Pardee-CFLP-Remittances-TF-Report

ship between the U.S. and El Salvador: migration and remittances (Seelke 2012).Despite the dominant role that migration and remittances have played in contributingto sustaining growth and improving the human development optionsin both countries, the policy prescriptions proposed by the MCC and PFG topromote economic growth and reduce poverty do not systematically addressthe elements of the current transnational vicious cycle, nor do they refer to anyof the potential opportunities that migration, remittances, or other phenomena(such as technology) present for achieving development goals.In response to the shortcomings of the PFG, the NAID Center initiated the creationof an alternative database capable of measuring and making more visiblethe influence of transnational dynamics upon the growth challenges faced in ElSalvador as well as in Salvadoran migrant communities in the U.S. The objectiveis to contribute to the debate and to the design of other sets of policy prescriptionsin both the U.S. and El Salvador, including but not limited to rational immigrationreform and related development policies. This database and the processof transnational data collection and analysis methodologies aim to serve ascomplements to the PFG’s economic analysis. By offering insight into the humandevelopment challenges and opportunities for acting across borders, the NAIDCenter hopes to contribute to the creation of more informed and coordinatedpolicies that address the root causes of the vicious cycle and capitalize upon theopportunities for arriving at a virtuous cycle (UNDP El Salvador 2014).A Longer-Term Approach to Transforming the Vicious CycleOpportunities for Transnational Remittances and DevelopmentAt the UCLA NAID Center, we are using a longer-term approach to diagnose thenature of these problems, come up with real solutions, implement these solutions,and then test the implementation. To achieve this requires a wide range ofmechanisms to help understand and diagnose the complex roots of the problem.For example, how do we diagnose the problem of why remittances remainprimarily in a cash environment and generate a vicious rather than a virtuouscycle? Is it a problem of banks, regulations, or the inability of the MFIs and creditunions to break into this cycle? We’ve been analyzing the various componentsacross the migration and remittance flows to determine the type of technology,regulatory, and/or marketing interventions that would be needed to correctthis problem. We’ve also gone further in asking and analyzing what would berequired to create a transnational ecosystem that could potentially give accessto financial services in the North and the South. Such an ecosystem would allow106 A Pardee Center Task Force Report | October 2013