More needs to be done to enhance the development impact of
remittances to Least Developed Countries (LDCs), according to a new
report jointly published by IOM, the government of Benin and the
UN’s Office of the High Representative for the Least
Developed Countries, Landlocked Developing Countries and the Small
Island Developing States (UN-OHRLLS).



Whilst remittances to LDCs continue to represent one of the main
sources of external finance and effectively contribute to poverty
reduction, the report highlights the need for governments to set up
programmes and policies to encourage migrants to remit through
formal channels and to invest at home.



These include tax relief for migrants remitting money through
official channels, financial products to attract migrants' savings
such as India’s Millenium Deposits or Bangladesh’s
Non-Resident Foreign Currency Deposits, the setting up of matching
funds for development projects and the mobilization of
philanthropic contributions of the diaspora as practiced in Mali,
Senegal and Burundi.



The report, which contains papers prepared by leading experts for
the February 2006 Ministerial Conference of LDCs in Benin,
highlights the fact that a high proportion of remittances are sent
through informal channels because of a lack of efficient, adequate
and reliable banking facilities, high transfer costs and low access
to the formal sector.



It calls for a lowering of remitting costs through innovative
microfinance institutions such as Haiti’s FONKOZE, which
through a partnership with a US based bank, offers more affordable
or flat fee transfers.



Recommendations contained in the report, to be submitted to the
High Level Dialogue on International Migration and Development in
New York in September, also include the need for governments to
improve data collection on remittance flows.



“Of the 12 LDCs surveyed for this report, only eight reported
data collection by the Central Bank or other government
institutions,” says Nilim Baruah, Head of IOM’s Labour
Migration Service. “Improved data on remittances is crucial
if LDCs want to promote sound policies to improve the development
impact of remittances.”



Remittances, an outcome of migration, constitute the most direct
link between migration and development. In 2005, 192 million
migrants worldwide officially sent an estimated US$ 232 billion in
remittances, US$167 billion to developing countries.



According to the World Bank’s 2006 Global Economic prospects,
official remittances to the LDCs increased from $6 billion in 2000
to $10.4 billion in 2004 and from $4.9 billion in 2000 to $7.7
billion in 2004 for sub-Saharan Africa (SSA) but remain
comparatively low compared to other countries



Nevertheless, they remained higher than Foreign Direct Investment
flows ($8.9 billion) but represented only half of Overseas
Development Assistance, which reached $ 25 billion in 2004.



The report is available online at "paragraph-link-underlined" href="http://www.iom.int" target=
"_blank" title="">www.iom.int



A press conference on ways to enhance and improve the development
impact of remittances to LDCs will be held between 10.00 and 10.30
on Tuesday 4th July in Salle de Presse 3, Palais des Nations,
Geneva with Mr. Anwarul Karim Chowdhury, Under-Secretary-General
and High Representative for UN-OHRLL and Mme. Ndioro Ndiaye, Deputy
Director General, IOM.