For decades the migration debate has focused on the impact of immigration on destination countries.
Introduction
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Kunden stehen im Januar 2010 Schlange in einem Geldtransferbüro im Stadtviertel "Little Haiti" in Miami. (© AP)
Very recently, however, attention has increasingly turned to the situation in the countries of origin, developing countries in particular, with a focus on the interplay between migration and development. Three compensatory mechanisms offer migrants' countries of origin a possibility for avoiding the permanent loss of knowledge and qualified labour due to migration (i.e. brain drain) as well as a means for escaping the poverty trap.
Firstly, circular migration – the practice of migrating back and forth between the countries of origin and destination – can create, at a minimum, the potential for increased knowledge exchange, if not gain (brain gain). Secondly, diaspora communities can serve as a conduit for developing trade connections, increasing transfer of capital and exchanging technology. Finally, the steady growth of remittances from migrants to families back home can help to significantly reduce poverty in recipient communities.
The goal of this policy brief is the critical examination of remittances as a link between the migration and development debates. It begins with an account of the procedures and motives for such transfers as well as an overview of current trends and figures. It then addresses the importance of remittances with respect to poverty reduction, income distribution, spending habits, education, health, investment and growth as well as the national balance of payments in developing countries. Finally, the conclusion addresses the question of whether migration and the resulting flow of funds could evolve into a springboard for development in these countries.
Stefanie Hertlein studies Geography, Economic Policy and Ethnology at the University of Freiburg.
Florin Vadean is a member of the Migration Research Group at the Hamburg Institute of International Economics (HWWI), a Ph.D. candidate in economics at the University of Hamburg and a Research Fellow at the Research on Immigration and Integration in the Metropolis (RIIM), Vancouver, Canada.
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