Pardee-CFLP-Remittances-TF-Report

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flows came from migrant workers in the Middle East, 17.2 percent from the EUregion, and 3 percent from North America (Central Bank of Sri Lanka AnnualReport 2011).As previously noted, at the macro level, remittances have been vital in enablingSri Lanka to finance large trade deficits. At the micro level, given that war-tornareas in countries like Sri Lanka often lack well-developed political structuresto channel sufficient investments, remittances provide a more reliable meansrelative to other forms of foreign financial flows to sustain and insure familymembers unable to migrate. By providing coping strategies for householdsaffected and displaced by conflict, remittances can contribute to human security.Diaspora-funded reconstruction programs may also have an advantage inidentifying and addressing local needs compared to donors from other culturessince diaspora members are more familiar with the ground realities in theirhome country. Studies suggest that remittances from migrants have providedadditional financial resources and opportunities to vulnerable sections and familiesin both the Sinhalese and Tamil populations, who have been displaced andaffected by the civil war; these groups have relied on remittances from migrantrelatives for private consumption, rebuilding houses, restarting businesses, andalso for migration (Van Hear 2003; Fagen and Bump 2006; and Orjuela 2008). Forinstance, remittances of one migrant from a Sri Lankan Tamil family displacedby the war partly funded the schooling and farming activities of other familymembers who could not migrate. In another Sri Lankan Muslim family that wasdisplaced by an LTTE attack in 1990, the wife went to the Middle East to workas a housemaid. Her remittances helped the family to repay the loan taken tofinance her departure, purchase some livestock, and also to invest in jewelrythat could be sold in the future if the need for cash arose (Van Hear 2003).Further studies suggest that remittances have enabled some migrant-sendinghouseholds to spend more on food, health, and education in addition to enablingthem to receive a higher level of income from property, physical and financialassets, compared to non-migrant households (Arunatilake et al. 2010). However,these positive benefits of remittances appear to be very limited and uneven intheir impact. Using data from the 2003-04 Consumer Finance Survey and theCentral Bank, Arunatilake et al. (2010) show that only approximately 10 percentof households in Sri Lanka have been the recipients of remittances, with thedistribution of these remittances being concentrated among the richer and urbanhouseholds.Remittance Flows to Post-Conflict States: Perspectives on Human Security and Development 65
Remittance ChannelsSri Lanka has a fairly well-developed network of formal financial institutions tofacilitate formal remittance flows. These include state and private commercialbanks, the post office network, money transfer operators (MTOs), and microfinanceinstitutions. State commercial banks, such as the Bank of Ceylon (BOC)and People’s Bank (PB), dominate the formal remittance business due to theirextensive reach, with the BOC having approximately 303 branches, and thePB 648 branches across the country (Arunatilake et al. 2010). Banks offer retailproducts such as bank drafts, the Society for Worldwide Interbank FinancialTelecommunication (SWIFT) telex service, exchange houses, checking accounts,insurance products and securities to migrants (Lasagabaster, Maimbo, and Hulugalle2005; and Arunatilake et al. 2010). Rupee accounts and the non-residentforeign currency (NRFC) accounts are the two most popular foreign currencyaccounts with remitters, since banks do not charge a commission for theseaccounts, and these accounts are tax-free. Banks also offer online money transfersystems such as e-Exchange, People’s e-remittance, BOC e-cash, and Sampathe-remittance service (Arunatilake et al. 2010).Operating through banks, MTOs like Western Union and MoneyGram have alsoplayed an important role in providing formal remittance services. Western Unionis the leading MTO, having approximately 3,000 agent locations in Sri Lanka.More recently, an agreement between Western Union and Sri Lanka Post hasfurther expanded the reach of Western Union, with its MTO services being madeavailable in approximately 640 post offices. Sri Lanka Post also provides formalremittance services, such as money orders, but postal networks have been foundto be less efficient in delivery and more time-consuming compared to banks andMTOs (Lasagabaster, Maimbo, and Hulugalle 2005; and Arunatilake et al. 2010).This may gradually change with the recent agreement between Sri Lanka Postand Western Union.Nevertheless, informal remittance networks, particularly the Hawala system(called Undiyal by Sri Lankan Tamils), have grown in significance, and havebeen used by poorer labor migrants and the Tamil diaspora, particularly thosefrom the conflict-affected north and eastern regions of Sri Lanka. While Puri andRitzema (1999) estimated informal remittances to Sri Lanka to be approximately13 percent of total remittances in the early 1980s, the World Bank (Lasagabaster,Maimbo, and Hulugalle 2005) estimated that these remittances were nearly 45percent of total remittances in the mid-1990s. In the mid-2000s, they are esti-66 A Pardee Center Task Force Report | 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
Page 21 and 22: eceiving remittances provides an en
Page 23 and 24: associations for post-conflict inst
Page 25 and 26: are proposed to avoid the associate
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
Page 42 and 43: struction and development. Means sh
Page 44 and 45: opportunities should focus on exist
Page 46 and 47: 2. Dodd-Frank Act and Remittances t
Page 48 and 49: leadership. Formal payments systems
Page 50 and 51: and financial institutions. 26 Reso
Page 52 and 53: closures should be both in English
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
Page 60 and 61: the use of mobile devices for money
Page 62 and 63: Foreign TaxesUnder the 2012 regulat
Page 64 and 65: 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 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 116 and 117: areas. This issue can potentially b
Page 118 and 119: This is a breakthrough moment: afte
Page 120 and 121: 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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Pardee Center Conference ReportsDev
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