All that glisters is not gold
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CTA. 2001. All that glisters is not gold. Spore 91. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/46040
Internet URL: http://spore.cta.int/images/stories/pdf/old/spore91.pdf
The flow of remittances from migrant communities into ACP countries was once seen as a key to the balance of payments. But how much do they, could they, mean to agriculture? Posters and billboards advertising money transfers are now part of most...
The flow of remittances from migrant communities into ACP countries was once seen as a key to the balance of payments. But how much do they, could they, mean to agriculture? Posters and billboards advertising money transfers are now part of most urban landscapes in ACP countries, and quite a few rural ones too. The roadsides to and from the airport, not always the best indicator of a nation s financial welfare, are full of reminders that you can be sent money from anywhere in the world in fifteen minutes. In call centres, telecentres, local shops and cafes in migrant communities in Europe, North America and Japan, companies such as Western Union and national banks invite, almost incite, customers to send money back home. They are perhaps unnecessary reminders of the international division of labour. These transfers of a thousand or so francs, a couple of hundred dollars, carefully put aside during the month, to be shared with family at home, after perhaps iniquitous bank costs, just how important are they to a nation s development? Known to economists and fiscal specialists as migrant remittances , they have come to occupy a special place in international flows of money in recent years. Should the investor's money pull productivity up or be taken for a ride in a taxi? Photo Gérard Lacz/Sunset (l.) - Photo Hélène Paquet (r.) Migrant money matter These remittances are now included in international statistics maintained by the Organisation for Economic Cooperation and Development (OECD) which monitors capital flows from North to South though not in the opposite direction. Throughout the 1970s and 1980s the major share of these flows was in the form official development assistance, to which the OECD added the significant amounts being transferred by non-governmental organisations. In the early 1990s, partly because of cuts in aid budgets and partly because of rising private investment by both productive projects and by investment banks, the majority share of these flows was accounted for by private funds. Of these, about 15% was in the form of migrant remittances. The total volume of migrant remittances flowing to ACP countries each year is estimated to exceed US$ 25 billion. These sums come mainly from Western Europe (to Africa) and North America (to Caribbean and ACP States in the Americas), although there are also significant intra-regional flows from, for example, Gabon to various West African states, and to several states, notably Mozambique, from South Africa. Recent measures against migrant labour in some of these countries has seriously reduced these regional transfers. Similar volumes flow into North Africa, South Asia and East Asia (but a large proportion comes from the Gulf oil states) and into Central and South America from North America. Invest in food security In some ACP countries, migrant money keeps the national economy afloat. The case of the African island archipelago of Cape Verde in the Atlantic Ocean is perhaps the most renowned. There it constitutes between 25% and 30% of the annual gross national product, according to reports on the Nos ku Nos phenomenon of the commonwealth of Cape Verdean peoples, which has its main external centres in the state of Massachusetts, USA, in the province of Zuid Holland in the Netherlands, in Portugal and in Brazil. In a special study by the Smithsonian Institute of Washington DC, USA, it is reported that there is a 'proverbial contrast between a carta de amor, or love letter, in which a migrant family member includes a few dollars in addition to welcome news and photos, and a carta sec, or dry letter, which contains no money.' Similar scenarios where remittances are a quarter or more of a nation s financial product exist in the island states of the Pacific and Caribbean. One migrant observer of his native Haiti, Max Blanchet, wrote that 'were it not for the remittances Haitians in the Diaspora send home, for all I know the Republic would have long vanished under the Caribbean Sea.' With more of their population living abroad than at home, states such as Barbuda and Anguilla depend heavily on remittances, but at a price. Large-scale emigration may simultaneously raise living standards whilst undermining the local economies. 'The labour decreases, and fields give way to cattle and coconuts; pasture succeeds tillage and wilderness encroaches on pastures' is one picture painted of Anguilla. The investment potential of such funds is huge, and steps are being taken to encourage it. According to the International Finance Corporation, popularly known as the bank of the World Bank , 'In Eritrea, the services sector, which accounts for 60 per cent of gross domestic product, will play a critical role. Sub-sectors expected to expand rapidly include wholesale and retail trade, transport, communication, construction and financial services. These are driven by remittances from expatriates.' In nearby Somalia, the investment picture is less rosy: 'remittances far outstrip, by ten to one, international development assistance. Estimated at US$ 150 million a year, they have tended not to be saved and there remains a shortage of investment capital'. Whether invested or not, few of these funds flow directly into domestic agriculture. In Western Europe much has been made of funds transmitted from migrant groups in, for example, the Paris area to village irrigation projects in Mali, Senegal and Burkina Faso, or from groups in London to food processing groups in Ghana. In reality, much is made in the media about such small-scale initiatives, but little is made in terms of profit. Often such funds are used to cover operating losses or project shortfalls, rather than as productive investment. Perhaps it is time for development projects to make themselves better known in short, to sell themselves to the diaspora communities. Should they not seek external involvement not only in terms of the morally correct solidarity funds of the North, but as an investment opportunity with a profitable, and morally correct, return in food security? And what better place to begin than with the folks from back home?