Survey Shows Remittances From Britain To Developing Countries Emerging As A Growing Counter To Poverty

Remittances Do More Than Investments: "We recognise that people in the UK from other parts of Asia and the world bring huge benefits to their country," Gareth Thomas, the UK Department for International Development (DFID) minister for international development told IPS.

The British are not investing a great deal in the developing world, but remittances from Britain are emerging as a growing counter to poverty, a new survey shows.

Immigrants and their families from South Asia, Africa and the Caribbean remit on average 870 pounds (1,627 dollars) a family a year, according to a survey ordered by the Department for International Development (DFID).

"We recognise that people in the UK from other parts of Asia and the world bring huge benefits to their country," Gareth Thomas, minister for international development told IPS.

"We welcome the fact that they are fighting against poverty by sending money to their families and friends. We all have responsibilities to our parents and families. This is clearly a way in which people here recognise that responsibility and we welcome it."

The estimated remittances far outweigh foreign direct investments in almost all developing countries from where migrant families were surveyed.

While investments are simple enough to quantify, remittances are not. "This survey is designed from our point to actually focus on that lack of information," Thomas said. "Of how much money is going from UK to Asia, and Africa."

DFID believes that such remittances are a substantial factor in countering poverty.

"International remittances flows are very large and growing, constituting now a large share of international financial flows and acquiring an ever greater importance in the balance of payments of recipient countries," the survey report says. Besides, they help in "supplementing the incomes of millions of families in developing countries."

DFID said it had carried out the survey as part of "a concerted effort by international organisations, bilateral donors and non-governmental organisations to better understand the characteristics of migrant remittances in order to help maximise their developmental impacts."

The survey carried out by the company ICM Research in May 2006 was organised as a series or self-completion questionnaires distributed in 143 areas to all black and minority households who had been remitting at least once over the previous 12 months. A total of 1778 questionnaires were returned.

The survey belies fears that remittances may be declining because the first wave of immigration in Britain dates to the 1950s and 1960s, and that new generations may lose touch with their country of origin.

"On the contrary what we see is enhancement of the process," Mohmud Mohamed, vice-president of Global Financial Institutions with Citigroup told IPS. "This is an evolving process, it will continue."

Several companies are finding new money in the business of sending money.

Suraj Vaghani, country manager for Britain for the company Travelex told IPS that the business in remittances is steadily growing. "We anticipate a lot of growth from UK, U.S. and other countriesàlots of diaspora are supporting their families back home."

Households in the survey remitted money to over 50 different developing countries. Four in ten remitting households sent money to Africa, with Nigeria being the leading recipient nation in terms of number of remitting households (17 percent). Other countries receiving remittances from large numbers of households were India (14 percent), Pakistan (10 percent), Jamaica (7 percent) and Ghana (5 percent).

In almost half of cases (47 percent) remitters send money to parents, in roughly a quarter of cases each to "other" relatives (a category including also uncles, aunts and cousins) and to siblings. A small number of remitters declared sending monies to spouses (7 percent) or children (8 percent) living abroad, percentages comparable with those who declared remitting to friends (8 percent).

The survey found a tendency for some ethnic groups to send more remittances than others, but once income and other household's characteristics like the number of members, presence of children and motivations for sending money are taken into account ethnicity does not seem to have a strong influence on the amount of money remitted.

In terms of uses of monies, a significant proportion is claimed to be used for buying food (31 percent) or for other primary necessities such as paying for medical expenses (21 percent) and buying clothing (19 percent).

Education is cited as a possible use by 17 percent of respondents, followed by accommodation (17 percent) and purchasing durable goods (13 percent).

These numbers are subject to substantial variation among ethnic groups. For example, 39 percent of black Africans declare that money is going to be used to buy food, while 29 percent of Chinese state they will be used to buy clothing, and again 24 percent of black Africans think money will be used for education expenses.

Overall four in five remitters expect their monies are going to make "a fair amount" (36 percent) or "a great deal" (45 percent) of difference back at home. There is however also a small but significant minority thinking that their remittances will do "little" (10 percent) or "nothing at all" (3 percent) to improve the conditions of the recipients.

A "typical" remitter in Britain is likely to be of Black African (34 percent), South Asian (31 percent) or Black Caribbean (12 percent) origin. Remitters are also slightly more likely to be male than female, with the notable exception of black African women who are more likely to remit than men in their same ethnic group. (END)

Article credit:

TerraViva Europe IPS, Thursday, 3 August 2006 which is solely responsible for the accuracy of its contents