International Day of Family Remittances

In recognition of the fundamental contribution of migrant workers to their families and communities back home, and to the sustainable development of their countries of origin


There are almost 250 million international migrants worldwide living outside the country they call home. Throughout civilization, people have always been on the move, seeking better opportunities for themselves and their families; but the scale of migration from rural to urban areas, and across national borders in the 21st century, is unprecedented. Indeed, this phenomenon has been accurately characterized as “the human face of globalization”.

No matter how many people leave home, many more remain behind. It is estimated that family remittances – the money sent back by migrant workers to their relatives – support another 750 million people worldwide. Adding senders and receivers together, remittances directly touch the lives of one in every seven people on Earth.

A significant majority of migrant workers send money home, typically US$200 or US$300, several times a year. While these amounts may appear to be relatively small, they are often 50 per cent or more of their families’ income back home. Adding together all the billions of transactions involved, remittances reached over US$450 billion in 2015, more than three times the official development assistance from all sources.

Fifteen years ago, remittances were literally unaccounted for because migrant workers and their families “didn’t count”. This has changed dramatically, as remittances have now become an important part of the development agenda for governments and international organizations working around the globe to lower transfer costs, promote financial inclusion, and maximize the impact of these resources for the benefit of families and the communities where they live. It is within our capacity to make every hard-earned dollar, euro, pound, ruble, yen, dinar or naira sent home “count”.

These flows already represent a critical lifeline for millions of households,  helping families raise their living standards above subsistence and vulnerability levels, as the extra income goes toward improving health, education and housing, and starting or expanding businesses. But remittances have the potential to “count even more”.

It is indeed at the local level that the positive impact of remittances can be amplified by providing more options and greater economic opportunities for families on the receiving end.

Remittances “count the most” in the small rural towns and villages of developing countries around the world. Here, the most important  value is not measured by millions or billions, but by the individual remittance that a father or mother, son or daughter, sister or brother sends home regularly as a demonstration of devotion and commitment to their families’ future.

Proclaiming an International Day of Family Remittances represents an invaluable opportunity not only to recognize the efforts of migrant workers globally, but also to strengthen current partnerships and create new synergies among sectors to promote the development impact of remittances worldwide. More specifically:

a) Public-private partnerships to create a more favourable regulatory and market environment for remittance flows, particularly reaching the “last mile” of rural communities through financial access and inclusion;

b) Private-sector initiatives to contribute to increased competition, lower transaction costs and provide innovative financial products to meet the needs of low-income families; and

c) Civil society collaboration to identify a broader range of economic opportunities and share knowledge resulting in more options to improve the living standards of remittance families.


2016 observance

In celebrating the event this year, over eighty money transfer operators have endorsed the International Day of Family Remittances and have committed to take concrete action to ensure that every hard-earned dollar, euro, pound, rouble, yen, dinar or naira sent home count for even more. Their endorsements can be found here.


Background:

The Global Forum on Remittances, organized by the International Fund for Agricultural Development (IFAD) and the World Bank, held in Bangkok in May 2013, unanimously recommended proclaiming an International Day of Family Remittances (IDFR) and called for IFAD to take the lead in seeking formal recognition of this day.

Objective of the observance is to recognize and raise global awareness of the fundamental contribution of migrant workers to the wellbeing of their families and communities of origin, and the importance of remittances to further contribute to the sustainable development of their countries, particularly in rural areas.

IFAD’s Executive Board approved the observance of the IDFR in December 2014, followed by the formal endorsement of the Governing Council at its 38th session in February 2015. The first celebration of the IDFR took place on 16 June 2015 in Milan, in the context of the Global Forum on Remittances and Development, in presence of over 400 high-level representatives from the public and private sectors, as well as the civil society. Patron of the Day was Her Excellency Queen Máxima of the Netherlands in her capacity of United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA).

As stated in the Resolution, the proposal of an International Day of Family Remittances is currently being submitted to the attention of the United Nations General Assembly for formal endorsement and universal recognition.


Development priorities:

While remittance flows already have substantial positive impact, they could contribute significantly to several key development priorities through new partnerships, improved policies, and up-scaled innovations:

Financial inclusionContext: The vast majority of remittance families live and work outside of the global financial system; as a result, a significant portion of transactions is channeled outside the traditional financial sector. Remittances often represent the first, and perhaps best opportunity to incorporate recipients into the formal financial sector. | Opportunities: Improve access to financial intermediation and products that are appropriate to the needs of remittance families – savings, credit and investment opportunities, financial training, and expansion of outreach to rural communities.

International and domestic payment system developmentContext: Payment infrastructures are neither widely accessible nor used for remittance transfers, and the industry often relies on inefficient and expensive systems and networks, particularly in rural areas. | Opportunities: Strengthen payment infrastructures at national and regional levels; increase competition in the provision of remittances services and the availability of electronic payments and new technologies; and expand the access to financial institutions in under-served and rural markets.

Food securityContext: Family remittances invested in agriculture equal four times global ODA to agriculture, thereby contributing extensively to food security and rural development. | Opportunities: Efficiently integrate investments into agricultural modernization and value chains, supporting local markets, trade, jobs and food sufficiency.

South-South flowsContext: A growing number of family remittances are being sent between neighbouring developing countries, usually back to rural communities. Due to poor financial access, inadequate regulatory framework and limited payments infrastructure, these markets are the least competitive in the world, often resulting in extremely high transaction costs. | Opportunities: South-South integration of knowledge, legal environments, markets and payment systems are a means to expand trade and spark higher economic growth. As transactions costs are reduced, more funds would become available for consumption and investment.

Fragile StatesContext: When conflicts or crises emerge, more people migrate, and migrants already abroad send significantly more money back home. These flows are critical to preventing governance instability at all levels. | OpportunitiesConfronted with such difficult circumstances, remittances provide not only a lifeline to individual families, but also the seeds for greater opportunity and the prospects for recovery and stability.

GenderContext: Family roles are changing rapidly, as many women are now generating income for their families in non-traditional ways. At the global level, female migrants send approximately the same amount of remittances as male migrants. | Opportunities: Women already constitute the vast majority of microfinance clients, often using loans for working capital to start their own businesses; remittances can provide the basis to expand successful family enterprises and to engage women in local economic activities.

YouthContext: Most family members supported by remittances are youth – either children of migrant workers or their younger sisters and brothers. | Opportunities: Generate more options for the “next generation” to stay home and contribute to their communities through targeted education and training programmes. These initiatives would focus on meeting local needs, and provide small-scale “seed capital” for entrepreneurial activities.

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