Remittances

Remittances are migrant workers' earnings sent back from the country of employment to the country of origin. They play a central role in the economies of many labour-sending countries and have become a focal point in the ongoing debate concerning the costs and benefits of international migration for employment.

The protection of the rights of migrant workers has always held an important place among the ILO's activities. Separated from their homeland, faced with a new way of life and working conditions and poorly prepared for the defence of their interests in a sometimes hostile environment, migrant workers are open to exploitation.

Focus & Activities of the Social Finance Programme:

Remittances are a form of social finance, i.e. a financial transaction that optimizes private and social returns. Remittances can yield a win-win situation: 

• for the migrant (monetary savings, investment in land and fixed assets, enhanced social standing),  
• for his/her family (through income stabilisation, safety net in times of crisis, a means of financial inclusion),
• for the home community (the creation of social and economic infrastructure that public authorities should but fail to provide),
• for the economy of the home country (relieving the foreign exchange shortage, possibly stimulating growth). 

In November 2000, the Social Finance Programme of the ILO (SFP) organized a major international conference “Making the best of Globalization – the role of remittances”. It was an opportunity to examine systematically the private and social costs and benefits of remittances, and especially to look at remittances from the migrant workers’ point of view.

Through our action-oriented research programme on migrant worker remittances and microfinance in Bangladesh, Mexico (in Spanish), Nepal, Senegal and South Africa, the Social Finance Programme aims to map current remittance patterns between and within countries and to assess the availability of suitable transfer services and the transaction costs involved.

Related resources 

• ILO participates in an inter-agency task force on remittances.  The task force was designed by participants of the 2003 International Conference on Migrant Remittances, organized by DFID and the World Bank and focuses on two priorities:
1. the development of remittance principles; and
2. improved remittances data collection, coordination and dissemination.

• Migrant remittances Newsletter, quarterly published by USAID.

• World Savings Banks Institute (WSBI) organised a conference on remittances in December 2003.

• G8 Action Plan on Migrant Remittances.

For more information, please contact Bernd Balkenhol.