Migrants struggle to maintain cashflow to home
Published 19/01/2013 | 05:00
For developing countries, the money sent home by emigrants is often a vital financial lifeline. It's money that can spell the difference between poverty and being able to put meals on a table or providing for an education.
It wasn't so long ago that Irish emigrants did the exact same thing, sending money home to Ireland from the United States or the UK to shore up family coffers back home.
That all changed during the boom years. A surge in migration to Ireland saw a new wave of hard-working immigrants wire money home to countries from the Philippines to Pakistan, from Latvia to Liberia.
In 1999, immigrants based in Ireland sent home about $120.4m. By 2002 the figure had soared to nearly $588m. But with the economy still blasting ahead on the property bubble, there was more to come. In 2008, the amount of money being sent out of the country hit a peak of just under $2.8bn.
Then came economic collapse.
By 2011, the figure fell to $2.3bn – an 18pc decline on the 2008 level.
Last October, the Philippines' central bank said that while the total remittances received by the country from its vast foreign army of workers would rise 5pc to $20.1bn in 2012, the amount being sent from some countries had fallen. Unsurprisingly, Ireland is among the nations from where less money is flowing east.
The central bank noted that remittances had fallen from Ireland, Spain, Greece and Portugal in the first half of 2012.
"(The downtrend is) a result of the interlocking sovereign debt and banking crisis (but) higher remittances were registered in some countries in the non-euro area, notably the United Kingdom," said the central bank.
According to Ireland's 2011 census, there are about 11,000 Philippine nationals living in Ireland.
And it's money sent home to developing countries that has the biggest impact.
The World Bank says that officially recorded remittances to developing countries probably rose 6.5pc last year to $406bn, but acknowledges that the true size of remittance flows, including unrecorded flows through formal and informal channels, is believed to be "significantly larger".
"Increasingly harsh rhetoric and policies hostile towards migrants in many destination countries, especially Europe, however, could discourage the flow of migrants in the future and subsequently weaken remittance flows," it added.
Unsurprisingly, the US remains the single biggest global destination for emigrants and is also the world's largest sender of remittances.
In Europe, economic hardships are relatively quick to impact remittance flows. Poland, Romania and Bosnia-Herzegovina have been the major European recipients of remittances sent from countries such as the UK, Spain and Italy. But the amount of money being sent to them has fallen.
"At the outset of the crisis, migrants kept sending money home by cutting down their own expenses," explains the World Bank.
"However, as the crisis continues to take its toll, they may be forced to reduce the amount sent home.
"In fact, anecdotal evidences show that workers with free mobility within the eurozone, such as those from Romania and Poland, are returning home in larger numbers unlike workers from Africa or Latin America who prefer to stay for fear that they may not be able to return."
The importance of remittances to some countries is quite simply astounding. In the former Soviet republic of Tajikistan, a landlocked nation where per capita gross domestic product was just $2,100 in 2011, remittances account for a whopping 47pc of GDP.
About one million Tajikstanis work abroad, most of them in Russia, and send home money to support their families.
"Migrant workers are displaying tremendous resilience in the face of the continuing economic crisis in advanced countries," said Dilip Ratha, manager of the World Bank's Migration and Remittances Unit, recently.
"Their agility in finding alternate employment and cutting down on personal expenses has prevented large-scale return to their home countries."
What's more, tens of thousands of migrants to Ireland now weigh up just more than economic factors. The country, for better or worse, has become their home.