ib geo - resolving disparities - remitances

7/30/2019 IB Geo - resolving disparities - remitances

1/10

REMITTANCES

LEARNING OBJECTIVES1. TO DEFINE REMITTANCES

2. TO DESCRIBE THE GLOBAL PATTERN OF REMITTANCES

3. TO UNDERSTAND THE VALUE OF REMITTANCES


2/10

WHAT ARE REMITTANCES?

remittance is a transfer of money by aforeign worker to his or her homecountry

Estimates of remittances to developingcountries vary from IFAD's US$301billion (including informal flows) to theWorld Bank's US$250 billion for 2006(excluding informal flows).


3/10

WHAT IS THE PATTERN?
http://www.migrationinformation.org/datahub/maps/World_Remittances_Amount_border.pdf


4/10

WHAT IS THE PATTERN?
http://www.migrationinformation.org/datahub/maps/World_Remittances_PctGDP_border.pdf


5/10

WHO GETS THE MOST?


6/10

WHO GETS THE MOST?

The top recipients in terms of the share ofremittances in GDP included many smallereconomies such as Tajikistan (45%), Moldova(38%), and Honduras (25%).


7/10

BENEFITS OF REMITTANCES

As remittance receivers often have a higher propensityto own a bank account,

remittances promote access to financial services forthe sender and recipient,

promote economic development.

Migrants sent approximately 10% of their householdincomes; these remittances made up a corresponding50-80% of the household incomes for the recipients

The recipients commonly spend the funds onnecessities such as health, education, food, andclothing.


8/10

BENEFITS OF REMITTANCES

Invested in businesses and infrastructure E.G a$10 million hospital in Touba, Senegal, a newinternational airport in Kerala, India, and ametal bridge in Jomulquillo, Mexico.

Help recipient countries cope with economiccrises because migrants tend to send moremoney back to family and friends during hard

times. Remittances can also improve a receipt

countres creditworthiness.


9/10

PROBLEMS

large inflows into small economies can cause thedomestic exchange rate to appreciate (i.e., thedomestic currency becomes more expensive relativeto foreign currency), thereby making tradable items,

such as cash crops and manufactured goods, lessprofitable

Security Fears international money transfers areincreasingly under scrutiny due to fears of funding

terrorism. Susceptible to economic crisis - money transfers

suffered an unprecedented drop in May, falling 20% to $1.9 billion (USA to Mexico)


10/10

PROBLEMS

governments may develop a dependency on largeflows of remittances, thus creating a disincentive to

pursue aggressive economic policies to promotesustained development

Ghost towns phenomenon Central Mexico

Some analysts argue that remittances in some

countries contribute to a growing inequality or gap,particularly in poor rural areas, between the groups ofpeople within a community who receive remittancesand those who do not.

ib geo - resolving disparities - remitances

Documents