A set of specific priorities and actionable outcomes resulted from the GFRID 2018. These are directly linked to the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs), and the Global Compact for Safe, Orderly and Regular Migration. They are structured around the following five pillars:
Recognize the significant contributions of migrant remittances and diaspora investments to achieving the SDGs
Expand and strengthen the collection, analysis and application of remittance- and diaspora-related data to foster effective public policies and private-sector investment, and informed decision-making at the customer end
Continuously review legal and regulatory frameworks on remittance and diaspora investments to promote harmonization across jurisdictions; and ensure that they spur competition, innovation, technology and integrity, leading to greater market efficiency and lower cost
Support financial inclusion and facilitate asset-building in order to leverage the impact of remittances and diaspora investment
1.Recognize the significant contributions of migrant remittances and diaspora investments to achieving the SDGs
Every day, remittance families aspire to reach their own individual SDGs.
Two hundred million remittance families around the world are already engaged in reducing poverty, improving health and nutrition, attaining better education, and investing in housing and entrepreneurship. By doing so, the actions and aspirations of these individual families match up directly with several SDGs. In this regard, it should be noted that remittances to Asia-Pacific exceed 10 times all official development assistance (ODA) to the region.
But migrants “remit” far more than just money. They also bring innovative thinking that can leverage new ideas and create opportunities for their families and communities back home.
In this context, the SDGs provide a blueprint for ideas and actions to help create convergence between the goals of remittance families, the strategies of the private sector to tap underserved markets, public policies and the role of the civil society to promote positive change.
Proposed actions include:
- Frame the contribution of remittance families in terms of both financial flows and investments as potential “agents of change” in their countries of origin by promoting economic opportunities and sustainable development, emphasizing that these are private flows.
- Recognize that leveraging the development impact of remittances and diaspora investment to reach long-term goals can only be achieved when strategies to undertake concrete actions are formulated and implemented at both national and local levels.
- Expand awareness of the positive impact of remittances and diaspora contributions for migrant families in communities of origin. For instance, the endorsement by the UN General Assembly of the International Day of Family Remittances (IDFR)1 would be an important step toward recognition of remittances as a key component of the development agenda.
- Support initiatives in receiving countries that leverage on remittances and investment such as microcredit and remittance-linked products.
2.Expand and strengthen the collection, analysis and application of remittance- and diaspora-related data to foster effective policies and private-sector investment, and informed decision-making at the customer end
Data and market intelligence are the lifeblood of effective decision‑making.
The enormous scale of remittances is already well known – US$256 billion to Asia-Pacific in 2017 – with remittances to developing countries worldwide projected to reach US$6 trillion from now until 2030.
However, the wide scope of remittances is still not fully appreciated: 100 developing countries each currently receive more than US$100 million annually. In Asia-Pacific, those remittances go predominantly to countries with large rural populations.
Although remittance data continues to improve, availability, analysis and application of these data remains an issue. The same applies to disaggregated data regarding diaspora investment interest and capacity. These include both the collection and availability of transparent data to design remittance industry-related benchmarks, and the ability to evaluate their impact. These limitations lead to poor understanding about the motivations and requirements of senders and receivers of remittances and diaspora investors.
Building capacity for the proper collection and use of information is required to develop effective strategies and policies, for example, through regional remittance and diaspora investment observatories.
There have been successful examples such as Greenback 2.0 in Turin (Italy), Montreuil (France), Johor Bahru (Malaysia) and Lombok (Indonesia).
In turn, with access to information, financially literate remittance families and diasporas will have better opportunities and more options to use their money productively. At the same time, governments would have a much more reliable set of data to establish and modify their policies in this area.
Proposed actions include:
- Develop systems and surveys to identify and assess the level and impact of those flows of remittances that are not captured by the existing methodologies. Similarly, upgrade and expand the mechanisms to identify diaspora investment opportunities.
- Strengthen the capacity of public authorities to implement standardized measurement and reporting protocols for remittance flows and related data, beginning with existing market datasets.
- Disaggregate and disseminate national and local remittance data to stakeholders, highlighting key variables, including remittance flows, costs, access points and other data related to market competition and non-cash alternatives. For example, the Global Findex Database should be adapted to gather information regarding migratory states, in accordance with SDG 17.18.
- Engage the private sector to collect and provide data for analysis and strengthen the importance of their role in this field to Member States.
- Empower remittance families with practical, up-to-date information on costs, remittance products and services, and new access points and channels.
- Facilitate diasporas with practical, up-to-date information on investment opportunities, adapted mechanisms and products
- Leverage regional forums such as regional governmental organizations to collect and share remittance and migration data at the regional level to complement global datasets
3.Continuously review legal and regulatory frameworks on remittance and diaspora investments to promote harmonization across jurisdictions; and ensure that they spur competition, innovation, technology and integrity, leading to greater market efficiency and lower cost
Innovation for remittance markets can be summarized in two words: competition and digital.
It is important to adopt legal and regulatory frameworks that can enable and facilitate the role of the private sector in delivering faster, safer and cheaper remittances. In turn, the authorities should encourage, via improved enabling environments, the introduction of innovation and technology into remittance markets, which is critical to reaching the “last mile” and to creating remittance-linked financial services.
The majority of remittance transactions continue to be cash-to-cash, but this scenario is rapidly changing with the advent of Internet-based tools, digital technologies and other innovative mechanisms. Unregulated flows are expected to continue throughout the Asia-Pacific market for some time, due to lower costs, greater convenience and a sense of trust and familiarity, combined with challenges over enabling irregular migrants to use legal remittance services. However, it is clear that the improvements in the market will soon absorb a large part of those remittance flows.
Even if it is impossible to know exactly how the technological innovation will evolve, innovations and new services are now a permanent part of the remittances infrastructure and can contribute significantly in reducing transaction costs. It is imperative that regulatory environments enable the trial of innovative solutions in a safe environment.
Proposed actions include:
- Promote coordination between regulators and innovators to incubate proportionate regulations, sandbox and other safe regulatory environment approaches, and subsequently bring to scale successful models.
- Promote healthy competition in the remittances market, by ensuring its contestability and the application of competition laws (where they exist and especially in respect of exclusivity agreements) and educate market participants with respect to their options and obligations.
- Assess the remittance market against the General Principles for International Remittance Services, which will provide a set of concrete recommendations to improve the market.
- Implement regulations that enhance security and reduce risks for remittances that are proportionate in nature in order to avoid excessive and costly procedures for senders, recipients and financial institutions.
- Promote the sharing of experiences to facilitate greater sharing of harmonization of laws as well as enhance training and strengthen capacity building of national regulators.
- Support service providers on both ends of remittance corridors to deploy cost-cutting business models and technologies needed to reduce transaction costs of sending remittances to 3 per cent, by 2030.
- Strengthen international cooperation to support greater market development including enforcement and supervision of the remittance sector.
- Introduce enabling measures to dissuade users and operators of informal remittances to increase the usage of formal remittance channels
- Implement proportionate AML/CFT frameworks that 1) take advantage of low-risk situations to facilitate financial inclusion; 2) promote AML/CFT compliance by remittance firms.
4.Support financial inclusion and facilitate asset-building in order to leverage the impact of remittances and diaspora investment
Financial inclusion affects everything migrant families wish to accomplish.
While remittance recipients are still generally excluded from the formal financial system, they consistently demonstrate commitment to save and/or invest through channels that they understand and trust. Providing them with value-added options will improve long-term asset-building for themselves and their communities.
Experience demonstrates that: given more opportunities to save, remittance families will save more; given investment opportunities, customized to their circumstances and goals, remittance families will invest more; and given better mechanisms to develop their own human capital, they will make a strong commitment to their families’ future.
Proposed actions include:
- Develop and strengthen national financial inclusion strategies, ensuring that migrant families are involved and at the center of precise efforts to increase their role and support of the overall objectives of the strategies.
- Create and support public and private initiatives that facilitate the expansion of remittance-linked financial services customized for underserved populations.
- Implement and expand practical mechanisms to enable remittance families to save and invest in sustainable businesses at the local level, ranging from basic savings, diaspora bonds and crowdfunding.
- Promote financial literacy and asset-building strategies for remittance families to help them use their financial resources more productively.
- Identify and understand the specific needs and behavior of different groups of migrants (e.g. in terms of their age group and level of skills among others) to effectively promote the uptake of diaspora investments.
5.Convene the public and private sectors, and the civil society beginning from the local level up to national and international levels, to coordinate and implement strategies, policies and actions, and evaluate implementation efforts on a regular basis
Stakeholders at all levels must engage to ensure sustainable impact from remittances.
Maximizing the impact of migrant remittances and investments will require collaboration among major stakeholders to develop appropriate frameworks to reach the SDGs. These partnerships should focus particularly on how to implement best practices down to local levels.
Policy coherence among government and private institutions requires capacity-building in order to integrate remittances, migrant investment capital and entrepreneurship into strategic priorities and development plans.
Proposed actions include:
- Encourage public-private partnerships that promote new technologies, product development, investment and business models, as well as greater consumer participation in financial institutions, particularly in underserved, rural and remote areas.
- Stimulate knowledge-sharing and the dissemination of best practices for harnessing remittances and diaspora investment through international, regional and national platforms.
- Support advocacy programs and discourses on remittances to promote ownership of issues at the country and regional level. This includes ensuring continuity to the GFRID 2018 Asia-Pacific process and dialogue by identifying future Member States to undertake this initiative, and maintaining an open dialogue among the public and private sectors and the civil society at the regional level.
- Incorporate into future Forums a process to follow up and assess the implementation of the objectives of the Global Compact for Safe, Orderly and Regular Migration, in particular with regards to the aspects related to diaspora contributions (Objective 19) and migrant remittances (Objective 20).
Download Outcomes document from here.