Possible research focus on expatriate workers and their use of ICTs

Posted on August 19, 2007  /  2 Comments

As LIRNEasia plans its research program for 2008-09, the issue of money transfers through mobiles (first raised in the academic literature, to the best of my knowledge, by Professor Jens Arnbak  in his contribution to a book that I co-edited in 2002) is rising in importance in the news as well as in our own thinking.   

Migrant Cash Is World Economic Giant – Forbes.com

_ India is the world leader in remittances, taking in $23.7 billion in 2005 and an estimated $26.9 billion last year, the World Bank says. Western Union, traditionally one of the most frequently tapped money transfer companies, says its share of Indian transactions has grown at least 90 percent over each of the past six quarters.

_ Immigrants from Albania, one of Europe’s poorest countries, will send more than $1.3 billion back to their homeland this year. That’s 13 percent of Albania’s GDP and enough to finance half the trade deficit.

“Without the money we get from our son, who lives and works in Austria, my family and I would simply starve to death,” said Jovana Acimovic, a housewife struggling to make ends meet in Belgrade, Serbia.

In impoverished Tajikistan, the National Bank says migrant laborers sent home $1.1 billion last year – more than the country’s GDP. Filipinos working overseas sent home a record $13.6 billion in 2005. So much cash is flowing that mobile phone operators make it possible to transfer money over a cell phone.

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  1. According to this report in the Sunday Times (Sri Lanka), “Remittances from migrant workers, the second highest foreign exchange earners to the country, have financed 80 percent of Sri Lanka‚Äôs trade deficit in the first half of the year”

  2. Indeed. Transfers via mobiles is especially important given the often usurious and wildly ranging transfer charges by banks and financial institutions. Also, remittances to mobile and then m-payments is a way of reaching the unbanked, a platform for micro-credit, etc.

    Like the BOP mobile use being counter-intuitive, and as illustrated in the technology appropriation work that Francois Bar is doing (see http://abaporu.wordpress.com/abaporu/), remittances take many different forms and there are some creative solutions for getting the money back home more quickly and more cheaply.

    In the Americas – In Ecuador, there is a remittance project in which remittances are made to a local credit union – thus building up savings/resources for investment in the community as well. And, a recent study in Uruguay found that lots of remittances were being effected via the online purchase at Uruguayan store websites (such as La Tienda Inglesa – which sells everything from groceries, to appliances to electronics) paid for remotely and delivered locally. This minimises transfer and exchanges costs – and I suppose gives the remitter more control over how remittances are spent.