In the recent years, it has been found that when countries fall upon hard times their migrant community residing abroad rallies around their friends and family to help get them back on their feet, by sending money back home. Be it the global financial crisis of 2008, the Arab Spring in 2011, or the recent Nepal earthquake, remittances have played a significant role in shoring up economies from troubled times.
In the wake of Nepal earthquakes which led to the loss of over 8000 lives and 500,000 homes, the country saw its 2 million strong expatriate community, living in foreign countries, send money back home to provide relief to their loved ones who are affected. Estimates suggest that in the month of May, remittances to Nepal from the UAE alone grew by 25%, as the 300,000 strong Nepali community in the Gulf Nation rushed to support their country in its time of need. This is not an isolated situation, natural calamities and disasters always lead to a spike in remittances. Back in 2004 when Indonesia was hit by an earthquake and tsunami, international money transfers to the country surged. So is the case with the Philippines; in 2013 an Investment Bank named Nomura analyzed the trends of seven consecutive natural disasters that hit the country since 2004, and found that in the 3 months following a disaster, remittances to Philippines grew by an average of 3.7%.
But it’s not just natural disasters that pushes people towards money transfer. Economic crisis such as the one in 2008, also saw remittances remain resilient during tough times. Dilip Ratha, the Lead Economist and Manager of the Migration and Remittances unit of the World Bank, noted that remittances were buoyant despite fears that they would plummet as the developed economies got hit by the downturn. In one of his reports, he mentioned that in 2009, remittances fell by just 5%, only to quickly recover in 2010 matching the pre downturn levels.
The Middle East region, which has gone through its own share of political unrest, has also seen remittances remain stable during times of crisis. Despite the Arab Spring in 2011, the region saw an increase of 2.6% in the remittances it received. In 2014, Lebanon, which is now home to a number of Syrian refugees, also saw a 14% rise in remittances, which can be attributed to the loved ones trying to send money to their families seeking asylum in Lebanon.
While the act of sending a money transfer is a transaction, the feelings that motivate that transfer remain essentially human. It’s an attempt by migrants to help their people in need, to allay their pain, even when they are not physically present. “Dollars wrapped with care” is how Mr.Dilip Ratha termed remittances, and it couldn’t be more apt.