Working in strange lands, relieving poverty at home

Migrant workers contribute more to home economies than foreign aid.

Vincenzina Santoro | Jan 25 2017 | comment

Overseas Filipino workers (OFWs) sending remittances home. Photo: Inquirer.net

One of the most imposing structures on the Lisbon waterfront is the Monument to the Discoveries showing Prince Henry the Navigator leading Portuguese explorers towards unchartered waters and an uncertain destiny in the hope of finding a more auspicious future. These Portuguese discoverers opened up global routes that were subsequently followed by millions of persons over the past five centuries. The soaring sculpture is a strong symbol and tribute to all migrants.

The Portuguese were among the first to travel to the four corners of the globe, introducing their culture, faith and language to Africa, Asia and the Americas. After centuries of migration and intermingling, more recently there has been a two-way flow among the eight countries of the Lusophone world, resulting in a two-way diaspora of Portuguese abroad and a community of mostly Portuguese-speaking Africans and Brazilians living in Portugal.

According to official Portuguese data over 22 percent of Portugal’s population resided abroad in 2015, one of the highest ratios in the world. Top destination countries were France, Switzerland and the United States. Angola, Brazil and Mozambique accounted for most of the immigrants residing in Portugal and they accounted for just under 10 percent of the local population.

Portugal is one of many countries with a long history of exporting its people to other countries. As people’s fortunes rise and fall with economic ups and downs, emigration often remains the only viable option for employment.

The search for a better, safer and more productive life knows no bounds. People leave their homes in droves to go settle in another area or country in search of opportunity. United Nations data estimate that there were 265 million migrants living in a country other than their own in 2015, about equally divided into men and women. In addition, there were over 65 million refugees, some still in parts of their own countries, forcibly displaced by belligerencies.

Those who cross frontiers to go to foreign lands have always been a significant source of poverty relief in their countries of origin via remittance of earnings sent home. The World Bank estimates that emigrants’ remittances globally may have reached $600 billion in 2016, greatly exceeding foreign aid that seems to have stabilized at about $135 billion annually and goes mostly from government to government, while remittances go from individuals directly to their families.

Emigrants’ remittances are a major driver of economic development in many low and middle income countries. There are even a few countries where the remittance inflows account for as much as a fourth or more of GDP. According to the World Bank, the largest migration corridors in the world are Mexico-United States, Russia-Ukraine and Bangladesh-India.

The United States hosts the largest number of foreign-born residents and is the largest remitter with $56 billion sent abroad in 2014. Most of these outflows went to Mexico ($25 billion), China ($16 billion) and India ($12 billion). The countries with the largest populations, China and India, also are the top two recipients of all global emigrants’ remittances. Smaller countries, however, are much more dependent on remittances as a proportion of their GDP as indicated in the table below.

Top five remittance receiving countries

In billions of US dollars, 2016 In % of GDP, 2015

India 66 Nepal 32

China 65 Liberia 31

Philippines 29 Tajikistan 29

Mexico 28 Kyrgyz Republic 26

Pakistan 20 Haiti 25

Source: World Bank, Trends in Remittances, 2016.

According to IFAD, the United Nation’s International Fund for Agricultural Development, money sent home by migrants working in other countries goes directly into the hands of the poor and should be considered the primary financial resource in alleviating poverty. Once they receive funds from abroad, families can decide for themselves how their money should be spent: more food, better clothing, needed medical care, education for girls who otherwise would be working in the fields, home improvements, property purchases, starting a business, or even community development projects such as construction of a school or clinic.

In countries where remittances make a significant contribution to GDP, often there are special savings and investment schemes, and even financial advice, for both the remitters and their families at home, in order to obtain the most mileage from this vital income source.

IFAD has estimated that remittances support about 750 million people worldwide or approximately 10% of global population and that by 2030 migrants abroad will have sent an accumulated $7.5 trillion to their hometowns in developing countries alone, a figure likely to be higher when middle income countries’ remittances are added in.

In recognition of the importance of the work of migrants and their remittances to families, in 2016 the Governing Council of IFAD declared that June 16 should be set aside as the “International Day of Family Remittances.”

To put bread on the table, the desperately poor have been emigrating from the time of the Portuguese explorers of the 15th century until the present. The adventure is not without social consequences: the sacrifices and loneliness of the emigrant in a foreign land and the sadness of the family left behind especially children.

The feelings of the emigrant have been put into poetry and song in many countries. The Italian song “Che sarà” (not to be confused with the Spanish/English “Que sera, sera” made famous by Doris Day!) lamenting the decision to emigrate (“che sarà della mia vita”….”what will my life become…?”) and expressing the fear of facing an uncertain future became an international hit and was the runner up in the 1971 San Remo song festival. It is one of many to express the sacrifices made by those who leave and those who remain. The United Nations would do well to call attention to all aspects of “remittances.”

Vincenzina Santoro is an international economist. She represents the American Family Association of New York at the United Nations. Her article is based on papers published in Family Capital and the SDGs (Sustainable Development Goals) and its forerunner, The Family and the MDGs (Millennium Development Goals).

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