Remittances, Migration and Development: Policy Options and Policy Illusions

In the past few years there has been a remarkable renaissance in the interest in remittances by policy makers, multilateral organizations, such as the World Bank, the International Monetary Fund (IMF) and the International Organization for Migration (IOM), and scholars (Ratha 2003; Kapur 2005). After years of relative neglect, remittances have been rediscovered as a potential source of development finance. This interest has been triggered in part by a striking increase in remittance flows. Registered remittances sent back to developing countries rose from $31 billion1 in 1990 to $83 billion in 2000, to no less than $338 billion in 2008. While remittances to developing countries surged, official aid flows showed a declining trend. Although this surge reflects to some degree the surfacing of erstwhile informal remittances, improved recording of remittances and depreciation of the United States (US) dollar, there is little doubt that at least part of this increase has been real.