Rome 27 June 2013 – Remittances, the money sent home by migrant workers, “can empower rural people to blaze a trail out of poverty and exclusion,” said Kanayo F. Nwanze, President of the International Fund for Agricultural Development (IFAD) today at an event at its headquarters in Rome.
This fora is the first in a series of discussions following the 4th Global Forum on Remittances 2013 in Bangkok, Thailand last month to discuss consensus reached and to explore ideas to scale-up remittances impact for development. The Forum, which IFAD organized with the World Bank, brought together 350 participants from around the world, including G8 representatives, central bankers and microfinance institutions, money transfer operators and postal networks.
In his opening remarks, Bruno Archi, Deputy Minister for Foreign Affairs of the Italian Republic, said that “Italy supports reducing transaction costs of remittances for migrants in the European Union.” He highlighted that given the importance of remittances and the need for migrants to understand the issues related to transactions, the government of Italy had introduced the first Italian website on remittances.
“The value of remittances is staggering, but the rural poor need greater impact,” Nwanze said in his remarks. “We need more strategic ways to invest the US$200 billion sent home to the rural areas every year.” Reducing transaction costs is a key priority as well as affirming the significant role that diaspora play in rural development, particularly agriculture, he added.
More than 215 million people across the globe live outside of the countries they call home. Most remittance families operate outside of the world’s financial system, dependent on costly cash transfers that often require significant travel for rural recipients. Despite the global prevalence of electronic money transfers, most migrant workers are excluded from convenient, modern banking and are forced to initiate more than one billion separate remittance transactions worldwide each year.
Virgilio A. Reyes Jr, Ambassador of the Philippines to the Italian Republic, said that his country is a model of synergy between the government, IFAD and civil society in showcasing the discussion on remittances. Echoing Nwanze’s comments on providing opportunities for youth in rural areas, he said the remittances discussion should also explore how to stop the mass exodus of young people from farming communities. The average age of small farmers in the Philippines is 57 years old, he added.
According to IFAD, remittances could generate $30 billion annually for investment in rural areas, but only if initiatives are scaled up. IFAD is already working with migrants and their families back home in more than 40 countries to promote investment opportunities in agriculture. Taking from the outcome of the Forum, IFAD will begin to focus on building on these activities to help rural people to access remittances more easily; to develop more options for them to use their money; and to build capacity for the diaspora to invest more money in their home communities.
Press release No.: IFAD/29/2013
The International Fund for Agricultural Development (IFAD) works with poor rural people to enable them to grow and sell more food, increase their incomes and determine the direction of their own lives. Since 1978, IFAD has invested about US$14.9 billion in grants and low-interest loans to developing countries through projects empowering over 410 million people to break out of poverty, thereby helping to create vibrant rural communities. IFAD is an international financial institution and a specialized UN agency based in Rome – the United Nations’ food and agriculture hub. It is a unique partnership of 172 members from the Organization of the Petroleum Exporting Countries (OPEC), other developing countries and the Organisation for Economic Co-operation and Development (OECD).