Editor's Pick

Streamlining remittance flow

23 February 2010, 18:00 PM
EDITORIAL
Harun ur Rashid

Photo: AFP

Historically, migration has been occurring since the dawn of human civilisation. Nowadays, the issue of cross-border migration to foreign countries is largely linked to the integration of global labour markets and easy transportation. Cross-border migration is to be considered in the context of social-economic development in a "global village." One thing that must be made clear is that people do not ordinarily move from their home country unless there are compelling reasons to do so. Migrants in foreign land face discrimination, alien culture, foreign language and a different way of life. They live far away from their near and dear ones and their emotional state is often deeply stressful. Migrants send their earnings to their families. Remittances represent a lifeline for more than 700 million people in developing countries. The World Bank estimates that in 2008 remittances amounted to approximately $444 billion, out of which $338 billion went to developing countries. To put the matter in the proper perspective, the total official development aid (ODA) from OECD countries in 2008 was approximately $120 billion. Remittances from Bangladeshi migrant workers crossed $9.68 billion in 2008-09, contributing nearly10 percent of the Gross Domestic Product (GDP) of the country. By 2015, it is expected to be about $30 billion. It is good to note the labour-receiving countries have realised that they have an obligation to facilitate the flow of remittance to labour-sending countries. The G-8 Conference on Remittances in Berlin in 2008 recommended action in several areas, such as : * Facilitating remittance flows and deepening the development impact of those flows, * Attracting remittances to bankable channels, * Implementing general principles on international remittance services, * Providing innovative payment instruments. * Improvement in remittance data collection. The 2008 UN Conference on Financing for Development in Doha dedicated a side event to innovative financing mechanisms and instruments and their contribution to development. Both the above efforts are part of a global effort to facilitate remittance to developing countries, and the International Organisation for Migration has been engaged in migration issues and in the international support of remittance. The International Fund for Agricultural Development, the Inter-American Development Bank and the African Development Bank are also working on how to ensure smooth flow of remittances for development. Following the G-8 Tokyo Summit in July 2008, a Working Group on Global Remittances was set up, and it set the goal of reducing the cost of remittances by 5 percentage points in five years. The recommendations of the Working Group received strong support at the G-8 Summit in L'Aquila (Italy) in July 2009 under the presidency of Italy. For the first time at international level, the summit identified and adopted a clear and quantified goal on flow of remittances. The Final Declaration of the L'Aquila Summit adopted the following : "We will aim to make financial services more accessible to migrants and to those who receive remittances in the developing world. We will work to achieve in particular the objective of reduction of the global average costs,…generating a significant increase in income for migrants and their families in the developing world." To spell out the above commitment and to devise an operational road map, Italy and the World Bank organised an International Conference in Rome in November last year. The conference adopted twelve action plans to lower the costs of remittances and to improve development in the labour-sending countries. During the coming decades, the demand for workers in industrialised countries will increase. The UN Report prepared by the Population Division in early 2000 indicates that the population in Japan and in most countries of the European Union will decline because of low birthrate, while the average person in those countries will get older. Over the next 25 years, the EU countries will lose 20.8 million from their working-age population, while the population of the elderly, those 65 years and older, will surge by half because of better health. According to the UN report, labour force in Germany will shrink from 41 million to 21 million and in Italy by 23 million to 11 million by 2050. The report estimated that Japan, to keep its labour force constant during the next 100 years, would require an immigration program peaking at 900,000 a year in 30 years, falling to a longer term figure of about 700,000 a year. It has been suggested in the report that substantial levels of immigration will be required to maintain the economies of industrialised countries. Young people from developing countries in Asia and Africa are likely to fill the gap. The 1990 UN International Convention on Protection of the Rights of All Migrant Workers and Members of Their Families (ICMR), has not as yet received support from labour-receiving countries, including European countries. I would say that the sooner the EU countries become parties to it, the better will be the protection of rights and dignity of migrants in labour-receiving countries. The subject of remittances is, in the final analysis, inseparable from the broader issues of easy mobility of labour, ageing population in many industrialised countries, and laws on international migration protecting the rights of migrants.
Barrister Harun ur Rashid is a former Bangladesh Ambassador to the UN, Geneva.

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