REMITTANCES AS A DEVELOPMENT TOOL
13
Recognizing Reality The emergence of remittances as an important issue for development policy has generated some backlash among politicians and academics. It has also created some confusion about the nature of remittances. Although the issue of remittances is now out in the open, many of the people who send them remain in the shadows. The substantial majority of LAC migrants live and work legally in developed countries—but there are millions of others who remain undocumented. In this regard, President Bush of the United States recently noted that “family values do not stop at the border.” But legal documentation does; thus remittances are becoming part of the politically charged debate surrounding immigration. The reality is that globalization is undoubtedly accelerating and expanding the process of remittances. Over the past quarter century, international migration has increased at more than four times the rate of world population growth. Each year, millions of people continue to leave their villages and hometowns in developing countries to seek jobs and better lives for themselves and their families. Today, the number of economic migrants (approximately 175 million) would alone constitute the sixth most populous country in the world. The basic economic equation continues to be quite simple: the economies of most developed countries need migrant labor, and their families back home need the remittances that come from their earnings. So people move “North” by the millions, and money moves “South” by the billions. Over the past decade, the world’s political system has adopted many new rules and mechanisms to facilitate the realities of international trade, investment, and communication. The same needs to be done for the people who move abroad as part of this globalization process. Even though this goal has become more complicated over the past few years because of border security issues raised by increased terrorist threats, no one seriously suggests that undocumented workers be repatriated to their home countries: too many economic sectors of too many developed countries would be adversely affected. So immigration laws need to reflect the reality of the new “labor markets” of our globalized economies. Recognition of the scale and scope of remittances has also led to various concerns by academic experts about the role and viability of remittances as a strategy of economic development. Some of these concerns are addressed elsewhere in this book (see chapter 15). But
Copyright © by the Inter-American Development Bank. All rights reserved. For more information visit our website: www.iadb.org/pub
CHAPTER 1