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Remittances – money sent home by migrants – are an important
part of many people’s lives around the world. In disasters,
they can play a particularly important role in peoples’ survival
and recovery strategies. Despite this, humanitarian actors often
fail to consider remittances in assessments and response design
– a neglect that reflects a broader tendency to undervalue
the capacities of crisis-affected populations.
Remittances
during crises, the latest report from ODI’s Humanitarian
Policy Group argues that humanitarian actors could do much more
to explore the complementarities between emergency relief and peoples’
own efforts to support friends and family in times of crisis. This
could take the form of helping to replace lost or destroyed identity
cards which are needed to collect money; working with the private
sector to rapidly re-establish access to telecommunications so that
people can phone home; even setting up internet cafes in displacement
or refugee camps.
At this ODI event, the lead author of the report, Kevin Savage,
presented the findings. This was followed by presentations from
Anna Lindley and Helen Young, both of whom contributed to the report
by providing country case studies on Darfur and Somalia respectively.
To download a copy of the report and learn more about
this project, please visit: http://www.odi.org.uk/HPG/remittances.html.
Meeting Report
Following an introduction from Christopher McDowell, Kevin
Savage presented the main findings of the recently published
HPG report.
Remittances – generally considered transfers of money between
migrants and families they have left behind – were valued
at 268 billion USD in 2006, far exceeding aid flows. They differ
from other flows because they go directly to households and are
largely used for daily expenses. This research focused specifically
on the role of remittances in crisis settings, examining two questions:
(i) What role do remittances play in peoples’ survival and
recovery from crises?
(ii) What impacts do crises have on remittances?
Research findings
Savage noted that the research findings verified what others have
observed: remittances are crucial in meeting household needs. The
findings also highlighted the fact that recipient households are
often highly dependent on remittances, so they are particularly
critical during crisis periods.
Savage pointed out that remittances can affected by crises in different
ways:
• The sender may return home as a result of the crisis. With
the high costs of immigration,, the loss of remittances for the
household could be permanent.
• Mechanisms for sending remittances may be disrupted (bank
transfer systems can become disrupted, ID documentation may be lost,
displacement can disrupt formal and informal networks).
Research Implications
The implications of the research are that remittances need to be
better understood, appreciated, and incorporated into assessments
and programme designs by aid agencies in emergencies. It is also
important to recognise the positive impacts of migration that enable
remittance flows to occur. Programmes and policies should support
the continuation of remittance flows and further engage with migrant
communities.
The receipt of remittances does not necessarily mean that a household
is less vulnerable in a time of crisis, because, as outlined above,
households that rely on remittances might have this income cut off
during a disaster. Aid agencies should design programmes in a way
that is complimentary to remittances with:
• Greater flexibility for in-kind goods.
• Support for family tracing.
• Support for communication and documentation (such as investing
in communications through the distribution of scratch cards or supporting
mobile network recovery).
• Support for/engagement of senders to enable them to continue
sending funds (compassionate leave so senders can return home, supporting
travel costs, etc).
• Stronger engagement with migrant communities.
Savage concluded by stating that remittances play an important
role in helping people survive disasters, but given their vulnerability
to disruption, they cannot be seen as a substitute for other assistance.
Anna Lindley: Somalia Case Study
Anna Lindley discussed the Somalia case study, which looked at the
role remittances played for households in Hargeisa in Northern Somalia.
She began by outlining the research findings on remittances and
the migration patterns that affect them:
• Remittances are main source of income for 20-25% of the
population of Hargeisa.
• Shifting migration patterns have changed the dynamics of
remittance flows to Somalia - whereas pre-war migration mainly involved
men going to the Gulf States, Europe and the United States now account
for the vast majority of recorded remittances.
• Men still dominate as senders, but there are now also a
substantial number of women sending remittances.
• Spousal remittances are less common, with siblings being
much more prominent remitters (40%).
• Remittances vary, but averaged 200USD per month in the sample
group, putting recipient households in the middle income group.
• Remittances play variable roles in recipients’ livelihoods:
for some they are just one of a portfolio of various livelihood
strategies, whereas others relied heavily on them as their main
or singular source of income.
• Relative stability and good communication facilitates the
sending of remittances, but questions about future stability and
lack of credit facilities pose obstacles.
• Crises can trigger the sending of remittances but it is
then hard for migrants to later withdraw support.
Lindley noted that remittances are intertwined with patterns of
regional and global mobility. Remittances can encourage global mobility,
but the responsibility to send money home may discourage the remitter’s
return. Immigration regulations can separate relatives who might
otherwise regroup overseas. Future remittances will also be affected
by migration patterns due to changes in the political climate, the
aging of overseas remitters and the general profile of migrant communities.
Finally, Lindley identified policy issues to consider:
• Keeping money transfer channels open
• Exploring potential to leverage remittances in more stable
areas
• Increasing dialogue between diaspora organisations and traditional
NGO actors
Helen Young: Darfur Case Study
Helen Young began by situating the Darfur remittance case study
in the broader context of research being undertaken on the impact
of conflict on livelihoods in Darfur. Competition for resources
by competing livelihood groups and targeted asset-stripping of livelihoods
by counterinsurgents are two prominent features of the conflict.
The loss of livelihoods is a main output of the conflict: loss of
physical and financial assets. Labour, migration, and remittances
were looked at within a livelihoods framework. The ability of households
to migrate or send remittances is a function of assets and wider
processes, institutions and policies.
Unlike cultivation and herding, two primary livelihood strategies
in Darfur, in the past remittances were not affected by the weather.
People in Darfur could still depend on remittances during the 1980s
drought for instance. The conflict has enormously impacted on remittance
flows however, as remittances were commonly hand-carried before
the conflict. The 2004 conflict created substantial barriers to
remittance flows, the most notable being insecurity and banditry.
Routes to Libya were closed, borders and banks were closed, migration
patterns were disrupted, communication deteriorated, and inflation
brought down the real value of any remittances received.
Young echoed and added to the methods of supporting, protecting
and facilitating the sending of remittances presented earlier by
Kevin Savage: improved communications, support for family tracing
and travel expenses, reintegrating illegal immigrants into the formal
economy in Libya (where there are large number of immigrants from
Darfur), and extending formal banking services to displaced persons
and traders in Darfur were all identified as being beneficial for
remittance senders and recipients.
Whilst noting that barriers to sending remittances are significant
and that remittances are currently at an all-time low in the region,
Young concluded by emphasizing that they will eventually return
to previous levels and will undoubtedly play an important role in
rebuilding and recovery after the conflict has ended.
Discussion
Points and questions raised during the discussion included:
• The complications of tracking remittance flows because of
the number of variables and the fact that what recipients say they
will spend remittances on and what they are actually spent on is
likely to vary.. Helen Young noted that qualitative data collected
with sensitivity would be likely to be more effective and more accurate
than the use of a questionnaire in terms of understanding the uses
of remittances.
• The potential for negative effects of remittances, for example
dependence. Anna Lindley responded that one would not expect many
of the recipients of remittances to be supporting themselves financially
anyway (very old, very young or ill people), and they would be likely
to have been supported even if the sender was in the country. Kevin
Savage added that dependence is not necessarily a bad thing: choosing
specifically to migrate in order to earn income for the household
is a livelihood strategy. Also, many remitters are often supporting
those with little or no other viable income source.
• The link between remittances and the rise of private education
and potential resultant social differentiation. Anna Lindley noted
that in Hargeisa the return of expatriates and the sending of remittances
were fuelling a market for private education, but any potential
resultant social effects of this were not known.
• Informal versus formal remittances: how can the balance
between the two be known and what impact has the increase in banking
regulations had? This question led to comments on the difficulties
of defining “formal” and “informal” transactions.
While increased regulations risk increasing the already heavy burden
on some of the smaller private transfer companies to the extent
that a few have folded, it is evident that regulations will only
increase in the future, which could prove particularly challenging
for remittance flows in the future.
• The relevance of climate change to the issue of remittance
flows. Helen Young noted that remittances have been used for natural
resource management in the past. Kevin Savage added that case studies
do show that remittances are improving resilience to a limited extent,
such as investments in stronger housing.
• The sensitivity of remittance flows to downturns in economies.
There is some evidence that remittance flows are responsive to such
trends, for example they tend to increase after a livestock ban
or a disaster, but if senders are facing difficult financial circumstances
themselves, this limits how much flows may increase from normal
levels.
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