by Matt Bakker, author of Migrating into Financial Markets: How Remittances Became a Development Tool
Reporter Somini Sengupta brought migrant remittances back to the pages of the New York Times on August 24, 2016. Remittances are the monies that migrant workers – who tend to be some of the world’s least affluent inhabitants – send to the friends, family, and loved ones they’ve left behind in their homelands.
Sengupta continues a familiar theme in public discourse about remittances in recent years. Much like the widely-circulated suggestion over a decade ago that the billions of dollars in remittances that migrants send their friends and families back home were “hidden in plain sight,” Sengupta’s article, “What Poor Nations Need to Get By: Money From Migrants,”begins:
Amid all the mudslinging and soul-searching about global migration, one thing is often overlooked: the money.
The millions of migrant workers who drill for oil, deliver pizza or take care of older adults far from home sent nearly $582 billion back to their countries in 2015, according to the World Bank.
Perhaps it’s true, with today’s controversies over how to handle the refugee “crisis” across Europe and the sensationalist promises of Donald Trump to hermetically seal the US off from Mexico, that the world has again come to overlook the important role of remittances in sustaining families, communities, even entire nations in the face of economic hardship.
This would be a crushing blow to the World Bank. As I detail in Migrating into Financial Markets: How Remittances Became a Development Tool, the Bank and other major international financial institutions have spent much of the last two decades conducting research on remittances, raising public awareness of their importance in tackling poverty, and designing policy interventions to maximize their contribution to development. Despite all the work these institutions have put into improving statistics and raising the profile of remittances, maybe all their efforts to portray remittances as a “development tool” have been exposed as little more than hollow rhetoric.
In the end, such an outcome wouldn’t be all that surprising. The achilles heel of the financial institutions’ program on remittances was always that it centered on the transformative powers of financial markets. If only we could get banks and credit unions to recognize the money-making potential of migrants and remittance recipients, and to get these people to use such institutions for their remittance transactions – the logic went – then this giant river of money from the world’s poor could expand access to needed financial goods and services, facilitate small business development, alleviate poverty, and spark wider community and regional development.
All along this celebratory message has overlooked the major impediment to this promising future: the immigration control policies the world over that limit migrants’ legal access to the labor markets that would generate these remittance flows in the first place. Addressing this issue and freeing today’s migrants from the death-defying journeys they are currently forced to undertake in order to enter the United States or Western Europe in clandestine fashion is a far more pressing task than that of incorporating their monies into global financial markets.
Matt Bakker is Assistant Professor of Sociology at Marymount University.
A free ebook version of Migrating into Financial Markets is available through Luminos, University of California Press’s open access publishing program for monographs. Visit www.luminosoa.org to download a copy of the book.