THE INFLUENCE OF REMITTANCES ON THE GLOBAL COMMUNITY Kristin Johnson, Ph.D. Department of Political Science.

THE INFLUENCE OF REMITTANCES ON THE GLOBAL COMMUNITY

THE INFLUENCE OF REMITTANCES ON THE GLOBAL COMMUNITY

Kristin Johnson, Ph.D.

Department of Political Science

Global remittance flows

In 2010, the World Bank estimated that personal remittances totaled $440 Billion US Dollars.Remittances to Developing countries are estimated to total $325 Billion US Dollars.

This is larger than Official Development Assistance & close to surpassing FDI.

Data are from World Bank Staff estimates based on the International Monetary Fund Balance of Payment Statistics for 2008.

Global remittance flows2010 Top 15 Remittance Receiving CountriesIn Billions of Dollars

Data from the World Bank Remittances & Migration Factbook 2011

Global Remittance Flows

The United States – Mexico remittance corridor is the largest in the world, with World Bank estimates of totals exceeding $48 Billion in 2009.

Data from the World Bank Remittances & Migration Factbook 2011

2010 Top 15 Remittance Sending CountriesIn Billions of Dollars

Remittances & poverty

Support a shift from subsistence household production to purchase of consumer goods

Reduce vulnerability to external shocks

Increase capacity to meet basic needs and asset accumulation.

For populations at the highest poverty levels, remittances:

http://www.itnewsafrica.com/2010/10/econet-upgrades-money-transfer-service-in-burundi/

Remittances & Poverty: Mexico

In less wealthy southern Mexican States, the poorest 30% of the population is approaching the national mean in household expenditures

The Federal Reserve Bank of Dallas estimates that 80% of remittances in Mexico are used for food, clothing & household goods Data from Germano 2008

Survey of Remittance Expenditures in 767 households in Michocan, Mexico

REMITTANCES & disasters

http://www.csmonitor.com/World/Americas/2010/0127/Haiti-economy-shows-signs-of-life-after-earthquake

Remittances provide a critical source of monetary inflows following catastrophic events.

Following the Haitian earthquake, 200,000 Haitian guest workers in the United States remitted an increased $360 million dollars to their families in Haiti.

REMITTANCES & infrastructure

http://news.cameroon-today.com/cameroon-assou-ekotto-moneygram-african-player-of-the-month/3748/

Increasing access to fiscal infrastructure, credit, and banking

Increasing expansion of public service availability offsetting a lack of government provision.

Increasing the ability to secure more stable and permanent households and businesses

Remittances can contribute to expanded infrastructure creation and access by:

Consequences of sending remittances

Remittances contribute to increased human capital in future migrant populations.

Remittances are counter-cyclic to the economy in sending countries.

Remittances do not represent a “net loss” in domestic consumption in sending countries and are more analogous to savings.