The term “remittance” has been long associated with the following words: migrants and the name of any major money-transfer company. The truth is, the world has been overlooking and underestimating the influence of something that goes beyond what has been thought to be irrelevant or insignificant money transfers. The fact is, remittances are much more important than we actually think they are.
According to the World Bank, by 2016 global remittances will reach a new record high $686 billion, of which $516 billion would go to less developed countries. If we put these numbers into perspective and compare them to other major financial inflows, we reach to the conclusion that remittances are actually three times higher than official development assistance aid, and in many countries (with the exception of China) remittances actually represent a larger share than Foreign Direct Investments (FDI).
Only until recently, our approach to remittances has shifted…
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