United States - ­More than 300 participants are attending the Global Forum on Remittances, Investment and Development (GFRID), an initiative organized by the International Fund for Agricultural Development (IFAD), the Population Division and the Financing for Development Office of the United Nations Department of Economic and Social Affairs (UNDESA) and the World Bank. This year, the Forum focuses on the role of remittances in achieving the Sustainable Development Goals (SDGs), and opportunities in the global marketplace.

Every year migrants send over 400 billion dollars in remittances to developing countries, far exceeding the amount of overseas development assistance (ODA). These remittances contribute to basic needs such as food, health care, education and housing in migrants’ countries of origin. However, remittance transfer costs are uneven and remain high for many migrants sending money to certain parts of the world.

Representing IOM at the Forum, Ashraf El Nour, Director of IOM’s Office to the United Nations in New York, highlighted the important role remittances play in improving the lives of migrant families. He noted: “Remittances undoubtedly lift the families of many migrants out of poverty and enhance their ability and resilience to withstand risks due to unemployment, illness, or even the adverse impacts of climate change.”

He also mentioned, however, that remittances, “on their own will not necessarily result in development if governments are not fully engaged in the provision of basic services such as social security, health and education systems.”

The Forum provides an opportunity for participants to share policy recommendations that will lead to greater impact on local development. IOM’s recommendations include: 1) enhancing the financial literacy and inclusion of families receiving remittances; 2) empowering women to have control over productive assets and participate in decision making; and 3) facilitating the transfer of migrants’ social capital such as skills and knowledge.

Furthermore, IOM is currently exploring innovative ways to make money transfers easier and cheaper. A remittance survey will be launched today (16 June) in collaboration with MONITO to show evidence of the impact of remittances and the ways in which migrants send money home, from traditional means such as through banks and post offices to mobile applications and online money transfer companies.

IOM Statement on the International Day of Family Remittances

The hard-earned money that migrants send every day to their loved ones back home represents a vital economic lifeline for millions of struggling families around the world. These remittances improve standards of living in countless ways and help to make vulnerable communities more resilient to shocks, such as economic downturns and natural and man-made disasters. Remittances increase household income and pay for basic needs such as food, education, housing and medical services. The global scale of remittances is staggering. The World Bank estimates that USD 465 billion in remittances is expected to flow into developing countries in 2017.

Recognizing the many potential benefits of remittances for those who receive them, IOM is pleased to support the International Day of Family Remittances on 16 June 2017.

1) High Remittance Costs

Remittance transfer costs remain high, particularly between countries in the global South. Intra-African transfers are the most expensive, with transfer costs averaging 9.5 per cent in Sub-Saharan Africa, compared to 5 per cent or below in some remittance corridors between the Gulf and countries in South Asia. Many migrants resort to informal channels to send money, rather than banks or authorized money transfer operators, because they are cheaper or more convenient.

Migrants who send money home need more accurate information on the remittance services available to them and their respective costs, so they can choose the most cost-effective option. Investments need to be made in new technologies for transferring money. IOM seeks to combine its knowledge of migration and remittances with the different but complementary expertise of other organizations, including the private sector, to enable improved money transfer service provision, including through mobile technologies or postal services. Better partnerships are required at a global level, between financial industry representatives and regulators, to create an enabling regulatory framework that breaks the monopolies of larger money transfer operators, promotes the use of new technology, and facilitates the transfer of smaller amounts without the restrictions imposed by anti-money laundering/counter financing of terrorism regulations.

2) Financial inclusion

Financial education initiatives for migrant workers and recipient households play a valuable role offering options to senders and recipients of low-cost transfer facilities. They also enable them to use the remittances most effectively for the benefit of their families and their communities of origin. Migrants who send and receive money need to have effective access to affordable and sustainable financial services from reliable and formal providers. This involves making financial systems more inclusive and responsive to the needs of different groups. IOM advocates the improvement of access to duly regulated, reliable and efficient financial services and products, for improved financial infrastructure, and for financial literacy opportunities for remittance senders and recipients.

3) Improving the conditions under which remittances are earned

High transfer costs typically impact low-skilled migrant workers opting to live in precarious conditions to maintain remittance flows to their families back home. The well-being of these migrant workers through decent work conditions needs to be ensured for their remittances to have a positive impact on development. The remittances that they send to their loved ones are often a significant proportion of their earnings. We should not forget the commitments that we have made as an international community under the Sustainable Development Goals to improving the conditions that migrant workers face both along the migration journey and at work. Employers and governments have a role to play in reducing these social costs, to ensure that remittances are earned under fairer conditions.

IOM is at one with the international community in celebrating the International Day of Family Remittances as an opportunity to recognize the contributions of migrants globally and to strengthen current partnerships to promote the development impact of remittances worldwide.

The two-day GFRID coincides with the third annual International Day of Family Remittances (IDFR), which celebrates the significant financial contribution migrant workers make not only to their families but also to the sustainable development of their countries of origin. On this occasion, IOM emphasizes the importance of readily available, accessible and accurate information for migrants on remittance services available to them so they can choose the most cost-effective option.

The GFRID also presents an opportunity for the international community to link issues of remittances and development with the upcoming fourth thematic session of the Global Compact for Safe, Orderly and Regular Migration, “Contributions of migrants and diasporas to all dimensions of sustainable development, including remittances and portability of earned benefits”, to take place in New York on 24 and 25 July.

For further information, please contact:

Jorge Galindo, Labour Mobility and Human Development Division, IOM HQ, Geneva. Email: jgalindo@iom.int

Lanna Walsh, IOM Office to the United Nations in New York, Tel: +1 212 681 7000, Ext. 263, Email: lwalsh@iom.int