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Migration and Remittances: General Overview and Highlights of Research on Eritrea

Migration has long been characterized as a fundamental component of the human experience. According to the United Nations (UN), as well as other international organizations, migration is “the movement of a person or a group of persons, either across an international border, or within a State” (UN 2018).

The International Organization for Migration (IOM), one of the UN’s specialized agencies and the world’s leading inter-governmental organization in the field of migration, defines a migrant as “any person who is moving or has moved across an international border or within a State away from his/her habitual place of residence, regardless of the person’s legal status; whether the movement is voluntary or involuntary; what the causes for the movement are; or what the length of the stay is” (IOM 2018).

Today there are several hundred million international migrants around the world. In fact, more people than ever before live in a country other than the one in which they were born. However, it is important to note that rates of migrants as a share of the global population have remained mostly unchanged for more than five decades, even as global trade and investment flows have expanded exponentially during this time. For example, between 1960 and 2015, the share of migrants in the global population has fluctuated narrowly between 2.5 and 3.5 percent. According to analysts, migration will likely remain a fundamental feature of the world in the coming decades due to a number of factors, including globalization, climate change, continued income and opportunity gaps, differences in demographic profiles, and the rising aspirations of the world’s poor and vulnerable.

Migration is a complex issue and people migrate for a variety of reasons. For instance, large and persistent differences in wages across the globe are the main drivers of economic migration from low- to high-income countries. People may also move to join family (e.g. family reunification), or to study. Others move to escape conflict, persecution, terrorism, or human rights violations. As well, people may migrate in response to natural disasters or other environmental factors. In recent years, climate change has also been recognized as a significant push factor for migration.

Although migration was often solely characterized as a process uprooting persons from their home country and reintegrating them into a new society and culture, it has increasingly been understood that migrants do not sever their relationships and ties with their home country. Rather, they forge and sustain multiple linkages and exchanges with it, often in the form of remittances. Several types of remittances exist, including: technological remittances, characterized by the knowledge, skills, and technology that migrants bring back home with their return; political remittances, involving the changes in political identities, demands, perspectives, and practices nurtured by new political ideas and values of returning migrants into their homeland; and social remittances, which are the diffusion and circulation of different social norms, practices and ideas into migrant-sending and migrant-receiving areas.

Economic remittances, which have been the most researched category of remittances, basically refer to the transfer of money and goods from migrants to relatives or friends in the origin country. These remittances may be sent via various mechanisms or channels (such as commercial banks, money transfer operators , couriers , hawala, etc.) depending on the availability of services, preferences of remitters and recipients, and institutional environment.

According to data released by the World Bank, in 2017, global remittances reached $613 billion, with the top remittance recipients being India with $69 billion, China ($64 billion), the Philippines ($33 billion), and Mexico ($31 billion). In terms of Sub-Saharan Africa, remittances reached $38 billion, with the largest recipients being Nigeria ($21.9 billion), Senegal ($2.2 billion), and Ghana ($2.2 billion).

Migrants may send remittances due to a variety of motives, including altruism, to maintain ties to their families and communities, in exchange for favours or services (e.g. childcare or household tasks), or for self-interest, such as investment or future inheritances. Remittances may also be sent as repayment for loans or investments, or serve as a form of insurance by helping to diversify earnings risks. Of course, migrants often remit as a result of a combination of motives.

There is large body of work suggesting a close association between remittances and development. After foreign direct investment, remittances are the second largest source of external funding for developing countries. As well, research suggests that remittances could play a key role as a significant “anti-poverty force” because they tend to increase the incomes of households in the developing world. Evidence also suggests that remittances may help increase the level of investment in education and human capital. In addition to supporting greater human development outcomes across a number of areas, remittances may positively impact savings, investment, and economic growth.

However, many findings challenge these positive perspectives of remittances. Work has shown that many recipient households retain only a small share of remittances for productive investments. As well, studies have found that remittances are often spent on “status-oriented” or conspicuous consumption, and that the ways in which remittances are typically invested are “not necessarily productive” to the economy as a whole. Remittances may also contribute to a culture of dependency and reduce recipients’ motivation to work and, thus, slow down growth or contribute to significant inequalities.

While much is understood about remittances within different contexts around the world, there has been relatively little work conducted on the topic in relation to Eritrea. Accordingly, my soon to be released work, based on multi-year research involving interviews and focus group discussions with individuals and households across Eritrea, as well as discussions with institutions and government sources, helps broaden awareness and understanding of remittances in Eritrea.

Although unable to thoroughly review the project and its findings here, I can provide a quick recap of some of its interesting findings. In brief, my findings suggest that for Eritrea, a young, developing country, remittances constitute an important part of the economy and source of foreign exchange. As with the situation found in many other countries around the world and across the region, remittances are a source of income for many individuals and households in Eritrea. Remittances to Eritrea are mainly sent to family and relatives, while there is great variance and considerable disparity in terms of amounts and frequency of instances received. It is also notable that, through sending remittances, migrants fulfill important traditional and customary familial duties and expectations to support their immediate and extended families. Additionally, a common factor influencing the receipt of remittances is the general socio-political and economic status of Eritrean migrants abroad. Interestingly, it was also found that perceptions and views toward remittances are mixed, with both positive and negative perceptions being held and expressed by respondents.

Moving forward, more research should be conducted in order to further clarify and better understand this highly important issue.

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