Remittances can transform rural areas
26 May 2013
Making every dollar count
Rome, 27 May 2013 – The Global Forum on Remittances jointly organized by the International Fund for Agricultural Development (IFAD) and the World Bank ended on 23 May 2013, with the private sector, civil society and policymakers determined to make every dollar count that migrants send home to their families in rural areas.
More than 350 participants from across the globe gathered in Bangkok for the three-day Forum, which ended with a key message from delegates and participants: Empowering the millions of remittances recipients in rural areas can provide a pathway out of exclusion, as well as improved livelihoods.
The common goal of the participants - central bankers, money transfer operators, postal networks, and microfinance organizations – was to identify strategic ways to invest the US$450 billion migrants send home annually to their families.
"We know that out of the nearly US$500 billion sent in global remittances every year, around US$220 billion go to people living in poor and remote villages," said Kevin Cleaver, Associate Vice-President of IFAD. "We now have a clear mandate - harness the power of this money to change their livelihoods."
Often central bank regulators are held accountable for slowing down remittance flows with excessive regulation. The deliberations and good practices highlighted at the Forum by Asian policymakers revealed that an enlightened regulator is a powerful ally.
Panellists from the private sector, such as Western Union and mobile phone companies from the Philippines, demonstrated their commitment to align transfer costs with the G20's ‘5 per cent in 5 years' or 5x5 initiative.
"Is it a dream to ask remittance service providers to adopt some sort of corporate collective objective around the 5x5? Maybe not, after what we've heard at the forum." said Massimo Cirassino, World Bank remittance expert.
Presentations by micro-financiers, development specialists and diaspora leaders emphasized what really matters - the people behind the numbers.
Extraordinary success stories shared with the Forum participants demonstrated how remittances could be a bridge to the rural poor, for example by providing the funds for a first-ever insurance policy, or a loan to get a small business project off the ground, which could bring financial security to a migrant worker's family.
The London-based Developing Markets Associates (DMA) explained how their financial advisors in four banks of Central Asian countries have given advice to remittance recipients, which has led to the opening of 11,000 new bank accounts, many by first-time depositors.
Press release No.: IFAD/23/2013
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).
The World Bank Group is one of the world's largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world. For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org