Robert Meins' Remittances Blog

IFAD, U.S. Department of State to mobilize migrant investments for rural poverty reduction and food security

2011-05-16T18:03:00.000-07:00

Nwanze to present ‘Diaspora Investment in Agriculture’ at Secretary Hillary Clinton’s Global Diaspora Forum

Rome and Washington, May 16: The United States Department of State and the International Fund for Agricultural Development (IFAD) will unveil this week in Washington, DC a new joint initiative to assist the flow of investment from international migrants to reduce rural poverty and boost food security in their home countries.

The Diaspora Investment in Agriculture (DIA) initiative will be presented by IFAD President Kanayo F. Nwanze on Tuesday, May 17 at the Secretary’s Global Diaspora Forum, hosted at the State Department by Secretary of State Hillary Clinton. The DIA will seek to migrant entrepreneurs and diaspora organizations to stimulate the agricultural sector in developing countries, particularly post-conflict nations and fragile states. According to IFAD, investments in agriculture and efforts to better link farmers with emerging markets can have an enormous positive impact on economic growth and food security.

Through the DIA initiative, IFAD and the State Department, in collaboration with partner donors and international institutions, will work with diaspora investors worldwide and local organizations and communities in their home countries. The program seeks to assist and encourage investments by migrants in business opportunities that enhance food security, generate economic opportunity and foster job growth in rural areas.

With the support of the State Department and other international partners, IFAD will work to involve migrant entrepreneurs, diaspora organizations and key strategic entities to implement projects that stimulate the development of the agricultural sector. In particular, the initiative will seek to identify and co-finance viable ideas and models linking food security, diaspora investment and agricultural value chains.

With more than 215 million people – or three per cent of the world’s population – now living outside their home countries, diaspora communities already play a vital economic role in many nations. Currently they remit more than US$325 billion a year to developing countries and, in many cases, have become among the largest sources of cash and investment for home countries, surpassing the sum total of official development assistance and foreign direct investment. In Haiti, for example, remittances contribute upwards of a third of gross domestic product. In the United States, which hosts the largest number of international migrants of any country, official remittances by diaspora communities amount to nearly $50 billion annually.

In the short-term, these remittances pay for essentials, such as food, clothing, and shelter, and often constitute more than 50 per cent of household income. In times of crisis, migrants are often first-responders who provide for the increased financial needs of the their families, as evidenced by the doubling of remittances immediately after the 2010 earthquake in Haiti, the 2010 flooding in Pakistan and the 2009 typhoon in the Philippines.

Through migrant investment, the diaspora can also play a vital long-term role, as both project experience and research show that diaspora communities are not only well informed about opportunities in their countries of origin, but they are also much more willing than others to invest in fragile markets.

The initiative will target a number of countries, including Afghanistan, Angola, Burundi, Congo, Côte d’Ivoire, the Democratic Republic of the Congo, Egypt, Haiti, Iraq, Liberia, Sierra Leone, Somalia, Sri Lanka, Sudan, and Tunisia.

The goal of the Forum, which will run through May 19, is to recognize and celebrate the contribution of diaspora communities to the U.S. relationship with their countries of origin and encourage intra-diaspora collaboration and learning.

Remittance to Jamaica rise 7.4% in February

2010-04-09T05:09:00.000-07:00

Despite the ongoing economic challenges resulting from the financial crisis, Jamaicans living abroad sent home 7.4% more money home to their families this February than at the same time last year. This marks the fourth consecutive month of growth, making it likely that Jamaica will be the first country in Latin America and the Caribbean to have passed the bottom of the decline in remittances due to the financial crisis.

Remittances are vital to the Jamaican economy, representing approximately 15% of GDP last year (the equivalent of $660 per person living in Jamaica). Remittances coming from the United States rose more strongly than those from other regions, making up 62% of remittance to the island, up from 56% last year.

Placed in a regional context, remittances to Central America during the first two months of the year declined 6.5% from 2009 levels, while Mexico continues to be hardest-hit by the crisis, experiencing an almost 15% decline with respect to the same period.

RemittancesGateway.org: Jamaica country profile
RemittancesGatewat.org: Central Bank reports

Despite earthquake, Haitian microfinance continues to serve rural poor

2010-01-20T10:37:00.000-08:00

Over the past week it has been impossible to ignore the scenes of utter desperation coming out of Haiti. After being ravaged by four storms in 2008, last week’s earthquake once again devastated one of the world’s poorest nations, effectively resetting the clock on its development. Despite this, however, the stepping-stones of the rebuilding process are being laid.

One organization that is rising from the rubble is Fonkoze, a microfinance organization operating predominantly in rural Haiti. With assistance from IFAD’s multi-donor Financing Facility for Remittances, Fonkoze purchased satellite phones and diesel generators in 2007. This equipment was intended to allow Fonkoze to deliver remittance services in rural areas where basic infrastructure is often undependable or lacking. But in the wake of the earthquake, the true value of this investment is coming to light. In spite of a host of difficulties, Fonkoze remains operational only days after the earthquake.

The reason why these services are so vital is due to the massive contribution that remittances make to migrants' families, to their communities and to the country as a whole. More than $1.9 billion dollars was sent to Haiti in 2008 alone, more than official development assistance and foreign direct investment combined. With more than half of these funds going directly into the hands of families in rural areas, remittances are key to meeting short-term needs and to encouraging long-term development.

After ensuring that Fonkoze personnel and their families were safe, Fonkoze director Anne Hastings and her staff set about the process of bringing services back on-line. During a conference call yesterday she laid out the challenges including a destroyed headquarters, security concerns and limited supplies of cash and diesel. Despite this, however, 28 Fonkoze branches are open for business today.

Hastings is sure her institution can play a vital role in making it possible for Haitians abroad help their families rebuild. Partner institutions such as MoneyGram and City National Bank of New Jersey have either eliminated or drastically reduced fees to make sure that the maximum amount of money reaches those who need it most.

For more information visit http://www.fonkoze.org/
Recent article on MSNBC: Earthquake disrupts key payments lifeline (MSNBC)

Mexican remittances drop 36%, IFAD analysis

2009-12-04T06:14:00.000-08:00

For press on the topic click here

Brussels Development Briefings

2008-12-11T03:09:00.000-08:00

Brussels, 11 December 2008. Antonique Koning from the EU/ACP Microfinance Programme shares with us the lessons that she takes home from the Brussels Briefing on "How does international migration affect ACP rural development?". She underlines the increasing attention on remittances, and how these are not decline in spite of the current global financial crisis. There is however a need for more and better data on trends in remittances, and according to these data take decisions that can foster this transfer of capitals. Further, there's a clear link between remittances and microfinance, but these linkages need to be fostered and strong financial institutions need to be put in place so that this transfer of money can be translated into savings and investments.