Please enable JavaScript.
Coggle requires JavaScript to display documents.
Remittances Core Arguments (Slows medium/ long run economic growth (Drives…
Remittances Core Arguments
Alleviates poverty
Securitisation has allowed governments to raise funds (Egypt & Brazil 15bn since 2000)
Does this make them a suitable source of collateral for borrowing
Can create incentive for family to work, in lag between family member migrating and finding work.
Often used to support families, feed children and keep them in education. Keys to reducing poverty
Pays for elderly care, creating openings in labour market.
Used to create businesses locally, boosting local economy.
Slows medium/ long run economic growth
Drives informal sector, living off remittances
They undermine rule of law in recipient country, as they are hard to track.
Reduces tax take
Neoclassical economists see this as a market imperfection. (Labour supply)
Receiving remittances means you are less likely to work in the formal sector.
Fuels inflation
Albania, money was invested in dead assets
Dependence
Albanian growth dependent on Greece's investment in infrastructure
Allows gap filling between import and export.
Tendency to start importing consumer goods rather than develop own industries.
Balance of payments gap.
Distribution
Government
Commercial remittances, shared with high government elite
Individual
Academics
Ivleves Arjorms 2016
James Korovilas