Foreign settlers indeed do a great sacrifice by being away from their homes, yet supporting their families and communities of origin by sending money home as an international money transfer. The whole world honours them every 16th June, as it’s the International Day of Family Remittances (IDFR).
Remittances matter more than ever during this time of crisis when the whole world is terrified at the hands of coronavirus and many people are struggling with unemployment. Financial aid from a relative or family member is golden in this time of the pandemic. Foreign remittances are very important for so many reasons and here are some:
- Remittance flows have multiplied five-fold over the last 20 years. That has helped in individual poverty alleviation in many countries.
- More than 70 countries rely on remittances, and more than 4 percent of their GDP comes from remittances.
- There are families in which about 60 percent of their household’s total income comes as remittances, thus it is a lifeline for millions of families.
- For many recipients, remittances provide food security, shelter, clothing and other basic needs, being the survival income.
- Medical expenses, school fees or housing expenses are also met with remittances.
- Remittances are also an invaluable contribution to the sustainable development goals of the receiving country as it helps to stabilize the country’s economy, brings foreign investments, funds business startups, alters living conditions, infrastructures etc.
Migrant remittances play a significant role in poverty alleviation and economic development more broadly. Remittance payments directly benefit the individuals and households to whom they are sent by becoming a stable source of income. No agencies or governments have a say in when, where or how to spend the incomes coming from online money transfers, but the recipients themselves can decide it. However they spent it, it has an indirect impact on the country’s economy.