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Each year there are billions of dollars worth of currency which are sent by migrant workers, back to their home nations. This form of international money transfer is most frequently sent back to some of the world’s poorest nations, and they have a hugely positive impact on those countries. The UN estimates that these remittances have a direct impact on the lives of 1 billion people around the world, which is one in every seven individuals on the planet. Understandably, the UN are looking to see an increase in these remittances, and here is why they are doubling down on their plan to see more money go to those in need.
Behind The Figures
As part of the UN’s 17 sustainable development goals for the world, there is a key focus on increasing the number of remittances. This plan was adopted in September 2015, and in its goal 10.c, there is a commitment that by 2030 it will ‘ reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent’. This is of course a commitment to increasing remittances through lower pricing.
Originally however the plan suggested that the sum of money which would be sent to developing countries between 2015 and 2030 would be $6.5 trillion. Currently these figures are lagging behind and this is why the UN is redoubling its efforts to boost remittance figures.
The Impacts of The Pandemic
There is absolutely no doubt that the pandemic has had a greatly negative impact on the remittance figures around the world. Current estimates suggest that remittances will decrease by $109 billion following the pandemic. Despite the need for more funds in developing nations, those migrant workers have found themselves out of jobs and struggling to make the money which they can use to support their families and communities. We do not yet know the full extent of the pandemic, but many at the UN are concerned when looking at similar crises such as 2008, when remittances plummeted by $500 billion worldwide.
Focus On The Individual
Rather than solely focus on the large numbers which detail remittance trends, the UN is also focusing on the per-person numbers. In order to reach its goals, the UN is relying on individuals sending between $200-300 per month, back home to their families in need.
The main reason why this is so crucial for the UN is the good that these remittances can do. Some 75% of all money sent back to developing nations is used to meet immediate needs. The remaining 25% is then able to be used for additional options, and it is within this 25% where communities and rural areas in particular can invest in the local economy to support lifting themselves out of poverty and financial hardship.
Remittances are critical for the continued development of so many areas of the world, and this is why the UN have made it a key feature of their Sustainable Development Goals.
