration triggers the withdrawal of human capital and the breakdown of traditional village communities and their economies and this would eventually lead to the development of passive, non-productive and remittance-dependent communities (Myrdal, 1957; Frank, 1966). The migration pessimists identify two trends in the emigrant country – the ‘brain drain’ (Adams, 1969), that is, the departure of knowledgeable workers from developing countries, and the ‘brawn drain’ (Penninx, 1982), that is, the departure of young, able-bodied people from rural areas causing a critical shortage of valuable workforce.

The new economics of labor migration and livelihood approaches (plu-ralistic perspective) emerged in the 1990s to address the remittance and development debate (Stark, 1991). The new economics of labor migration integrates migration decision making with migrants’ remittance behavior and families’ remittance use in which both positive and negative develop-ment responses are possible (Stark, 1991; Taylor et al., 1996; Connell and Conway, 2000). In the new economics of labor migration, migration is perceived as a household response to income risks and investment capital since migrant remittances serve as income insurance and investment capital of households. The livelihood approach argues that poor people cannot be seen as passive victims of global capitalist forces; they actively improve their livelihoods within the constraining conditions in which they live (Lieten et al., 1989; Piper, 2007; Hugo, 2002; Dannecker, 2005, 2009). The liveli-hood approaches point to the fundamental role of human agency, and migration is seen as one of the main elements of strategies to diversify, secure, and improve livelihoods. In ‘pluralist views’, there is a greater variety of migration outcomes (migration outcomes may be positive or negative), while developmentalist and neoclassical views present positive outcome and historical-structural and dependency views negative outcome.

There exists considerable literature that reports uses and impacts of remit-tances in the global South (Papademetriou and Martin, 1991; Hammar et al., 1997; Massey et al., 1998; Cohen, 2005; de Haas, 2007, 2010a; Nyberg-Sørensen et al., 2012). Therefore, we are not providing a detailed discussion on implications of remittances on the global South. The developmental impacts of remittances are usually examined at the micro- and macro-levels (for a detailed discussion, see Cohen, 2005; de Haas, 2005). Macro-level studies concentrate largely on national outcomes (e.g., foreign exchange and labor patterns) (Taylor et al., 1996; Stinner et al., 1982; Adams, 2003; Burki, 1991; de Bruyn and Kuddus, 2005), while micro-level studies focus on the local effects of remittances, especially on the migrant families and their communities of origin (Asis, 2000; Hugo, 2002; Rahman, 2009b; Madhavan, 1985; Gamburd, 2002; Arif, 2004). Although macro-level approaches inform us a great deal about national patterns and outcomes, they cannot help us understand what remittances actually mean for migrant families and the




migrants themselves. Cohen notes that ‘micro-level approaches offer a vital alternative to the one-dimensional approach of the past’ (Cohen, 2005: 88).

Some studies have recently reported various micro-and macro-economic effects of remittances (Ratha, 2013; IFAD, 2006; Lasagabaster et al., 2005). These studies report that, at the macro-economic levels, remittances pro-vide a stable flow of funds that is often countercyclical (i.e., they increase during times of economic downturn), offer an important source of foreign exchange for countries, and exert upward pressure on the value of the local currency when the inflow of remittances is high. At the micro-economic level, remittances can improve human security, improve the standard of liv-ing (e.g., health care, nutrition, education), ease working capital constraints for investment ventures (e.g., real estate, business, and savings), play a significant role in improving gender relations, and generate ripple effects that impact on the extended family and community, due to the increased consumption.

Major implications of migration and remittances at micro level in South Asia, among others, are: influence of remittance use by social and cultural factors; investment in small businesses; a medium for upward social mobil-ity; management of challenges by families well in the absence of male; changes in gender role, enhanced education, health care, and quality of life of migrant families; increase in the power and status of women even though women being burdened by their multiple roles; consideration by left-behind women of their new roles and responsibilities as a learning experience; and left-behind children being more independent in the migra-tion process (Hadi, 1999; Thieme and Wyss, 2005; Dannecker, 2005; Arif, 2004; Gamburd, 2002; Baluja, 2003; Boer, 1981; Burki, 1991; Faraizi, 1993; Gardner, 1992, 1995; Gunatilleke, 1992; Islam, 1991; Oda, 2004; Kurien, 2008; Seddon et al., 2002; Zachariah et al., 2001; Nayyar, 1994; Rahman, 2009a; Ullah, 2010; Kuhn, 1999). These studies make a significant contribu-tion to the field by documenting some of the implications of migration and remittances for development in individual countries in South Asia.

The contributions in this volume

In touching upon nature of remittances and its development implications, this volume deals with a number of themes and geographical areas. All the contributions, in essence, have converged in the three key areas: (Part I) theoretical and methodological issues in remittance research; (Part II) remit-tance transfer mechanisms; and finally (Part III) implications of remittances on development in South Asia. In Part I, we provide two chapters dealing with theoretical and methodological issues related to migrant remittances. Within theoretical issues, conceptual model for studying gender dimension of migrant remittances has been well fixed. Laying down the theoretical and conceptual foundation in remittance research carries importance in




enhancing our understanding remittance dynamics from gender perspec-tive. Part II consists of two chapters: one addresses informal remittance channel and the other deals with formal remittance channel in South Asia. This offers a deeper and firm understanding about the existing remittance transfer infrastructure in South Asia. Finally, Part III offers eight case studies on use of migrant remittances and its implications for development. Case studies cover a wide range of remittance-source regions such as Europe, North America, Arab Gulf region, and Southeast Asia and the implications on remittance-destination countries in South Asia. The various ways in which remittances and development intersect, and the question of what the role of remittances is, constitute the common and broad thread that weaves together the chapters of this volume.

Understanding the constituent component and determinants of remit-tance, channels of transfer, elements that are comprised in remittance processes and its gender dimension, usages of it, who obtains command on it, and what impacts it might bring about for the receiving ends, and, more importantly, how to study this mounting transnational phenom-enon systematically, is often ambiguous. The first chapter, Understanding Remittances: Theoretical and Methodological Issues by Md Mizanur Rahman and Lian Kwen Fee, makes an attempt to address some of these conceptual and methodological issues. First, they argue that the types of remittances have both conceptual and methodological ramifications. Second, they dem-onstrate that the questions of whether to remit or not and in what amounts are invariably tied to migration motivation. Third, they scrutinize remit-tance process by elaborating sending, receiving, controlling, and usage of remittances along gender lines. They suggest that pursuing such a concep-tual approach will enhance understanding about gender, remittances, and development in the developing countries. Fourth, they discuss methodolog-ical issues related to remittance research. They point to the fact that inter-national remittances involve at least two countries – remittance-sending and remittance-receiving countries – and research design focusing only on one end of the remittances would not produce methodologically grounded data for advancing knowledge about international remittances in today’s increasingly globalized world. They, therefore, highlight the importance of two-way surveys, mixed methods and multisited research design. Fifth, they demonstrate that migration has been a recurrent phenomenon, so are remittances. Therefore, remittances should be seen as a continuous process rather than a one-off event. Sixth, they address the issue of remittance use and how to capture the remittance use at the household level. They stress that the configuration of such research will give rise to sociology of migrant remittances in the near future.

Migration has been an issue of the males since time immemorial. However, it does not mean that women did not migrate. They did but mostly as dependents. Statistically, the number of female migration may




not have increased dramatically but a qualitative change has taken place. It is a shift from dependent to independent migrants. Despite growing inter-est in gender and migration in the previous decades, gendered remittances have not been thoroughly explored in the existing literature. There have been very few studies that disaggregate remittances by sex and recipients; as such, little empirical evidence exists as to whether gender matters in the remittance process, especially in the ability to remit, the control over the cash, and the use and development outcomes of remittances at the family level. They are not only interrelated but also cut across gender lines. The sec-ond chapter, ‘Gender and Remittances: Remodelling Remittance Exposure’ by AKM Ahsan Ullah, addresses remittance exposure across gender line through case studies in several countries in Asia. Being exposed to remit-tances, according to Ullah, means the command of the money that they earn. Specifically, this chapter examines the interplay between exposure to remittances and reverse remittance and the implications for gender relation of exposure to remittances. The author reports that although females remit a higher proportion of their income than men, they enjoy less ‘exposure to remittance’ than men at both origin and destination.

The channels that migrants use to remit have called attention of many international financial institutions and the state actors, due in part to the sheer size of international remittances and their business potential. To sup-port the transfer of funds internationally, various formal and informal funds transfer mechanisms have emerged over the decades. Formal mechanism is controlled and regulated by states, while informal mechanism exists and operates outside of conventional regulated body but is highly organized and efficient and therefore it sustains over time, despite increasing securitization of remittances globally after the 9/11.

The third chapter, ‘Formal Remittances: Costs and Efficiencies of Remittance Transfers to South Asia’ by Bhupal Singh, addresses cost and efficiency of remittance transfer to South Asia with a focus on India’s remit-tance infrastructure. Bhupal elaborates South Asian remittance market and looks into transaction cost issues, one of the most important issues in migrant remittance transfers globally. Bhupal reports that remittance trans-fer fees are competitive; especially MTOs are highly competitive in terms of transaction cost in South Asia. He found that the time efficiency is positively associated with cost involved in transferring money to India.

The fourth chapter, ‘Social Organization of Hundi: Informal Remittance Transfers to South Asia’ by Md Mizanur Rahman and Brenda S.A. Yeoh, deals with informal funds transfer system found among South Asian migrant workers in Asia. Despite the presence of formal remittance systems, migrants choose to send remittances through informal mechanisms. They identify a particular form of informal system popularly called hundi, widely prevalent among Bangladeshi, Indian, and Pakistani migrant workers in South–South migration system. Hundi fundamentally relies on mutual trustworthiness




and involves mutual obligations, assurances, and understanding. It is infor-mal but highly organized and founded on social infrastructure comprised of social and symbolic ties. Both the migrants and their hundiwala (person who deals with hundi business) capitalize on social and symbolic ties in the course of remittance process: a migrant draws on these ties to transfer funds safely and cheaply, and in a culturally convenient way, while the hundiwala uses them to make material and non-material gains. Hundi is lucrative to migrants because reliability and credibility are essential ingredients to a hundi business and these are maintained through social sanctions.

After conceptualizing remittances and documenting remittance transfer infrastructure in South Asia, this volume offers eight case studies that high-light determinants, uses and impacts of remittances in South Asia. The fifth chapter, ‘The Social Dynamics of Remittance-Receiving in Pakistan: Agency and Opportunity among Nonmigrants in a Transnational Social Field’ by Marta Bivand Erdal, reports that research on migrant remittances is pri-marily conducted from an economic perspective; the social dynamics that remittances are part of remain underexplored. Focusing on the perspectives and experiences of non-migrants who have migrant relatives abroad, Marta addresses the social dynamics of remittance-receiving in Pakistani Punjab. She reveals that the agency of receivers and complexities of negotiations are associated with remittances. She finds that remittance receivers have multiple ways of exerting power within transnational families, and actual and potential remittances are important opportunity structures within which non-migrants maximize their livelihood strategies and strive for upward social mobility.

Many migrants and their households tend to use their remittances in SMEs. Given the lack of adequate capital market for starting new businesses, remittances are potential to contribute to the development of SMEs in South Asia. The sixth chapter, ‘Remittances and SME Development: Reflections from South Asia’ by Rita Afsar, addresses the potential link between finan-cial engagement (remittances) and SME development for South Asia, with reference to Bangladesh. Rita highlights the importance of the link and identifies the possible factors that impede or facilitate such linkages. She reports that the progress regarding South Asian regional approach toward diaspora engagement and enterprise development is far slower than in the field of education and cultural exchange. She suggests that SAARC may play a proactive role to improve the investment climate and infrastructure, reducing impediments to business, and trade, facilitating FDI and labor market reforms.

A good number of South Asian migrants are living in the United States. This is a form of migration where migrants are expected to stay in the host coun-try permanently. However, they need to remit to their families back in South Asia. The seventh chapter, ‘Gendering Remittances: Contested Masculinities Among Bangladeshi Muslim Male Immigrants in New York City’ by Natacha Stevanovic-Fenn, examines the motivations to remit and demonstrates




the importance of cultural and economic forces in shaping the remit-tance practice and ensuring its continuity drawing on the experience of Bangladeshi migrants in the United States. Natacha conducted ethno-graphic fieldwork in Bangladesh and the United States to study gender and remittances among Bangladeshi migrants. She found that remitting helps Bangladeshi remitters to preserve their masculine role as providers, which in turn allows them to maintain status and honor as respectable men in both their own eyes and those of their families. Her research uncovers the mechanisms by which consistency and conformity to traditional values are challenged, redefined, and maintained transnationally.

India is the top recipient of international remittances globally. The eighth chapter, ‘Globalization of Remittances in India: Toward a Sociological Perspective’ by Vani S. Kulkarni, addresses impact of remittances in India with a distinction between internal and international remittances and then delves into the relationship between global-level remittances and the economic, social, and cultural processes at the local level in the context of India. She observes that in 2010, there was approximately 12.1 per cent increase in the remittance flows to developing countries despite the eco-nomic crisis in the West. This leads her to focus on the non-economic and the local dimension of remittances that might trigger the increase in remit-tances. She discusses sociological dimension of remittances by reconceptu-alizing the phenomenon of the local through a reappraisal of culture and emphasizes the usefulness of social relational perspective for understanding remittance phenomenon in India.

Many migrants from South Asia pass away when they go to work overseas, especially to the countries in the Arab Gulf countries. Both sending and receiving states have roles in ensuring migrant workers are protected, and, in case of death, that the families of deceased workers have access to effec-tive compensation and assistance. As a part of death worker’s compensation, migrant families are supposed to get wages for several months and other financial benefits. The ninth chapter, ‘When Money Follows the Corpse: Remittances of Deceased Migrants in South Asia’ by AKM Ahsan Ullah and Mallik Akram Hossain, addresses the mechanisms adapted in order to recover the remittances left behind by the dead migrants. Ullah and Hossain investigate the process through which this money is recovered and trans-ported to bereaved families. They go further to examine how such remit-tances are used by the family members. They report that some portion of their due remittances remained with their employers, friends, and banks in the destination country. The chapter identifies the loopholes in the process of recovery in both destination and origin country and suggests the ways to expedite the process of getting the money back.

Migrants not only send money to their households back home but also act as a transfer channel for social remittances, such as social, health, and reproductive norms, from their host to home countries. Thus, migrants’




fertility behavior is also affected by the host country’s norms in a more direct and lasting manner. For married migrants, this is expected to have some impact on fertility behavior of the couples. The 10th chapter, ‘Fertility Responses to Migrant Remittances in Pakistan’ by Mazhar Mughal and Amar Anwar, addresses the fertility response to international remittances in the context of Pakistan. Drawing on household data on economic, social, and health factors, the authors study whether and how foreign remittances to migrant households modify their reproductive behavior. The study reports that the incidence of remittances lowers the probability of women of child-bearing age to be pregnant at a given time. Fertility declines by 26 per cent among remittance-recipient households. The authors suggest that this may owe to a change in the quality and quantity trade-off equation in bringing children up occurring as a result of an increase in the household’s non-labour income. They conclude that a higher standard of living and better savings prospects may allow the remittance-recipient households to spend more on education and health of their existing children and reduce the need for their role as the household’s future breadwinners.

Gujarat is one of the major migration source states in India, especially early migrants who ventured out for better opportunity throughout the world. The migrants are contributing to their families, their joint fam-ily members, and their communities in various ways. The 11th chapter, ‘Migrants’ Private Giving and Development in Central Gujarat, India’ by Puja Guha introduces a new term ‘private giving’ and shows how this migrants’ private giving contributes to development in Central Gujarat. By private giving, Puja means those remittance transfers that are directed towards their own families, joint families, as well as community causes such as philanthropic donations and other similar individual-level contri-butions to the origin communities. She argues that the social backgrounds and migration histories, such as the destination, duration, and occupation of the migrants, have a significant influence on the nature of their private giving to the community and this in turn has an impact on the develop-ment of the region.

Nepal’s economy heavily relies on remittances. Migrant remittances make up approximately 25 per cent of the GDP of the country. Remittance is seen as a lifeline for the country and migrant households. The 12th chapter, ‘Uses and Impacts of Remittances in Nepal’ by Bhubanesh Pant, examines how remittances are used and what impacts they have on devel-opment in Nepal. Bhubanesh documents that many South Asian countries, such as Pakistan, India, Nepal, Bangladesh, and Sri Lanka, have adopted specific policies along with their emigration and diaspora policy to attract remittances from their overseas population. These remittance-augmenting policies, in his view, have contributed to the increased remittance flows to the countries in South Asia. He reports that remittance-recipient households in Nepal have witnessed a substantial rise in agricultural income after they




have started receiving remittances. Migrant households are also found to be allocating a significant amount of their income in education, health, and savings.

Given the relative dearth of knowledge on the dynamics of remittances in South Asia and its implications on development, the contributions to this volume are conceptual and exploratory in nature. Our objective is to put forward a number of new conceptual approaches and analytical frame-works that address remittances and development in the context of South Asia. These should serve first and foremost as a guide for future research, and second, as a guide for policy formulation for leveraging remittances for development.

Some final reflections

The chapters in this book constitute an initial effort to bring together stud-ies on migrant remittances that focus on conceptual and methodological issues of remittances, remittance transfers (both formal and informal remit-tance transfers), and finally determinants, uses, and impacts of remittances in South Asia. These studies show that remittances are making an impor-tant and growing contribution to balance of payments, poverty reduction, growth, and welfare. The chapters in this book largely examine the positive influences of remittances. Remittances can have negative impacts unless they are used in an efficient manner (Gunatilleke, 1992; Gamburd, 2002; Ullah, 2010; Zachariah et al., 2001; Rahman, 2009a). This volume signals that further studies are essential to investigate what negative impacts remit-tances may have at micro- and macro-levels as well.

While we have touched upon the issues of costs and efficiencies of remit-tance transfers (formal and informal channel), and highlighted the market-place for remittance transfers, opportunities to go deeper into these facts still remain. This again confirms that in-depth research focusing on what determines the costs and speed of remittance transfers, what the impact of cost has on remittance flows, what the impacts of various international and national regulations have on remittance flows, and their cheaper and safer transfers is required. One general complaint often heard from the remitters and recipients as well is that remittance services in place are not culturally convenient and fail to serve women recipients in remote place. In order to address such issues, we propose that researchers pay attention to more ethnographically focused research. We suggested the adoption of mobile technology–based remittance services as well as international card–based transfer services in this chapter.

South Asian countries are probably the largest source for male migrants globally. They are sending male migrants to two major destinations in Asia: Arab Gulf region and East and Southeast Asia. Many of these male migrants are married who want to remit only to their wives. What does this mean




to millions of unaccompanied and unmarried migrants? In order to find an answer, there should be more research on gender and remittances in South Asia. Questions such as whether remittance use varies across gender and whether male and female recipients have differential preferences for remit-tance uses require more attention. Remittances shift the control over other resources of the family. Therefore, where this leads to change in headship of the family from male-headed to female-headed households in South Asia, and whether remittance use has differential impact on girls’ and boys’ education in South Asia can be investigated. Due to the shift in gender role, woman recipients manage remittances by themselves. This is one way how migration and remittance contribute to the empowerment of women in South Asia. Traditionally, women empowerment is thought of by NGOs and studied predominantly in relation to micro-credit. Therefore, we identify a fresh area of further research on how migration and remittances contribute to women empowerment.

Finally, the chapters in this book demonstrate that migrant remittances can be an exciting field of academic study as well as a vibrant field of policy study. The multidisciplinary character and transnational dimension of migration and remittance widen its scope across social science domains. We trust this book contributes to the growing field of remittance studies in the academic and policy areas.

Notes

1. Prepared from data found in various issues of Migration and Development Briefs, published by World Bank, available at http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:21125572~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html, accessed 22 October 2013.

2. For instance, Bangladesh, India, Nepal, Pakistan, the Philippines, Sri Lanka, and Indonesia; see ‘Outlook for Remittance Flows 2010–2011’ in Migration and Development Brief, 23 April 2010.

3. ‘Remittances to South Asia boost size of middle class’ in The Straits Times, 23 October 2013.

4. Information regarding Western Union and MoneyGram was compiled from their websites; see http://www.westernunion.com and http://www.moneygram.com, accessed 20 June 2013.

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295

Index

Note: Page numbers followed by ‘f ’ denote figures; ‘t’ tables.

accidents, vehicular, 221agency of remittance-receivers,

128–30altruism, 12–13Arab Gulf countries, migrant

remittances in, 20Asian Development Bank (ADB), 4attiyo, 97, 108

Bangladesh, 137–9deaths among migrant workers, 219

compensation, 225–7detention conditions, 221job insecurity, 220lack of healthcare, 221mental stress, 220–1poor nutrition, 221tension in workplace, 220vehicular accidents, 221

family organization and gender role expectations in Islam, 172

izzat [honour], 173lazza [shame], 173new employment opportunities for

women, 174purdah [practice of female

seclusion], 173migration from Bangladesh and

remittances, 223mobile wallet account, 147protection mechanisms, 228

enhancing migrant protection, 229sufficient for recovering

remittances, 228remittances for SME development

and diaspora engagement, 140households’ income, 142–3post-migration situation, 144treduction in transaction costs, 146savings and by returnee migrants,

142–4schemes and savings facilities, 145t

for small business and investments, 143

short-term labour migration, 218–19

channels and costs of remittance transfers, 7

cointegration analysis, 82compensation, 225–7conventional focus on remittances, 5cost and efficiency of remittance

transferscointegration analysis, 82cost reduction, 71–2error correction, 83–4exchange rate margin, 85family maintenance, 85long-run cointegrating estimates, 83market, cost structure, 74, 75market competition, 81money transfer, 76remittance transfer network, 81RSPs issues, 79–80time efficiency, 76–8transaction cost and payments

assessment, 84transaction cycle, 76–7transaction cycle analysis, 84transaction fees, 78–9transfer cost and efficiency aspects, 72UAE, 77–9United States, 78–9unrestricted cointegration rank test,

86workers’ remittances, 81–2worldwide remittance prices, 73

credit card, 8

daitto, 175–6deceased migrants, remittances of

deaths in migrant workers (especially from Bangladeshi origin), 219

compensation, 225–7



296 Index

deceased migrants, remittances of – continued

detention conditions, 221job insecurity, 220lack of healthcare, 221mental stress, 220–1poor nutrition, 221tension in workplace, 220vehicular accidents, 221

migration from Bangladesh and remittances, 223

obstacles accessing remittances, 231tprotection mechanisms, 228

enhancing migrant protection, 229

sufficient for recovering remittances, 228

short-term labour migration in Bangladesh, 218–19

in South Asia, 218debit card, 8Department for International

Development (DFID-UK), 33detention conditions, 221Diasporas, 135Dutch Disease, 280

early migrants, 9, 21, 89, 98, 102economic remittance, 35–7, 194education remittance, 16, 22, 23, 39, 44,

54, 61, 130efficiency, money transfer, 74–6efficiency and remittance transfer cost,

77–9emigrants, Latin American, 8error correction, 83–4exchange rate margin, 85

family maintenance, 85Federation of Bangladesh Chamber of

Commerce and Industry (FBCCI), 151

female migration, issues of, 17–18formal remittance service providers

(RSPs), 72cost and payment infrastructure, in

India, 79–84cost structure of remittance market in

South Asia, 72–4efficiency in money transfer, 74

remittance transfer infrastructure, 72time efficiency, in India, 77

transaction fees, in India, 78–9formal remittances, see also cost and

efficiency remittancecointegration analysis, 82cost reduction, 71–2family maintenance, 85long-run cointegrating estimates, 82–3RSPs issues, 79–80time efficiency, 76–8transaction cost and payments

assessment, 84UAE, 77–9

gender and remittances, 52dependency of GDP and financial

budget, 54earning, 58exposure to remittance, 58ffamily decisions, 61female migration, 52idea of remittance, 53–4

financial crisis on migration, 54lesser exposure to remittances, 54

male migration, 52non-migrants decisions, 61possession, 59receiver, 58–9

components at receiving point, 60fin Philippines, 59

revisiting exposure, 57–8saving-remittance relation, 57futilization, 59

gendering remittancesBangladeshi American diaspora, 162–3

admitted by class of admission, 163tadmitted by metropolitan area of

intended residence, 164tadmitted by state of intended

residence, 163tdaitto, 175–6diversity visa lottery system, 163and families in Bangladesh, 167male’s position, 167remittances’ unidirectional

character, 170social meaning of not sending

remittances, 182socioeconomic profile, 166



Index 297

understanding migrants’ incentives to remit, 170

utilitarian model of remittances, 168

year wise growth of remittance flow, 165t

family organization and gender role expectations in Islam, 172

maintaining status and honour in home and abroad, 177–8

of permanent diasporas and professional workers, 161

Global Commission on International Migration (GCIM), 34

Global Entrepreneurship Monitor (GEM), 148

Global remittance Trend (GRT), 34competing discourses

money-based discourse, 34rights-based discourse, 34

globalization of remittances in India, 20, 192, 205

cultural and structural factors, 207–8economic dimensions, 194–5

buoyancy of remittances, 202cost of remittances, 200on economic growth and poverty,

202impact of remittances, 197informal channels of, 196internal remittances, 195international remittances, 198percentage share of total

remittances, 200–1RBI survey, 199–200recession and job losses, 202–3remittance flows, 198–9transfer of, 196use of domestic remittances, 196within the country, 201

formal and informal channels, 208–9fund and money transfer, 192–3

definitions, 193–4internal and international

remittances, 194non-economic aspects of, 210social structure as well as a social

process, 204sociological perspective/approach, 206sociology of glocalization, 209

Gujarat, migrant remittances in, 21Gujarat Institute of Development

Research (GIDR), 258Gujarat Migration Survey, 262

healthcare, lack of, 221human capability approach, 6hundi operation, 89, 98–9

in Bangladesh, 99under-invoicing in business, 100

features of, 94–5tformation of, 97–8in Gurail

role of social and symbolic ties, 96–7

home and host countries, 104–5international labour migration in

Bangladesh, 91in Japan, 99

collection and use of migrant remittances, 102

in Malaysia, 102–3primary hundiwalas, 103

and migrant networks, 92primary hundiwalas, 99–100remittances from East and Southeast

Asia to Bangladesh, 96in Singapore, 103–4of social capital, 93

business networks, 94long-term social and business

relationships, 93in South Korea, 101–2

collection and use of migrant remittances, 102

immigration of maleof Bangladeshi-born migrants in

New York City, 158coinsurance, 168cultural experience of remittance,

159investments, 168Muslim masculinity, 174resilience of remittance inflow,

160sociocultural milieus, 160structural conditions and

inequalities, 164immigration status of remitters, 7



298 Index

India, 139cost and payment infrastructure in,

79–84international remittances, 198migrants private givings in Central

Gujarat, 258, 261remittances for SME development

and diaspora engagement, 140time efficiency in, 77transaction fees in, 78–9

individual and collective social remittances, 36–7

informal funds transfer system, 9, 89international labour migration in

Bangladesh, 91international remittances, in India,

198izzat [honour], 173

Japan, 99collection and use of migrant

remittances, 102job insecurity, 220

Kharian-area survey, 121–2, 124kyeyo money, 89

labour migrationand livelihood approaches, 15short-term, 218–19

lazza [shame], 173long-run cointegrating estimates, 83

male migration, 52issues of, 17–18

market competition, 81mental stress, 220–1migrant remittances

in Arab Gulf countries, 20channels and costs of, 7

immigration status of remitters, 7post-9/11, 8

conventional focus on, 5in Gujarat, 21implications for development, 11

determination of remittance flows, 11–13

motivation for remittances, 12remittance practice, 11

informal funds transfer systems, 9

labour migration and livelihood approaches, 15

money transfers, 7–8debit and credit cards, 8MTOs and credit unions, 8for social remittances, 20–1

in Nepal, 21–2in Pakistan, 21post-9/11, 90post-Second World War, 14prepaid card-based remittance

transfers, 11rural areas and rural financing

linkages, 9in South Asia

diversified sources of, 3in emigration statistics, 3global remittance flows, 2–3in India, 21primary motivations for, 1reducing transfer cost, 10technology solutions, 10in USA, 19–20

unprecedented growth in, 4migrants’ fertility behaviour, 238

in Pakistan, 236migrants’ private givings, 256

in Central Gujarat (India), 258, 261destination-wise duration of stay, 267destination-wise economic

activities, 265place of residents, 264resource flows, 264

and development, 259, 260fmigration characteristics and

remittances, 263financial help/gifts, 270in the form of household level

remittances, 267Gujarat Migration Survey, 262household level remittance transfer,

274philanthropic donations, 270

purpose and proportion, 272sending family remittances, 260unpaid family work, 265utilization of remittances, 268

hand-to-hand cash transfers, 269utilization pattern in local economy,

261



Index 299

migration of females, 52–3earning, 58exposure to remittance, 59–60and financial crisis, 55of remittances, 59share in remittances, 55–6

migration of males, 52–3Ministry of Overseas Indian Affairs

(MOIA), 282mobile wallet account, 147money transfers, 7–8, 76

debit and credit cards, 8efficiency in, 74MTOs and credit unions, 8for social remittances, 20–1

money transfer operators (MTOs), 8motivation for remittances, 12MTOs and credit unions, 8Multilateral Investment Fund (MIF), 34

National Institute of Advanced Studies (NIAS), 276

negotiating remittance, 128Nepal, remittance in, 21–2

efforts to encourage remittance inflows, 288

facility to exchange foreign currency, 289

licensed agent/representative of money transfer company, 288–9

number of policy arrangements, 288overseas employment and

mobilizing remittances, 288impact of flows, 279, 284

bank accounts for transfers, 287employment on sector-wise

classification, 286–7increase in number of workers to

abroad, 284on national economy, 285–6policy initiatives, 285poverty impact, 286strengthening balance of payment,

285policy alternatives, 289

business facilitation for returnees, 290

‘development agents’ linking home and destination countries, 290

incentives for migrant workers, 290

maintenance of macroeconomic stability, 289–90

on national development strategies, 290

pooling remittances in MFIs, 291pre-departure orientation

programme, 291to promote long-term growth and

income security, 289renowned policy route, 291separate ministry to international

migration affairs, 290use of, 287

family size and economic status, 287

less productive utilization, 288on primary investment, 288purchase of basic needs, 287

New Economics of Labor Migration (NELM), 168

prevalence of, 169non-migrants decisions, 61nutrition, poor, 221

Official Development Assistance (ODA), 135

Organisation for Economic Co-operation and Development (OECD), 145–6

Pakistan, 139remittances for SME development

and diaspora engagement, 140Pakistan, migrant remittances in, 21

demographic and reproductive health factors, 246

age at marriage, 246child mortality, 247household’s sanitary environment,

247miscarriage, 247number of children, 246preference for sons, 246woman’s participation in

decision-making, 247education, 245–6female labour force participation, 246fertility responses, 236

consumption, 245disruption effect in short run, 240family planning, 242



300 Index

Pakistan, migrant remittances in – continued

fertility evolution, 240and foreign remittances, 251household wealth, 245income effect on, 239, 244–5and international migration

behaviour, 238–9prevalence in host country, 240receiving and non-receiving

households, 243savings of foreign remittances,

239–40socioeconomic variables, 244and South Asian countries, 241–2substitution effect on, 239

geographical factorshousehold expenditure, 249province-wise population

distribution, 248reproductive indicators, 249urban-rural population distribution,

247–8health-related knowledge, 246social remittances, 236

Pakistan, remittance receiving in, 115, 119

changing roles of females, 127components of social capital, 131dependent on one sender, 124on household approach, 121–2income vital to household, 131labour migration relation, 116

economic significance, 120male short-term labour migration, 119migration to Norway, 120negotiating remittance

agency of remittance-receivers, 128potential of remittances, 130power in transnational families, 128

in Pakistani Punjab, 122choice of transfer mechanism,

122–3reverse-remittances, 116senders or receivers of remittances,

116as social exchange, 130transnational families, 116–17

within longstanding transnational social fields, 117–19

post-9/11, 8, 90post-Second World War, 14potential of remittances, 130prepaid card-based remittance transfers,

11purdah [practice of female seclusion],

173

refugee remittances, 36relief remittances, 36remittance, 1, 33

capturing manifold meanings and interpretations of migration, 42

capturing remittance-induced development outcomes, 45

compensation of employees, 2determinants of, 37–8

motives for migration, 37new economics of migration, 37

development of SMEs in South Asia, 19

developmental impacts in micro- and macro-levels, 15–16

economic dimensions in India, 194–5buoyancy of remittances, 202cost of remittances, 200impact of remittances, 197informal channels of, 196internal remittances, 195international remittances, 198on economic growth and poverty,

202percentage share of total

remittances, 200–1RBI survey, 199–200recession and job losses, 202–3remittance flows, 198–9transfer of, 196use of domestic remittances, 196within the country, 201

emergence of global remittance phenomenon, 34

financial engagements of, 6–7forms of remittances, 35–7

economic remittances, 36individual and collective social

remittances, 36–7refugee remittances, 36relief remittances, 36social remittances, 36



Index 301

worker/migrant remittances in Asia, 36

fund and money transfer, 192–3definitions, 193–4internal and international

remittances, 194gender process

feminization of labour migration, 38gender role transformations, 39–40gender-sensitive methodological

approach, 39global remittance flows, 2in households, 44

preferential expenditure, 44improvements in data collection, 33–4migrant remittances in Asia, 33migrants’ transfers, 2and migration, 40–1outcomes of international migration, 4promoting good practice, 10pure altruism, 12–13qualitative data collection techniques,

42–3quantitative methods to identify

economic determinants and impacts of, 42

recurrent transactions, 43–4temporary bondage labour, 43

research on, 34–5sources of official data on, 1–2in South Asia, 1spatial breadth, 40

both-ways remittance surveys, 40–1temporary labour migrants, 34uses and impacts of, 14–16workers’ remittances, 2see also Migrant remittances

remittance flows, determination of, 11–13remittance practice, 11Remittance Prices Worldwide, 9remittance receiving

in Pakistan, 115, 119in Pakistani Punjab, 122

remittance service providers (RSPs), 72, 79–80, 84

remittance transfer network, 81remittance transfers

cost and payment infrastructure, 79–84

determinants of remittance flows, 80

costing and efficiency aspects, 72from UAE to India, 78tfrom US to India, 78t

efficiency and costing, 77time efficiency, 77transfer fees, 78

in India, 80relative cost structure, 80tworkers’ remittance inflows, 83t

in South Asia, 71cost of money transfer, 75tcost structure, 72–4efficiency in money transfer, 74–6financial flows, 71time efficiency of money transfer,

76tremittance-augmenting policies in South

Asia, 281, 282–3in Bangladesh, 283–4

information and communication mechanisms, 283

in India, 283in Nepal, 294–5in Pakistan, 283–4in Sri Lanka, 284

remitters, immigration status of, 7reverse remittances, 54

global financial crisis, 54rural areas and rural financing linkages, 9

short-term labour migration, 218–19SME development, remittances for

in Bangladesh, 137–9and diaspora engagement, 140households’ income, 142–3post-migration situation, 144treduction in transaction costs, 146savings and by returnee migrants,

142–4schemes and savings facilities, 145tfor small business and investments,

143and diaspora engagement, 136

and entrepreneurship development, 147–8

households’ income, 142–3in India, 139

and diaspora engagement, 140opportunity structure to promote

entrepreneurship, 148–9



302 Index

SME development, remittances for – continued

in Pakistan, 139and diaspora engagement, 140

post-migration situation, 144tproblems

lack or limited access to finance and equity, 141

loan sizes, 141–2low-skilled temporary migrant

workers income, 142necessity to opportunity

entrepreneurs constrainment, 141rejections for possible higher

funding, 141promote inflow of foreign

investmentspolicy reforms and incentives, 144

reduction in transaction costs, 146savings and by returnee migrants,

142–4schemes and savings facilities, 145tfor small business and investments, 143

social organization of hundi, 88hundi operation, 89informal funds transfer system, 89in South Asia, 135

social remittances, 36money transfers for, 20–1

stress, mental, 220–1

tension in workplace, 220time efficiency, 76–8time efficiency, in India, 77

transaction fees, 78–9transaction cost and payments

assessment, 84transaction cycle, 76–7transaction cycle analysis, 84transaction fees, 78–9transfer cost and efficiency aspects, 72

UAE, 77–9United States, 78–9unprecedented growth in migrant

remittances, 4unrestricted cointegration rank test, 86

vehicular accidents, 221

worker/migrant remittances in Asia, 36workers’ remittances, 81–2workplace, tension in, 220worldwide remittance prices, 73



Migrant Remittances in South Asia (Palgrave Macmillan Book) with Introduction Chapter

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