Pardee-CFLP-Remittances-TF-Report

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