A New Perspective on Immigration and Development: Think Remittances

Last week, I attended a conference, hosted by GRL Development, titled Immigration Policies and Development: New Perspectives. As I sleepily sipped my coffee, wondering if I could find an assets perspective in a topic seemingly removed from my field of work, one of the first morning presentations awoke me from my absentminded musings. It was by Lisa Schirch of 3D Security, and she was making the case for development as the foundation for security and immigration policy reform.

Nothing we haven’t already heard, of course. But while the tune that most of the presenters sang was "Our economy needs immigrants"– from the low-wage, unskilled worker, to the Sergey Brins and Jerry Yangs– Schirch’s "3D" approach to immigration and border security places development as the foundation of security "by fostering sustainable livelihoods that prevent conflicts over resources." The other two "Ds"– diplomacy and defense– rest upon that foundation, with defense as a last resort.

In a nation where over twice as many dollars are spent on a border wall between the U.S. and Mexico (a projected $49 billion) as are spent on development assistance abroad ($21.8 billion in 2007), what if, she asked, we began to think more humanely about slowing the flow of undocumented migrants to the U.S.? What if began to encourage more pilot projects in economic development, and supporting banking reform and community banking initiatives, so as to stem the flow of immigrants who migrate illegally?

While I agree with all of this, it’s surprising to note that in a conference that challenged us to think about immigration and development in new ways, the topic of remittances as an innovative way to improve the lives of migrants and their families, and to bring about stability in migrant-producing countries, wasn’t a more prominent topic.

Remittances already play a crucial economic role in many low-income countries. In Honduras, for example, remittances represented 26 percent of economy in 2006— no small amount. Annual remittance flows from the U.S. are greater than all Official Development Assistance around the world combined. In 2007, Latin American and Caribbean migrants alone sent home $66.5 billion— over three times the amount spent by the United States on development assistance the same year.

It seems only natural that more focus should be placed on figuring out how to better utilize the vast and relatively steady flow of remittances for development purposes. The time seems ripe, then, to create more innovative methods, policies, and programs for remittance-senders to allocate funds sent home, and to incentivize remittance recipients to utilize their money for asset-building and income-generating purposes, such as savings, investment, education and microenterprise. And if the development community is grappling with the notion of empowerment– creating environments for low-income individuals in developing countries to take advantage of their own inherent capabilities in order to lift themselves out of poverty– wouldn’t channeling the wealth generated by their family members residing in high-income countries pose a feasible solution?

Banco ADOPEM in the Dominican Republic, for example, has designed a product linking remittances to asset-building products for clients in recipient countries. The products place designated portions of remittances into savings accounts allocated for housing, school fees, and microenterprise. ADOPEM likewise offers a product for monthly payments on loans and health insurance. And because these products are generally geared towards women, they help to fight the traditions of gender inequality and discrimination that have inhibited women’s empowerment and household development.

The effects, both macro and micro, of programs or policies that encourage more effective and efficient uses of remittances are potentially numerous. At the micro level, owning an asset such as a home, establishing an income-generating enterprise or savings for one’s future often results in a sense of empowerment, future-orientation and hopefulness, so often lacking in households in developing nations. And if individuals are investing in themselves, their households and their communities, this could impact growth and stability of nation. And then, of course, there is the argument that once individuals and families have access to opportunities to invest in themselves and obtain a decent livelihood in their countries, the less willing they would be to uproot themselves from their homes and families.

There is no way to know at this point what effect policies or programs that encourage asset building through remittances will have on immigration patterns on the whole. However, it seems logical to me that any discussion on "new perspectives" on immigration, particularly if we’re talking about development, misses the boat if it fails to take a hard look at remittances.