Boston University Center for Finance, Law & Policy Study Spotlights Global Reliance on Remittances
World Bank estimates $430 billion in worldwide remittances in 2013
Source Newsroom: Boston University College of Arts and Sciences
Newswise — (Boston) -- Boston University’s Center for Finance, Law, and Policy and BU’s Frederick S. Pardee Center for the Study of the Longer-Range Future today released a groundbreaking report on remittances to the world’s most unstable countries -- post-conflict states that have experienced widespread population displacement and/or endemic institutional breakdown.
“Remittances to Post-Conflict States: Perspectives on Human Security and Development” outlines the main challenges to leveraging remittances for post-conflict development. It makes 19 recommendations to promote financial inclusion, foster institutional partnerships, connect diaspora networks, and reform legal and regulatory frameworks.
Tens of millions of people leave these countries -- forced out by armed conflict, civil unrest, and ethnic/religious hostilities -- and send money back home to relatives still living under difficult circumstances. Over the past decade, improved reporting and analysis has led to better understanding of the importance of remittances to developing countries, estimated by the World Bank to reach at least US$430 billion in 2013.
“But relatively little research has been focused on the very countries where remittances are the most important. For that reason, we organized a task force to look at these flows to the most vulnerable places on earth, and to make recommendations on how to leverage their potential development impact,” said CFLP director BU law Prof. Cornelius Hurley.
The report indicates that more than 50 significant remittance countries have been affected by prolonged conflict, including (alphabetically): Afghanistan, Bangladesh, Ethiopia, Iraq, Lebanon, Libya, Nigeria, Pakistan, Rwanda, Somalia, Sri Lanka, and Yemen. Egypt and Syria now have joined the list. Significant diasporas also continue from earlier conflicts in Central America, the Balkans, Sub-Saharan Africa, and South Asia.
“All together, we believe that up to US$150 billion will be sent in remittances to these countries in 2013, from as many as 70 million relatives living abroad, significantly more than the combined totals of foreign aid and investment,” said Donald F. Terry, an international remittance expert and Task Force member.
The BU report suggests a broader approach to remittance institutions that provides flexibility to adapt to specific local practices and to make broader institutional connections in an era of growing population displacement and expanding human and capital flows.
“Because of the prevailingly informal nature of remittance delivery mechanisms in post-conflict settings, the importance of remittances in the economies of these regions has been vastly underestimated,” said BU economics Prof. John Harris. “Yet, remittances could be the largest source of capital for rebuilding post-conflict countries.”
The report is the outcome of a year-long research project to research, analyze, and propose policy recommendations regarding the role of remittances in post-conflict environments and their potential to serve as a major source of development. The task force consisted of 14 members from Boston University, UCLA, the University of Hamburg, the Sustainable Development Policy Institute in Islamabad, Pakistan, and the European Public Health Association.
Conditions for more productive utilization of migrants’ remittances are analyzed, drawing on case studies from four post-conflict countries: Pakistan, Sri Lanka, Liberia, and El Salvador. It concludes with a commentary, “Dodd-Frank Act and Remittances to Post-Conflict Countries, the Law of Unintended Consequences Strikes Again.”
(NOTE: The report will be discussed at a formal presentation, “Flows to Post-Conflict States: Perspectives on Human Security and Development,” on Thursday, 10/10/13, at 10 a.m. at the Hotel Commonwealth in Boston, featuring keynote speaker Dr. Atiur Rahman, Governor of the Bangladesh Bank.)
The BU Center for Finance, Law & Policy carries out its interdisciplinary mission by engaging students, faculty and market participants in a broad range of activities. Its novel approach to the challenges facing the financial sector and the economy leverages all facets of the university community and related stakeholders. It is the successor to the Morin Center for Banking and Financial Law formerly lodged in the BU Law School.
The BU Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston
University serves as an interdisciplinary catalyst for studying improvement of the
human condition through an increased understanding of complex trends in global
interactions of politics, economics, technological innovation, and human ecology. The
Center’s work seeks to identify, anticipate, and enhance the long-term potential for
human progress—with recognition of its complexity and uncertainties.
Founded in 1839, Boston University is an internationally recognized institution of higher education and research. With more than 33,000 students, it is the fourth-largest independent university in the United States. BU consists of 16 schools and colleges, along with a number of multi-disciplinary centers and institutes integral to the University’s research and teaching mission. In 2012, BU joined the Association of American Universities (AAU), a consortium of 62 leading research universities in the United States and Canada.
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(For the full report: http://www.bu.edu/bucflp/initiatives/remittances-and-development-in-post-conflict-states/)