Representatives of governments, the private sector and civil society discussed efforts to significantly decrease transfer costs of remittances, maximize their impact for development, and ultimately contribute to achieving the SDGs, during the 2017 Global Forum on Remittances, Investment and Development.
Participants shared lessons learned and best practices on innovative business models, to stimulate long-lasting partnerships and to raise awareness towards the creation of a more enabling market, particularly in light of the 2030 Agenda for Sustainable Development.
16 June 2017: Representatives of governments, the private sector and civil society discussed efforts to significantly decrease transfer costs of remittances, maximize their impact for development, and ultimately contribute to achieving the SDGs, during the 2017 Global Forum on Remittances, Investment and Development (GFRID). GFRID’s conclusions will feed into the tenth Global Forum on Migration and Development, as well as preparations for the Global Compact for Safe, Orderly and Regular Migration.
The 2017 Forum took place from 15-16 June 2017, in New York, US, and was organized by the International Fund for Agricultural Development (IFAD) in collaboration with the World Bank and the UN Department of Economic and Social Affairs (DESA). Participants shared lessons learned and best practices on innovative business models, to stimulate long-lasting partnerships and to raise awareness towards the creation of a more enabling market, particularly in light of the 2030 Agenda for Sustainable Development.
On 15 June, Private Sector Day, speakers participated in sessions on: Sending money home: the landscape going forward; Enabling innovation: inclusive business models for remittances and migrant investment; and Achieving scale in an evolving remittance market. On 16 June, which was also the International Day of Family Remittances, sessions addressed family remittances, the SDGs and the global compact on migration.
Among the messages shared during the two days, Bela Hovy, DESA, invited participants to think about potential indicators that could track progress in achieving SDG target 10.c (By 2030, reduce to less than 3% the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5%), while stressing remittances’ importance for SDGs 1 (no poverty), 2 (zero hunger), 3 (good health and well-being), 4 (quality education), 5 (gender equality); 8 (decent work and economic growth), 10 (reduced inequalities), 16 (peace, justice and strong institutions) and 17 (partnerships for the goals). Hovy also encouraged the creation of a quantifiable definition of “diaspora investment.”
Oscar Chacón, Executive Director, Alianza Américas, stressed the need to bring a “social interaction” dimension to data, enabling migrants to present themselves as important economic agents and create meaningful interactions in countries of residence. Amadou Cissé, Executive Director, African Institute for Remittances, said migrants’ remittances should be used to bridge gaps in social and physical infrastructures, and to help create decent jobs at home.
Estrella Mai Dizon-Añonuevo, Executive Director, Atikha Overseas Workers and Communities Initiative Inc., presented the Pinoy Wise Movement, through which migrant volunteers act as financial literacy advocates, trainers and counselors. The initiative currently operates in six countries and involves 120 migrant volunteers, who help other migrants learn to save money and utimately return to their home countries.
Lee Sorensen, independent development expert, said diaspora investors can operate the best in the institutional entrepreneurial space of their home countries. He highlighted that many of the migrants’ interests are aligned with countries’ development interests, but migrants need to be provided with a way to bring their expertise and resources back to their home countries.
Mohit Davar, Chairman of Advisory Board, International Association of Money Transfer Networks (IAMTN), said several private corridors already entail costs of less than 3%. He highlighted the remittances “ecosystem” comprised of regulators, governments, FX providers, policymakers, agents, enforcement bodies, banks, liquidity providers, financial institutions, development financial institutions, and shareholders, saying its biggest threat is de-risking, which generates financial exclusion. Davar underscored the need for a single global standard for the Money Transfer Operator (MTO) industry.
Also on reducing the costs of remittances, Ian Radcliffe, Director, World Savings and Retail Banking Institute (WSBI), called to tap into the digital revolution in the banking sector, by adapting policies to digital developments and making legislation “technology-neutral.” Stefano Signore, European Commission, spoke about the EU directive of universal access to a bank account, applicable as of December 2016, which promotes financial inclusion and facilitates the transfer of remittances by forcing banks to allow the opening of bank accounts “without attaching too many strings.” He noted also that digital is becoming a priority in development cooperation policy, including on remittances.
Nathan Naidoo, Mobile Money, GSMA, said in just a decade mobile money has made global history by: becoming available in two-thirds of low- and middle-income countries; surpassing a half billion registered accounts in 2016; and accounting for transactions of US$43 million daily. He highlighted mobile money’s role in expanding financial inclusion, and said mobile money remittance volumes increased by 68% in 2016.
In an interactive discussion, participants raised issues related to the need to strike a balance between protection and openness, customers’ readiness to move into a “cashless” world, and the next opportunities for innovation.
On 14 June, IFAD published a report showing that migrants send home 51% more than they did ten years ago (totalling more than US$445 billion in 2016), lifting millions out of poverty and contributing to the achievement of the SDGs. The increase in remittances is far greater than the 28% increase in migration from the receiving countries, and 40% of remittances are sent to rural areas where the majority of poor people live. In presenting the report, Pedro de Vasconcelos, IFAD, noted that this money is spent on food, health care, better educational opportunities and improved housing and sanitation. The report, titled ‘Sending Money Home: Contributing to the SDGs, One Family at a Time,’ is the first-ever study of a ten-year trend in migration and remittance flows. It notes that the sharp rise over the past decade has taken place largely in Asia, where remittances have increased by 87%. Currently, about 200 million migrant workers support approximately 800 million family members globally. In 2017, it is expected that one in seven people globally will be involved in either sending or receiving remittances, according to the report.
The next GFRID will take place from 8-10 May 2018, in Kuala Lumpur, Malaysia, and will be the first of a series of regional Fora. The event will be hosted by the Central Bank of Malaysia, in collaboration with IFAD and the World Bank. [Forum Agenda] [GFRID Webpage] [UN Press Release] [UNRIC Press Release] [Sending Money Home: Contributing to the SDGs, One Family at a Time] [IISD Sources]