Pardee-CFLP-Remittances-TF-Report

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areas. This issue can potentially be addressed through the creation of financialinstruments like “Diaspora Development Savings Bonds” for El Salvador,Mexico, and other migration and remittance-dependent countries, where thissavings instrument would be made available to U.S. migrants or others as a safeway to save a part of their remittances or income at a fixed term and interest rate(Ketkar and Ratha 2010). This type of savings bond could be issued by local MFIsin migrant-sending communities and be backed by development institutions likeUSAID-DCA, the World Bank, and others, as well as by private investors; suchbonds could be used to create risk pools that can reduce the cost of lending andgenerate a focus on productive activities in im/migrant-sending areas. Throughthe savings generated and financial partnerships, the MFIs are incentivized tosupport local development investments, generating both regional developmentand macro-economic impacts.In cities such as Oakland, Richmond, and Los Angeles, California a local-localtransnational approach is employed in which technology is being adopted forcreating mobile-linked city ID debit cards, or resident IDs regardless of immigrationstatus. These city ID debit cards will then be linked to municipalitiesin El Salvador that are also issuing and adopting municipal debit cards linkedto mobile banking technology (Artz 2013; Saillant 2012). Providing this choicehas had dramatic effects in the interest of people to adopt these mobile/debitmechanisms. Other research has independently predicted the same results,where if you provide immigrants with the ability to send a remittance to a savingsaccount then the amount sent goes up; and more importantly, if you presentpeople with a mechanism whereby they can send money and control access tothat account from the U.S., the amount sent goes up even further (Ashraf et al.2011). It has been demonstrated that technology and business solutions can beinvented to get remittance flows into a local development banking system. Adoptionof this platform in U.S. cities and home villages is currently being measuredto see what types of impacts this intervention will have on local production andincomes as well as on financial inclusion and access to credit in im/migrantsendingregions.Once this technology is widely available, it can be used for a varied range ofapplications beyond remittances and savings; it can become the conduit foranyone to access a wide range of financial services, such as micro-insurance,microcredit, and micro-payments, for example. In fact, the Salvadoran SocialSecurity Institute (ISSS) is working with the NAID Center to enable the smallscale purchase of health insurance by migrants for their family members inRemittance Flows to Post-Conflict States: Perspectives on Human Security and Development 109
El Salvador. While manycountries and companieshave tried to implementsuch a product, the majorproblem has been how tomake these products easilyavailable using a financialtransfer mechanism thatis readily accessible andIn post-conflict environments, especiallywhere the North and South are increasinglylinked through migration and remittances,the mobilization of just a fraction ofthe $400 billion in global remittance flowstowards development goals offers seriouspotential for creating major developmentimpacts across borders.that has reduced transaction costs. The transnational mobile and debit linkedelectronic payments platform that is central to our intervention allows for this tofinally happen.The Salvadoran government is also pursuing another application of this technologythrough the potential implementation of the mobile debit electronicpayments platform for distributing subsidy payments. 9 El Salvador like mostdeveloping countries around the world subsidizes many things, and one of themost expensive is liquid gas for cooking. Currently, the government is subsidizingthe market price of all liquid propane gas purchases at a cost of hundreds ofmillions of dollars, which the IMF has said is fiscally unsustainable. Using mobilebanking technology, the government can give a “subsidy account” to every singlehousehold in the country. This will significantly reduce logistical expenses forthe government and the subsidy recipients, and it will localize the use of the subsidy,as the funds on the “subsidy account” can only be used to buy gas at storesaffiliated as gas distributors. At the same time, the government will contributeto increasing the electronic payments capacity of El Salvador by eight times byadding nearly 40,000 gas distributors to the existing network of 5,000 storeswith a Point of Sale (POS), and by turning cell phones into electronic points ofpayment. The projected impact is a reduction of the fiscal deficit of the countryby 20 percent by conducting just this one subsidy on the platform. For individualhouseholds, there is also significant value added; by using the same debit cardmobile platform, these households will also be able to receive and send low-costremittances, and in the future access a range of microfinance services that maycontribute to further reducing household vulnerabilities.9 This is a trend that is gaining ground around the world to transform government subsidies and other forms ofcash transfers into tools for promoting savings, in addition to resolving problems of focalizing the use of subsidies(Zimmerman, Ravi, and Tosh 2012; Jackelen and Zimmerman 2011).110 A <strong>Pardee</strong> Center Task Force <strong>Report</strong> | October 2013
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Pardee Center TASK FORCE Report oct
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This series of papers, Pardee Cente
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AcknowledgementsThis Task Force on
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ITU International Telecommunication
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networks and migrant associations i
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to developing countries than other
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But most importantly, remittances a
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often mix in the countries of desti
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According to the World Bank estimat
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Because of its focus on the multidi
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eceiving remittances provides an en
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associations for post-conflict inst
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are proposed to avoid the associate
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Terry, D. 2005. Remittances as a De
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oader approach to post-conflict rem
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networks can be seen as “homogeno
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That personalized nature of hawala
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Customary law (xeer) and other trad
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the world (Lindley 2009, 531). Much
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ize the informal equal efforts to a
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struction and development. Means sh
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opportunities should focus on exist
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2. Dodd-Frank Act and Remittances t
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leadership. Formal payments systems
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and financial institutions. 26 Reso
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closures should be both in English
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issued a new proposed regulation De
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“closed network,” in which all
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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
Page 66 and 67: Section II: Remittances in Post-Con
Page 68 and 69: Sri Lanka. The conflict also result
Page 70 and 71: Figure 2: Current Account, Trade Ba
Page 72 and 73: flows came from migrant workers in
Page 74 and 75: Informal Remittance Channels in Sri
Page 76 and 77: tory authorities, with some calls f
Page 78 and 79: 4. The Role of Remittances in Post-
Page 80 and 81: Figure 1: Liberia Per Capita Income
Page 82 and 83: associations, women’s groups, alu
Page 84 and 85: Remittances to LiberiaValue of Remi
Page 86 and 87: credit because of the need to be li
Page 88 and 89: Remittance Transfers in Sierra Leon
Page 90 and 91: Knowledge RemittanceThe Liberian di
Page 92 and 93: process furthermore was a pioneerin
Page 94 and 95: Levitt, Peggy and Deepak Lamba-Niev
Page 96 and 97: Section III: Diaspora Networks andC
Page 98 and 99: Post-Conflict Development,” this
Page 100 and 101: One of the main challenges for mobi
Page 102 and 103: 6. Transnational Remittances and De
Page 104 and 105: The Salvadoran Diaspora is very sig
Page 106 and 107: annually during the 1990s to less t
Page 108 and 109: Figure 2: Transnational Vicious Cyc
Page 110 and 111: The transnational vicious cycle not
Page 112 and 113: emittance flows is mixed, as initia
Page 114 and 115: individuals, communities, and famil
Page 118 and 119: This is a breakthrough moment: afte
Page 120 and 121: Edwards, Sebastian and I. Igal Mage
Page 122 and 123: y La Distribucion Del Ingreso, 1st
Page 124 and 125: 7. Remittances and Community Resili
Page 126 and 127: For quantitative data collection, a
Page 128 and 129: Remittances are perceived as playin
Page 130 and 131: the affected population. Internatio
Page 132 and 133: ReferencesAddleton, J. 1984. The im
Page 134 and 135: 8. Filling the Gap in Health Staffi
Page 136 and 137: The alternative is for donors to se
Page 138 and 139: cians in the U.S. in 2000 (Clemens
Page 141 and 142: 1. Remittances, Financial Inclusion
Page 143 and 144: networks, and communities. The role
Page 145 and 146: • In the present era of heightene
Page 147 and 148: the island of Kosrae, in the Federa
Page 149 and 150: and Sweden and has held visiting pr
Page 151 and 152: he organized a number of workshops
Page 153 and 154: Pardee Center Conference ReportsDev
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