The World Bank and the International Fund for Agricultural Development (IFAD) collaborated with Malaysia to organize the three-day forum, from 8-10 May, on the theme of ‘Leveraging Remittances for SDGs: A Call to Action.’ Over 400 delegates from the public and private sectors, including financial regulators, central banks, the diplomatic corps, microfinance agencies and commercial banks, attended the forum.
On the occasion of the Forum, IFAD launched a report titled, ‘RemitSCOPE – Remittance Markets and Opportunities – Asia and the Pacific.’ (16 pages)
- It estimates that approximately one billion people worldwide send and receive remittances, and that the Asia-Pacific region receives 55% of all such flows, amounting to more than 20% of some countries’ gross domestic product (GDP) and totaling near US$256 billion.
- Per the report, migrants bear a heavy burden in transaction costs, which averaged 6.86% in the region in 2017. Costs rose as high as 8.9% in small Pacific island States.
- IFAD also launched a web portal, ‘RemitSCOPE,’ which provides access to information on remittance markets and opportunities in the region.
About 70 per cent of remittances sent to Asia and the Pacific come from outside the region, led by the Gulf States (32 per cent), North America (26 per cent) and Europe (12 per cent). • Increasingly, the majority of migrants (60 per cent) now find work in Asia and the Pacific, although their level of remittances is substantially lower than the level of remittances sent back from other regions. (page 8)
Concerted efforts to promote public-private partnerships to leverage the impact of remittances have been successfully implemented in Pakistan, Bangladesh, Nepal, Sri Lanka and, most of all, in the Philippines. (page 10)
Remittance market in Asia-Pacific
IFAD presented the key findings from its latest research – RemitSCOPE:
Remittance markets and opportunities – Asia and the Pacific, aimed at providing a better understanding of
the remittance market and the best regulatory practices in place. RemitSCOPE Asia-Pacific highlighted industry trends and opportunities in today’s Asia-Pacific remittance market and set the tone for the
subsequent Forum discussions.
- Pedro De Vasconcelos, Senior Technical Advisor and Manager of the Financing Facility for Remittances, IFAD
- Leon Isaacs, Chief Executive Officer, Developing Markets Associates Ltd. (DMA)
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| Norbert Mumba, Deputy Executive Director, Alliance of Financial Inclusion (AFI) |
Over the last two decades, migrants and their families have contributed extensively to rural development. Through both remittance usage and direct investment into small agricultural activities, migrants have de facto become the largest contributors to development aid in rural communities.
From the remittances and diaspora capital invested in agriculture, these contributions represent over four times global ODA to agriculture. The first half of this panel will address numerous examples of such interventions by migrant families and showcase limitations and opportunities for reaching significant scale. The second part will bring practical cases that can be replicated and scaled up with a potential long-term positive impact in rural transformation.
- Besides remittances sent to relatives, diaspora capital represents a significant and often untapped source of financing to support local development in countries of origin.
- Various investment mechanisms match the diaspora expectations to invest back home to build assets and earn financial or social returns depending on their risk appetite and financial capacities.
- Sovereign diaspora bonds issued by governments and targeting the better-off and financially literate segments of the diaspora leverage significant resource to finance country-wide public investments if properly promoted in host countries and distributed in compliance with national laws.
- Venture capital investment fund targeting SMEs constitute a promising vehicle appealing to diaspora members as they have a more direct impact on job creation and value chains. The distribution of individual shares to diaspora members require legal and marketing engineering.
- Lending crowdfunding platforms offer the possibility to finance individual entrepreneurs even with limited contribution from the diaspora. In return, they don’t bear financial earnings and cater to diaspora philanthropic investors.
- Other models, supported by donors, include seed capital matching grant mechanisms catalysing diaspora loans to finance rural SMEs and the brokerage of agri-based cooperatives’ shares to migrant investors through trusted NGOs.
- The relevance of the different investment models is highly context-dependent and have to take into consideration the diaspora investment profiles, the regulatory environments (in host and home countries) and the capacity of fund managers or trustworthy investment brokers to promote investment opportunities abroad.
Private-public-people partnerships
The private sector plays a pivotal role in providing sustainable options to migrant workers and their families to
leverage the impact of their remittances and investments at household and macro-economic levels.
- Patrice Kiiru (see picture), General Manager, Diaspora Banking and International Money Transfer, Equity
Bank Group
Responsible for the Diaspora Banking and International Remittances strategy at Equity Group for the teams located in Kenya, Uganda, Tanzania, Rwanda, DR Congo and South Sudan
See the video recording - Md Shafiqur Rahman, Director General, Special Security Force, Government of Bangladesh
- Jaspreet Singh, Regional Technical Specialist for Digital Financial Services, United Nations Capital Development Fund (UNCDF)
- Prasun Kumar Das, Secretary General, Asia-Pacific Rural and Agricultural Credit Association (APRACA)
Background and references
The Global Forum on Remittances, Investment and Development (GFRID) was established in 2008 as a forum to promote good practice and collaboration. Besides improving the efficiency and reach of financial services for migrants, the forum seeks to promote financing for agriculture through diaspora investment, and to create a multi-stakeholder platform for regional dialogue and action. - [GFRID Agenda and Background Information]
- [Links to GFRID Newsletters 2018]
- [IFAD Opening Press Release]
- [IFAD Press Release on Report]
- [IFAD Press Release on Web Portal]
Related:
16 June 2018 International Day of Family Remittances (IDFR), This day recognizes the significant financial contribution migrant workers make to the wellbeing of their families back home and to the sustainable development of their countries of origin.
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