Rethinking Remittances

1. Rethinking Remittances Steven Vertovec University of Oxford & ESRC Research Programme on Transnational Communities

2. Rethinking Remittances 1. Some facts and trends 2. Patterns of remittance 3. Impacts: economic 4. Impacts: social & cultural 5. Conclusion

3. World Totals - Workers’ Remittances (million $ US)source: International Monetary Fund

4. Workers’ Remittances - selected Countries (million $ US)source: World Bank, International Monetary Fund

5. For Example... • El Salvador: greatest relative economic impact in Latin American and Caribbean • remittances estimated at $1.3 billion, but • economy is only $9.5 billion • remittances account for approximately 13 per cent of the economy • exceed the major exports and foreign assistance • up to one-third of families receive remittances

6. Who sends remittances? • Sent by entire spectrum of migrants: • legal/illegal • permanent/temporary • upper-class/working class • middle-aged/young • married/single • male/female • Changes per length of stay, stage of life

7. Sent to Whom? • Overwhelmingly, Family… • But divergent patterns of reception: e.g., Bridget Anderson’s research on female migrant domestic workers: • Among 83 women from four nationalities • Only 2 sent money back to husbands (most sent to mothers, sisters, daughters) • “The response was absolutely clear and ‘transnational’: men are not to be trusted.”

8. Sending Remittances • Firms used by migrants in the USA to transfer money • 43,000 outlets; 36 million transfers in 1996 • ($29.6 billion remitted out of USA in 1996) • average amount remitted: $320 • use variable exchange rates; pay transfers in currencies of country of destination • may skim off around 20 per cent, rather than the often advertised commissions of less than 7 per cent

9. Sending Remittances (cont’d) • Remittance Means: • Formal government schemes (e.g. bonds) • Checks, money orders, electronic transfers • Couriers, post, carry by self, friends, family • In-kind (clothes, consumer goods) • Means tends to vary by national group • e.g., Salvadoreans: small couriers Dominicans: remesadores Mexicans: money orders & wire

10. Presumed Negative Effects • Displaces local jobs, income • Induces consumption spending • High import content of consumption • Inflates local prices of land, housing, food • Creates disparity, envy between recipients and non-recipients • Creates dependency

11. Landless Rural Worker Small Farmer Unskilled Urban Worker Skilled Urban Worker Total Millions of US$remitted 1990 554 62 666 718 2,000 Effect on Production in Agriculture 567 65 622 485 1,739 Petroleum 30 3 31 31 95 Manufacturing 468 53 499 491 1,511 Services 591 58 610 639 1,898 Commerce 403 43 428 404 1,278 Total $2,059 $222 $2,190 $2,050 $6,521 Estimated ‘multiplier’ effects of migradollars on production in Mexico (source: Durand, Parrado and Massey 1996)

12. Wider Impacts • Community level: • normative transmigration • Building new districts • Local markets more frequent • Hospitals, mosques, schools, orphanages, health clinics, sports facilities • Development: e.g potable water projects • Sustain war effort / perpetuate conflict • More beer! Festivals and celebrations

13. Wider Impacts (cont’d) • Restructuring local status hierarchies • class, reputation: family and group • Stimulating religious fervour / ritual activity • Altering consumer tastes, styles, expectations • Transforming gender relations • Costlier weddings, inflated dowries • ‘transmigrants get the nicest girls’ [& boys!] (Riccio 1999) – reshaping marriage patterns

14. Conclusion • Must understand ‘transnationalizing’ of social, cultural, economic and political life • remittance represents not just finance, but the global ‘stretching’ of: • household decision-making • family life course and strategies • collective resources • social structure / cultural institutions • community activities and development • each case highly conditioned by context(s)