Opening statement by Charlotte Salford Associate Vice President, ERG at the Global Forum on Remittances and Development
Location: Kuala Lumpur, Malaysia
07 May 2018
Ladies and Gentlemen,
I am very pleased to have this opportunity to address you at this important event. This Forum brings together diverse stakeholders from government, the development community and the private sector who share a belief in the power of remittances to not only change individual lives, but to shape our common future as a whole.
Around the world, there are about 200 million people working outside their home countries. In 2017, they sent US$480 billion in remittances to their families back home. These flows directly involve the lives of 1 billion people.
Let me tell you the story of one of them. Her name is Lili.
Lili is a Filippina woman with four children. Her husband has been working in Saudi Arabia since 1998. He is one of the 10 million Filipinos who left their families to earn an income abroad.
He sends home about US$ 400 per month. Lili’s budget is very tight and she doesn’t have enough money to raise the family. She is also worried because her family depends entirely on remittances. And how will they survive when her husband returns?
These are the kinds of issues remittance families face. For more than a decade now, the International Fund for Agricultural Development has been working on remittances to help poor rural people overcome poverty and realize remunerative, sustainable and resilient livelihoods.
Remittances are a lifeline in remote and under-resourced regions. They are sent to every developing country in the world, and add up to three times official development assistance worldwide.
Here in the Asia Pacific region, remittances equal more than 10 times ODA from all sources. In more than half of the region’s countries, remittances exceed 3 per cent of GDP. And let me underscore that the countries with the highest reliance on remittances are predominantly rural.
This is extremely significant, when you consider that three quarters of the world’s poorest and hungry people live in rural areas. If we want to achieve a world in which extreme poverty and hunger are eliminated—which are the aims of Sustainable Development Goals 1 and 2—then we need to invest in rural areas.
Remittances can supply some of that investment. Indeed, remittances are already instrumental in helping millions of families reach their own personal goals of sustainability.
The 2030 Agenda and the SDGs are not the only global initiative to appreciate the immense potential to leverage remittances to address development challenges. The Global Compact on Safe, Orderly and Regular Migration is expected to be adopted later this year. Objectives 19 and 20 of the Global Compact specifically address the positive contributions of migrants and diasporas to both their destination countries and their families and communities back home.
In that regard, today we will be hearing directly from Louise Arbour, the UN Special Representative for International Migration, about the priorities of the Global Compact on migration.
In another significant move, the United Nations General Assembly is also devoting attention to the issue of remittances and development. The GA is currently scheduled to consider establishing 16 June as the International Day of Family Remittances, to promote recognition of the fundamental contribution by migrant workers not only to their families’ needs, but to the sustainable development of their countries of origin.
A further sign of the sense of collective ownership of this issue is this Forum itself. We are very pleased to see the diversity of stakeholders at this meeting. And for the first time, the Forum is being convened by a Member State, through the Central Bank of Malaysia, Bank Negara.
Equally important is the increasing involvement of the private sector as an active participant. Effective and efficient remittance markets can develop only if remittance regulators, the private sector and civil society work in concert to achieve shared goals.
Over the past decade, the focus on remittances has been mostly on the sending side, through gathering data on volumes and costs. At IFAD, we believe that it is now time to give more attention to the receiving end. In particular, we need to look at how to increase the impact of these precious resources.
With a broad global consensus on the power of remittances to drive development, it is high time that we move beyond recommendations and implement scaled-up initiatives. And these need to become an integral part of our strategy to reach the SDGs by 2030.
At IFAD we are already mainstreaming and bringing to scale our most successful operations and business models. Some recent examples in the Asia Pacific region include three remittance grant projects in the Philippines and Nepal. With an IFAD contribution of US$1.7 million, they have mobilized an additional US$20 million in savings and investments from remittance families themselves towards agricultural development and rural entrepreneurship.
The success of these programmes in turn led to a US$68 million partnership between IFAD and the Government of Nepal to scale-up support for remittance families, focusing on financial inclusion, value chain investment in agriculture, employment for women and youth.
Ladies and gentlemen,
Remittances are often relatively small transfers, typically $200 or $300, but their cumulative impact is huge. Roughly 40 per cent of remittances are destined for the rural areas of developing countries, where most of the world’s poorest people live.
As we are going to hear during this Forum, digital technology in particular offers an enormous opportunity to improve the way that remittance markets work, especially for those in isolated communities. Innovative technology can also provide families with more options to leverage the impact of their hard-earned money. And we know that they are eager to do so.
At IFAD, we have seen how rural people are ready to seize upon opportunity to improve their own lives and the health of their communities. In Tonga, for example, members of one community raised US$100,000 from their own funds and from relatives living abroad to build a road from their village to the harbor, making it easier to transport goods to market and creating greater economic potential.
To further capitalize on the development potential of remittances will require investment, an enabling environment, sound policies and strong partnerships. It demands coordinated support from governments, development institutions, the private sector and others.
With that in mind, I am sure that over the course of the next few days this Forum will provide opportunities to share new ideas and build new partnerships.
Lastly, let me finish the story of Lili. Lili had the opportunity to take part in a financial literacy project supported by IFAD. She learned how to budget, and how to save. With her first savings she invested 120 dollars and bought two fish cages to do fish farming. Now she makes more than what her husband sends her.
And her husband came back eventually. They now work on the fish farm and run it as a family business.
I look forward to a rich exchange of experiences and views so that we can further our collaboration.