ACP EU Migration Action published a new report emphasising the important role of remittances in development as they are a steady, reliable source of investment that helps millions of individuals and households to raise living standards. High cost and the obstacles to access affordable formal remittance channels are few examples. By proposing solutions as to improve domestic payment infrastructures and grant migrants access to new technologies, we contribute to creating an environment that benefits the lives of migrants, their families and communities.
Formal remittances to developing countries were estimated to have exceeded USD 601 billion in 2015, an amount roughly three times larger than overseas development assistance (ODA). They provide a lifeline for some of the world’s most vulnerable and low income households, both by contributing to basic needs such as food, health care, education and housing, and by helping to manage external shocks and fluctuations in income. Beyond this, remittances provide a vital source of foreign exchange for governments and, by some accounts, now form the largest source of external financing in developing countries (excluding China). For some countries they can account for as much as a third of GDP. Reports also suggest that they are one of the least volatile sources of external finance and have proved to be more stable than private debt and portfolio equity flows. Even when compared to less volatile components of capital flows such as Foreign Direct Investment (FDI) and official aid flows, remittances have been found to fluctuate less over time.
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Source: Joint Migration and Development Initiative; 18. 5. 2017