It's Time to Talk About Remittances

I recently came across a post from Kevin L. Brown on the power of remittances. In 2022, remittance flows to the Global South hit $626 billion, making official development assistance—which topped out at $204 billion that same year—seem paltry by comparison.?

As Brown points out, we spill a lot of ink on ODA: where it’s coming from, how it’s being used, and whether it’s enough. Rarely do we talk about the work that communities are doing on their own. This is a mistake—unlike ODA, remittance flows are stable, and actually can increase during times of crisis or upheaval. According to the World Bank, remittances have helped lower poverty by nearly 11 percentage points in Uganda, 6 percentage points in Bangladesh, and 5 percentage points in Ghana. These are not trifling figures.?

Remittances may seem outside the purview of global development, but they’re not. The reality is that transaction costs on smaller amounts of money can be painfully high, as much as 20 percent. In fact, addressing high remittance transaction costs is one of the Sustainable Development Goals (#10, for those keeping score at home).?

So what can the global development community be doing to help??

Promote financial inclusion

A proliferation of mobile money technology and platforms are making sending money across the world easier than ever. But knowing where to find them and how to use them requires outreach and education.?

Public/private partnerships

Collaborations between tech companies and governments can foster innovative solutions for streamlining remittances. Blockchain technology, for example, can increase the security and transparency of transactions, but there are other ways, too.?

Data analysis?

There are still a lot of holes in remittance data since much of it occurs through unofficial channels. Better data collection has the potential to improve insights into remittance patterns and therefore create more effective interventions.?

These are just a handful of ideas, and I’m sure you have others. Share them in the comments below, and let’s put remittances in the development spotlight where they belong.??