12
Jun
09

Send me the money

_44183359_moneycount1_apDoes your income rely on money sent from a family member working abroad ? Have you travelled away from home to find a job to help support your family ?

If so, you are part of a hugely important area of the world economy – remittances. Last year, an estimated 305 billion dollars of remittances were sent around the globe.

One of the big questions of the global downturn is:  What impact will the recession in the big rich economies of the US and Europe have on the amount of remittances sent home to poorer, developing nations ?

_41025974_migrantsbody

Here’s a story about Mexico, which has seen a big fall in the cash sent home from the U.S. , as unemployment there has risen.

In Spain – which has the highest jobless rate in Europe – Bolivian women seem to be holding on to their jobs.

Are women better at saving money for their families than men ?

Here’s a blog at the World Bank which suggests the value of remittances isn’t falling as sharply as some think. 

But parts of Africa are being hit.

whittingtonI’m James Whittington , in charge of business programmes at the BBC and next week we start something called Taking the Pulse of the Global Economy.

Post below if you have something to share with us.


12 Responses to “Send me the money”


  1. 1 Tom K in Mpls
    June 11, 2009 at 16:36

    Remittance takes money from a useful and qualified worker which undermines the local economy where it was earned. This is not good. Then the money goes to add to a local economy that is, in part, now based on an non-earning, unreliable non-worker. Also not good. This is as bad in the same way as illegal immigration. Also remittances are often practiced by illegal immigrants. It is a form of a global welfare that no country can afford.

    The best way I can see to stop it is to stop the availability of jobs. The only way I see to do this is to fine individuals/companies $10,000 US (or local equivalent ) for each illegal immigrant hired. Then let the immigrant find their own way. This will dry up the current ready source of jobs for illegals and eliminate the flow.

  2. 2 Robert
    June 12, 2009 at 17:01

    Re Remittancies from Europe to poorer countries. It works the other way round as well. There are plenty of expats from Europe and America working in all corners of the world. I am one myself. Some of the money we earn is spent in the local economy and some is sent home to support our own families. In the global economy money flows both ways. It would be interesting to see how much money flows into developed countries from thier own expatriate workers.

  3. 4 Tan Boon Tee
    June 13, 2009 at 04:25

    It is a myth that only poor people migrate to other richer countries to do the less-than-glamour jobs and remit their earnings home.

    In fact, professionals, highly qualified technicians and well-educated personnel have been making exodus from the third world to other more prosperous nations, gradually bringing over their families and perhaps sending some money to the relatives. Meanwhile, this trend is reversing; a good number of capable and knowledgeable people move to the developing countries from the first world.

    Verily, remittances from overseas make up a good percentage of the GDP in poor nations. With the current economic meltdown and increasing unemployment rate worldwide when expatriates are the first ones to be retrenched, can the situation be sustainable? For how long?
    (tanboontee)

  4. 5 Kepa
    June 13, 2009 at 07:33

    Usually we people think of remittances, what comes to mind is inflows from rich western countries (US, Britain, etc) to Africa or 3rd world country. However, huge funds made their way in the reverse way – the so call experts.

    That’s one reason why Africa remains poor – donor funds comes and goes back almost wholly – a cycle just as the water cycle.

    We need to think of way to stop this.

  5. June 13, 2009 at 12:45

    Give me my money in Euros.

  6. 7 Robert
    June 13, 2009 at 17:56

    Tom

    That wasn’t my intent. I was thinking more about individuals personal pay, rather than a large company sending pay back to HQ. They are different issues.

    But as Kepa has pointed out poorly managed funds can end up simply sending money back to the west through the highly paid help who don’t develop local solutions properly. It couldn’t be therefore part of the problem, so I agree it would be an interesting idea to find out about. But not all expats are a bad idea. Their use in the right places, doing the right thing at the right time is the best solution, even though it temporarily means money leaves the country they can leave a country in a better position for the future.

    • 8 Tom K in Mpls
      June 16, 2009 at 05:12

      I nudged, but I agree. Note the frequent use of the word illegal in my first post. With proper controls and enforcement immigration adds a lot to the world.

  7. 9 Mark Gregory
    June 15, 2009 at 20:34

    Hi, I’m Mark Gregory, BBC International Business Reporter. As Tan Boon Tee points out some poorer countries’ economies depend on the money sent home by migrants. It’s maybe worth spelling out just how dependent they are. For countries like Moldova and Tajikistan remittances make up a third of their national income. In the Philippines, its a fifth. Proportions are similar in lots of other places. In fact overall money sent by migrants provides more income for developing countries than either official aid or foreign investment. But now the party is over – after years of very rapid growth, this year for the first time anyone can remember, the value of remittances is expected to fall. Millions of migrants have lost their jobs or seen their incomes slashed thanks to recession in rich nations. My worry is this could massively increase poverty in places that were already struggling. (Though the World Bank seems to think remittances have actually held up rather better than aid or investment flows to poorer nations, which have both slumped as a result of the financial crisis.) What does anybody else think?

    • 10 Tom K in Mpls
      June 16, 2009 at 15:33

      I agree completely. That was my point. “Then the money goes to add to a local economy that is, in part, now based on an non-earning, unreliable non-worker. Also not good.” Maybe I should have said ‘local non worker’ . If the economy does not have a strong local base, any prosperity is pure illusion. This applies to the African mining and remittances. All illusion.

      The poor are not getting poorer, you simply get to clearly see what the true economy is like.

  8. 11 Stanley Nebo
    September 1, 2009 at 05:14

    I’m one of those who managed to penetrate the blue sky and landed in one of the pasture land. I’m from the land that witnessed 14yrs of civil unrest in west Africa. the employment rate and standard of living before the war was better but all deteriorated. However, good number of her citizens went abroad and greatly sending back money to friends, love ones and family members. this is helping to reduce more pressure on government to meet up more obligations for the citizens. I think the poor in my country are getting better and self reliance, engaging into small business than before. we’re(abroad) making great impact on the economy back home, giving it positive growth.

  9. September 1, 2009 at 20:44

    Here, in the USA we have problems with illegals and is hard for American’s not to be upset, they have such define atittude we the people of the United States have allow many to come to our beloved America. and they sure have come and destroy, abuse, insult and take all they can. And know that we are suffer badly if we speek we are racist. If not been racist at all is been fair I’m American and love honor my homeland and I’m tired to see my amazing America been abuse.


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