Remittances: It’s not always about the money

The first thing that commonly comes to mind when one hears the word ‘remittance’ is money. Remittances are a significant part of a migrant’s migration cycle or ‘journey’. In fact, many families and individuals rely on remittances to overcome their financial insecurities back in their country of origin. Among the structural issues that cause these insecurities are the lack of employment opportunities as well as low-paid jobs. People then pursue labour migration and make big sacrifices just to secure financial stability for themselves and their families. At the same time, remittances can also be viewed as a key step towards economic growth and development for many developing countries. For example, within the Philippines, migrant workers abroad, or ‘Overseas Filipino Workers’, are labelled ‘modern-day heroes’ due to their large contribution to the Philippine economy. 

 

Given the points above, it can be said that remittances always involve transfers – specifically, the transfer of money from the country of destination to the country of origin. While these factors are beneficial for the migrant workers, their families, and their country of origin, it is significant to point out that remittances are not always about money. Remittances should not only be viewed from an economic perspective, but rather we must dig deep and see how they encompass underlying issues and migrants’ stories. 

 

Acquiring money to send back home is not that simple. Remittances are intertwined with stories of the sacrifice and struggle of migrants working and living abroad. Migrants first and foremost have to bear the burden of being separated from their families simply to provide the financial stability that they would not be able to acquire back home. Besides their precariousness and vulnerability due to their status, many migrant workers lack access to their wages, which has been particularly the case during this pandemic. Lacking access to their wages not only puts pressure on the migrant but also puts stress on their families back home. Thus, for many households, remittances have been viewed as a key factor in daily survival. 

 

There are, however, underlying issues that need to be addressed when it comes to remittances, one of which is the financial illiteracy of the migrant workers and their families. Financial illiteracy is manifested when individuals use their remittances to meet short-term needs rather than using the money to build financial resilience. In Sri Lanka and Nepal, it is reported that only less than 5% of the returnee migrant workers have invested in productive assets and small businesses. The remittances of migrants are mainly used to pay bills and other expenses back home. It is therefore vital for these workers to have their own financial goals, be equipped with financial skills, and make investments and good financial decisions. Yet, the knowledge about how to efficiently put remittances to use seems to be lacking in the migration experience. Thus, this gives rise to the importance of investing in financial literacy training for migrant workers.

 

Beyond the volume of flows and cash transfers that the term commonly entails, remittances also have a social dimension that tends to be overlooked by many. In a term first coined by sociologist Peggy Levitt, the migration journey involves transfers of ‘social remittances’ such as knowledge, skills, behaviours, or ideas. When migrants move to another country, learning and adapting to the culture and customs is a significant part of their migration journey. The power of social remittances resides in their potential to influence not only the migrants themselves but also non-migrants in their country of origin once they return back home. It provides migrants with an opportunity to develop their own and others’ skills, ideas, values or knowledge, for instance in relation to the country’s politics or culture. For example, migrants from Mali who were able to learn about democratic political norms abroad demanded and facilitated greater political accountability back home. 

 

On the other hand, learning or upgrading skills can also be of great use for migrants. Migrants can acquire useful skills abroad, such as developing their English language competence and their professional abilities. However, many migrants do not even have the opportunity to hone their skills which they could have used to develop a business or produce more income. If governments invested in migrants’ skills, it would have a huge impact on workers and employers in both the countries of origin and destination.

 

When we hear the term remittances, I hope that we do not only think about money transfers. It is not always about the money used to pay bills or improve the economy. Remittances entail migration journeys, sacrifices, struggles, and underlying structural issues. Remittances can do so much more for migrant workers, their families, and the economies. They have the potential to shape minds, experiences, journeys, and lives.

 

Further reading and resources:

 

• Escribà-Folch, Abel, Meseguer, Covadonga, and Wright, Joseph. 2021. ‘Global Migration Drives Global Democracy: How Workers Abroad Weaken Dictators Back Home’. Foreign Affairs, 2 June. https://www.foreignaffairs.com/articles/world/2021-06-02/global-migration-drives-global-democracy 

 

• Opel Toots. 2017. ‘Financial inclusion for OFWs and their families’. The Manila Times, 9 October. https://www.manilatimes.net/2017/10/09/opinion/analysis/financial-inclusion-ofws-families/355369 

 

• ‘UN Migration Agency: “Remittance Flows Can Be an Economic and Social Lifeline for Migrant Families”’. IOM News, 12 June 2018. https://www.iom.int/news/un-migration-agency-remittance-flows-can-be-economic-and-social-lifeline-migrant-families 

 

• CNA. 2020. ‘Overseas Filipino workers help to improve their families' lives, but often with great sacrifice’. https://youtu.be/-PlCWzOmpzs 

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