Pardee-CFLP-Remittances-TF-Report

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IntroductionPost-Conflict Remittances and Human Security:Perspectives on Peace-Building, Institutions,and DevelopmentDaivi Rodima-Taylor, Donald F. Terry, and John R. HarrisVast amounts of capital are transferred around the world through remittances.1 Remittances can be a major catalyst for economic and social developmentparticularly in post-conflict contexts of widespread population displacement andendemic institutional breakdown. Currently, there is a lack of proper understandingof the role of remittances in the post-conflict processes of rehabilitation,development, and productive investment. Because of the prevailingly informalnature of remittance delivery mechanisms in post-conflict settings, the importanceof remittances in the economies of these regions has been vastly underestimated.Yet, remittances could be the largest source of capital for rebuildingpost-conflict countries.Post-conflict situations characterize a country or region that is emerging froma violent conflict or prolonged social, ethnic, or religious hostilities that haveresulted in widespread population displacement and the formation of considerablerefugee communities abroad. As potential for further violence remains inthese fragile settings, remittances play a major role in post-conflict recovery anddevelopment. Violent conflicts, civil wars, and rebel insurgencies impact locallivelihoods and family relations, networks of social security, and institutionaland physical infrastructures. By diversifying local livelihoods and spreading risk,remittances contribute to poverty alleviation. Remittances are not only materialbut may also include transfers of new skills, values, and technologies. Remittancesare important to all aspects of human security, including economic andfood security, health, environment, and community.It has been widely accepted that migrant remittances make up a sizable portionof global financial flows and considerably exceed official development aid:“Taking remittances through unofficial channels into account, remittances aresurely greater than foreign aid, and constitute a more constant source of income1 The term “remittances” refers to migrants’ material transfers to their country of origin either for personal use,savings, investment, or community development. Remittances can be both monetary and in-kind; individual as wellas collective (Lindley 2009).Remittance Flows to Post-Conflict States: Perspectives on Human Security and Development 3
to developing countries than other private flows and foreign direct investments”(Sorensen, Van Hear, and Engberg-Pedersen 2003, 26). The study of post-conflictremittances has been very sparse, however. In order to facilitate better localaccess to this vital resource, more research is urgently needed into post-conflictBecause of the prevailingly informal natureof remittance delivery mechanisms in postconflictsettings, the importance of remittancesin the economies of these regions hasbeen vastly underestimated.remittance flows, the mechanismsof their delivery, andthe ways of better integrationof remittances in post-conflictreconstruction and developmentefforts.The Role of Migrant Remittances in Post-ConflictdevelopmentRemittances can be of utmost relevance in fighting poverty—by diversifyinghousehold sources of income in the contexts of insecurity, providing capitalfor productive investment and facilitating local markets, and funding education,health, and other social expenses (Plaza and Ratha 2011; Lindley 2009).Numerous studies from Africa have shown that “remittances are associated witha reduction in the share of people in poverty—and, in some cases, the depthand severity of poverty as well” (Mohapatra and Ratha 2011, 17). Evidencefrom conflict-affected Somalia shows how refugees’ remittances have provedsignificant in providing “substantial charitable funding for public services andinfrastructure—schools, hospitals, mosques and community projects such asbuilding water reservoirs” that have fostered local and decentralized reconstructionprocesses in the war-torn country (Lindley 2009, 778). Remittances havea potential of contributing to financing post-conflict recovery in the long term.Remittance flows are particularly important for “unbanked” individuals andhouseholds and can facilitate their ties with the formal financial sector (Gupta,Pattillo, and Wagh 2009).The relevance of remittances to the macro-economic development of a post-conflictcountry is enhanced by their relative independence from economic cycles,making them more stable than private capital flows or foreign developmentassistance. Remittances help reduce the volatility of capital flows and improvethe evaluations of countries’ sovereign ratings, creditworthiness, and outreach tointernational capital markets (Mohapatra and Ratha 2011, 12).4 A Pardee Center Task Force Report | October 2013
Page 1 and 2: Pardee Center TASK FORCE Report oct
Page 3 and 4: This series of papers, Pardee Cente
Page 5 and 6: AcknowledgementsThis Task Force on
Page 7 and 8: ITU International Telecommunication
Page 9: networks and migrant associations i
Page 13 and 14: But most importantly, remittances a
Page 15 and 16: often mix in the countries of desti
Page 17 and 18: According to the World Bank estimat
Page 19 and 20: Because of its focus on the multidi
Page 21 and 22: eceiving remittances provides an en
Page 23 and 24: associations for post-conflict inst
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Page 27 and 28: Terry, D. 2005. Remittances as a De
Page 29 and 30: oader approach to post-conflict rem
Page 31 and 32: networks can be seen as “homogeno
Page 33 and 34: That personalized nature of hawala
Page 35 and 36: Customary law (xeer) and other trad
Page 37 and 38: the world (Lindley 2009, 531). Much
Page 40 and 41: ize the informal equal efforts to a
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Page 44 and 45: opportunities should focus on exist
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Page 48 and 49: leadership. Formal payments systems
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Page 54 and 55: issued a new proposed regulation De
Page 56 and 57: “closed network,” in which all
Page 58 and 59: Some guidance may be found in the p
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the use of mobile devices for money
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Foreign TaxesUnder the 2012 regulat
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will be available in all cases. CFP
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Section II: Remittances in Post-Con
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Sri Lanka. The conflict also result
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Figure 2: Current Account, Trade Ba
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flows came from migrant workers in
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Informal Remittance Channels in Sri
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tory authorities, with some calls f
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4. The Role of Remittances in Post-
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Figure 1: Liberia Per Capita Income
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associations, women’s groups, alu
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Remittances to LiberiaValue of Remi
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credit because of the need to be li
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Remittance Transfers in Sierra Leon
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Knowledge RemittanceThe Liberian di
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process furthermore was a pioneerin
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Levitt, Peggy and Deepak Lamba-Niev
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Section III: Diaspora Networks andC
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Post-Conflict Development,” this
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One of the main challenges for mobi
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6. Transnational Remittances and De
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The Salvadoran Diaspora is very sig
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annually during the 1990s to less t
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Figure 2: Transnational Vicious Cyc
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The transnational vicious cycle not
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emittance flows is mixed, as initia
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individuals, communities, and famil
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areas. This issue can potentially b
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This is a breakthrough moment: afte
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Edwards, Sebastian and I. Igal Mage
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y La Distribucion Del Ingreso, 1st
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7. Remittances and Community Resili
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For quantitative data collection, a
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Remittances are perceived as playin
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the affected population. Internatio
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ReferencesAddleton, J. 1984. The im
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8. Filling the Gap in Health Staffi
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The alternative is for donors to se
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cians in the U.S. in 2000 (Clemens
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1. Remittances, Financial Inclusion
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networks, and communities. The role
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• In the present era of heightene
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the island of Kosrae, in the Federa
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and Sweden and has held visiting pr
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he organized a number of workshops
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