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Undergraduate Economics Association 10/2/2012

Undergraduate Economics Association 10/2/2012. Announcements. European Union in Crisis: Hopes and Woes of Politics and Economics Rishi Chakraborty-- Africa’s Challenge in Developing Migrant Remittance Markets Daniel Currie-- Problems With Small Governments

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Undergraduate Economics Association 10/2/2012

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  1. Undergraduate Economics Association10/2/2012

  2. Announcements • European Union in Crisis: Hopes and Woes of Politics and Economics • Rishi Chakraborty-- Africa’s Challenge in Developing Migrant Remittance Markets • Daniel Currie-- Problems With Small Governments • Abdul Hannan-- The Multilateral Trading System: Strengths & Challenges from Least Developed Countries' Perspective

  3. Economics Majors Expo • Members of the undergraduate club to join the economics department in staffing the table at the Majors Expo • October 18th 12:00-3:00, GSU Metcalf Ballroom (775 Commonwealth Avenue) • Email uea@bu.edu

  4. Africa’s Challenge in Developing Migrant Remittance Markets Rishi Chakraborty

  5. What are Remittances? • IMF Definition: • Compensation to Foreign Employees • Migrant Worker’s Remittances • Transfer of Funds between Individuals • Migrant Workers to Country of Origin • $375 billion & 12.1% growth (2011) • Income to Households • Development & Poverty Alleviation • Human Capital Formation

  6. Stable Source of Foreign Exchange

  7. Regional Remittance Flows

  8. Migrant Remittance Costs

  9. Africa’s Remittance Markets

  10. Factors for High Costs & Inefficiencies 1) Low Competition • 100 MTOs dominate 90% of Remittance Services • Post offices lack cash flows, training & infrastructure 2) High Regulation & Barriers to Entry • Exclusivity Agreements (Western Union & MoneyGram) • Only Banks, MTOs & Foreign Exchange Bureaus authorized 3) Poor Rural Coverage • 64% of branches serve 83% of population • High transport costs 4) Lack of Access to Financial Instruments • Low savings, loans, interest & insurance • Prevents Effective usage of Remittance flows

  11. Lack of Competitors

  12. Potential Areas for Improvement • Need for Research & Timely Information • Enhancing impact of public policy on remittances • Increased Competition to Lower Costs • Reducing Regulations & Exclusivity Agreements • Providing Incentives for New Entrants • Microfinance for rural coverage & poverty alleviation • Improving efficiency of Remittance Markets • Providing training & resources to post offices • Encouraging technological innovation (Cell phones) • Educating rural population in financial services

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