Migrant Remittances in South Asia

Social, Economic and Political Implications

M. Rahman, T. Yong, A. Ullah, M. Rahman, T. Yong, A. Ullah

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137350800
• Topic: Politics & International Relations
• Subtopic: Trade & Tariffs
• Index: Politics & International Relations

This volume provides theoretical treatments of remittance on how its development potential is translated into reality. The authors meticulously delve into diverse mechanisms through which migrant communities remit, investigating how recipients engage in the development process in South Asia.

Part I
Remittance and Conceptual Issues

1

Understanding Remittances: Theoretical and Methodological Issues

Md Mizanur Rahman and Lian Kwen Fee

1.1 Introduction

Remittances are integral to migration because one of the basic motives for migrating is to remit a portion of earnings to the communities of origin, especially under conditions of temporary labour migration. Since temporary migrants typically leave their families behind, they have a strong bond with the countries of origin and maintain regular contact through remittances. In general, migrant remittances refer to ‘money and goods that are transmitted to households by migrant workers working outside of their origin countries’ (Adams 2009: 93). In 2013, remittance flows to developing countries through formal financial channels alone amounted to over US$ 400 billion (World Bank 2013: 1). Remittances to Asia comprise the highest regional total in the globe, and 8 of the top 20 remittance-receiving countries in the world are in Asia.¹ What is interesting about migrant remittances in Asia is that, while remittance flows to Latin America, the Caribbean and North Africa fell in 2009 due to recession, a notable exception was many Asian labour-sending countries where remittance volumes grew in the same year,² raising hopes for the development potential of remittances even at a time of global economic downturn.

In recent decades, remittance data have improved significantly because of the efforts of the World Bank and the International Monetary Fund in collaboration with national governments and central banks (Black and Skeldon 2009). There have also been many initiatives in making accessible both data and analyses of remittance flows such as the ‘Remittances Information Library’ funded by the Department for International Development (DFID-UK), e-resources such as ‘Remittance Prices Worldwide’ and ‘RemittancesGateway’, and many other online sources that provide information on remittance data and analysis globally. Despite recent improvements in data collection, datasets are mainly available in the developed countries, and the absence of high-quality data sources has been noted in many developing countries (Osili 2007). Nevertheless, one of the consequences of these developments in remittance information is that the importance of migrant remittances to development has become more obvious to academic and policy interests.

The emergence of a global remittance phenomenon that Rahel Kunz called the ‘global remittance trend’ (GRT) has given birth to some new trends. First, remittances have become a global object of knowledge; second, a variety of institutions have become involved in activities linking migration and remittances to development; and finally, new institutions and policies have been created at different levels in order to harness remittances for development (Kunz 2008, 2011: 1–3). Kunz reports that the conceptual apparatus of the GRT is made up of two main competing discourses: the ‘money-based’ and the ‘rights-based’. While the money-based discourse is adopted mainly by international financial institutions such as the World Bank and the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB), the rights-based discourse is adopted mainly by the International Labour Organization (ILO). The Global Commission on International Migration (GCIM) and the UN International Research and Training Institute for the Advancement of Women (UN-INSTRAW) fall between the money-based and the rights-based discourses (Kunz 2011: 48). In the money-based discourse, key issues are remittances as development tool; key actors are country of origin, and country of destination and migrants; notion of remittances is sum of money and force for good; notion of migrants is resources, development agents, entrepreneurs and customers; policies and objectives are associated with increasing development potential, linking remittances to finance, formalisation and win-win-win outcomes. In the rights-based discourse, the key issues are migrant worker rights and labour issues; key actors are migrants themselves; notion of remittances is workers’ earnings, process embedded in underlying social context; notion of migrants is human beings and workers with rights; policies and objectives are linked to equal distribution of benefits (Kunz 2011: 35–69).

In the last ten years, research on remittances has gathered momentum, covering a wide range of issues such as the formalisation of remittance transfers, the reduction of the transfer costs of remittances, the impacts of remittances on inequality, the use of remittances for investment or conspicuous consumption, the externalisation of remittance expenditure and the social impacts on the family (see Adams et al. 2009; Hammar et al. 1997; Ozden and Schiff 2005; Papademetriou and Martin 1991; Rahman and Yeoh 2008). Remittances are now increasingly seen as the ‘new development mantra’ (Kapur 2004), and hopes are pinned on temporary labour migrants sending financial remittances to their countries of origin (Glick Schiller and Faist 2009). However, in our view, the increased research attention given to remittances has not yet been adequately translated into corresponding publications on the associated conceptual and methodological challenges. Although much has been published on conceptual and methodological issues in migration research (see, inter alia, Fawcett and Arnold 1987; Findlay and Li 1999; Goldstein and Goldstein 1981; Liempt and Bilger 2009; Massey 1987), little has been written about the specific conceptual and methodological challenges involved in researching migrant remittances. There is a pressing need to identify such issues to guide remittance research.

Viewed micro-analytically, migration is the result of individual decisions influenced by the family or household, so is the decision to send remittances, and their amounts. Hence examining remittances in aggregate and macro terms diminishes the complexity of the transactions, and their sociological implications for migrants, households and communities.

A sound understanding of the micro-level processes is essential because they captures the lived experiences within macro-level flows of remittances and the resultant development outcomes. A remittance is more than a monetary transaction; it is a social transaction with far-reaching socio-economic consequences. However, it is the micro-level approach to remittance research that poses more conceptual and methodological challenges for field researchers. One of the most problematic areas is the question of scale – getting from individual motives and experiences to group or pooled investments and expenditures at the household level, and getting from household expenditures to village development. In this chapter, we highlight specific conceptual issues related to remittance research in Asia and how we should approach them methodologically.

We suggest that there are particular challenges in studying remittances in the developing world in general and Asia in particular. We identify and discuss eight issues, namely: forms of remittances; determinants of remittances; the role of gender in the remittance process; surveys – one-way or both-ways (one-way surveys indicate either origin or receiving country while both-way surveys indicate both origin and receiving country) – of remittances; mixed methods of quantitative and qualitative research; remittances as one-off or recurrent transactions; amount and use of remittances; and how to capture remittance-induced social change. Our reflections are based on several remittance studies that have been conducted in the Middle East and in South, Southeast and East Asian countries. These studies entailed extensive fieldwork in both sending and receiving countries involving migrants, migrant households and returnees. Several surveys were carried out on male and female workers in host countries and their households in home countries. In addition to surveys, individual in-depth and focus-group interviews with migrants and their family members were a rich source of information. Apart from remitters and recipients, key information also comes from remittance service providers in receiving and sending countries. The subsequent sections address each of the eight issues identified.

1.2 Forms of remittances

Over the last few decades, different forms of remittance transfer have been identified and expanded, but the category of economic remittances dominates the literature. Economic remittances generally refer to cash flows from migrants’ destination country to their home country. Two forms of economic remittance are broadly referred to in the literature: remittances in cash and in kind (e.g. goods brought by migrant workers). Another popular typology of remittances is family and collective remittances (Goldring 2004). Family remittances refer to remittance transfers from individual migrant workers to their families back home. Collective remittances point to money raised by a group that is used to benefit a group or a community with which it is affiliated in the country of origin. Based on the use of remittances, Durand offers a threefold classification of economic remittances: remittances as wages or salary, remittances as investment and remittances as capital (Durand 1994, cited in Goldring 2004). Mostly, these typologies of remittances have been developed in the context of a more permanent form of migration involving the North–South remittance corridors.

In the Asian migration literature, the widely used term for remittances is worker/migrant remittances (Asian Development Bank 2006). This refers to monetary flows from migrant workers to their households in the countries of origin. We also note another category of remittances which is fairly common among Afghan, Palestinian and Myanmar refugees – refugee remittances (Isotalo 2009). Both migrant and refugee remittances fall in the category of family remittances. There is hardly any reference to collective remittances in Asia, although they exist in varying degrees. For instance, an important category of collective remittances that demands scholarly attention is relief remittances – flows of cash from migrant workers to the people of a particular area which has been affected by a natural disaster. For instance, Sri Lankan migrants in South Korea collected cash to remit to Tsunami-affected areas in 2005; Bangladeshi migrants in South Korea and Japan contributed to the areas affected by the cyclone Sidor in Bangladesh in 2007 and Burmese migrants from Singapore, Malaysia and Thailand contributed to the cyclone Nargis-affected areas in Myanmar in 2008. The most recent example is the contribution of Pakistanis from the Middle East and other parts of the world to the flood-affected regions in Pakistan (August 2010). There is no doubt that family remittances, which are channelled directly to the families left behind, usually for basic household needs and meagre savings, are different from collective remittances in their level and breadth of development outcomes.

While the economic conception of remittances continues to dominate research, the term ‘remittance’ has been expanded to embrace the non-economic dimension since the 1990s. One of the sociologically important contributions to the field is the coining of the term social remittances by Peggy Levitt (1998, 2001). Levitt proposed the term to point to the fact that, in addition to money, migrants export ideas and behaviours back to their sending communities. She observed four types of social remittance – norms, practices, identities and social capital (Levitt 2001). Recently, in line with the categorization of economic remittances into individual and collective economic remittances (Goldring 2004), Levitt and Lamba-Nieves (2011) have introduced individual and collective social remittances to differentiate social remittances that are exchanged and deployed by individuals from those that circulate and are harnessed in collective, organizational settings, respectively.

Levitt and Lamba-Nieves (2011) have also introduced two terms to illustrate the development potential of social remittances for the sending areas: scale up and scale out. These authors argue that social remittances can scale up from local-level impacts to effect regional and national change, and scale out to affect other domains of practice such as religion and economics. The coining of the term ‘social remittances’ and subsequent extensions to individual and collective social remittances offer analytical scope for explaining the sociological aspects of remittances and their impact on societies. Apart from the notion of ‘social remittance’ there are also other references to non-economic remittances such as technical or technological remittances (Nichols 2002), which emphasise the importance of skills and technology brought back by returning migrants, and political remittances, which focus on political identities and ideologies, including demands and practices associated with migration (Fitzgerald 2000; Smith 1998). The significance of the development of typologies of remittances is that each type of remittance has its own characteristic features, and so there is a need for particular methodological approaches in tracking them.

1.3 Determinants of remittances

In identifying the determinants of remittances, it is essential to relate the decision to remit to the motives for migration, an issue largely ignored in the early literature. This is particularly important in the context of labour migration because the migration decision is usually a well-defined strategy to minimise risks and maximise benefits for individual migrants and their families (Stark 1991). Theoretically, the ‘new economics of migration’ integrates migration decision-making with migrant remi...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures
• List of Tables
• Preface
• Acknowledgements
• Notes on Contributors
• List of Acronyms
• Migrant Remittances in South Asia: An Introduction: Md Mizanur Rahman, Tan Tai Yong and AKM Ahsan Ullah
• Part I Remittance and Conceptual Issues
• Part II Remittance Transfer Systems
• Part III Implications of Remittances in South Asia
• Index