23_G15_InSight_Money

Global Issue 15

Harnessing the diaspora dollar India typically receives three times as much in remittances – cash sent home to family members by migrants – as it does in foreign direct investment. In some developing countries the disparity is even bigger. Yet most fi nancial institutions are failing to capitalise on this market, charging high transfer fees but missing the opportunity to offer additional fi nancial services either to senders or receivers Dilip Ratha global thi rd quar ter 2013 Global Insight Making Money Move www.global-briefing.org l 23 Perhaps the fastest way to eliminate poverty and share prosperity is to allow the poor to migrate to a richer destination. A person’s income multiplies instantaneously, often by a factor of 10 or 20; and the income gains are shared with family members and friends back home, through remittances. These remittances are used to purchase food, housing and health care for the family, education for children and business investments. Over time, migrants facilitate exports and imports between countries. Those more skilled also share their knowledge and expertise with people back home. Some return home after years of working abroad, bringing with them skills and savings. There are more than 200 million international migrants. The size of the diaspora, including the second and third generation descendants of these migrants, is signifi cantly larger. International 


Global Issue 15
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