1. “Remittance Market:” A sector still trying to rebound from the after effects of the Global Pandemic?
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Much of the developing part of the globe relies heavily on remittances for financial support. Remittance flows into low-income and fragile states represent a lifeline that supports households as well as provides much-needed tax revenue. As of 2018, remittance flows to these countries reached $350 billion, surpassing foreign direct investment, portfolio investment, and foreign aid as the single most important source of income from abroad. According to the Migration and Development Brief, “remittance flows to low- and middle-income countries reached USD 540 billion in 2020, up 1.6% from 2019.” A drop in remittance flows heightened economic, fiscal, and social pressures on governments of these countries already struggling to cope even in normal times.
However, with the global world recovering from the aftereffects of the much loathed pandemic, the remittance flows to developing countries is expected to be balanced & grow at a steady rate.
2.” Uncalled migration:” Is remittance causing what we call a ‘Brain Drain?’
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Work is the main motivator. Migrant workers comprise two-thirds of all international migrants, and most move to high-income countries. The remittances migrants send home—$613 billion in 2017—provide financial flows and a stable source of income. But a significant con of remittance is that it might result in encouraging more labour migration because family members who receive remittances believe that they would be better off moving to developed countries & earning more money than living in their home country. In the long run, this can have a negative impact, commonly referred to as ‘brain drain’. As a result, the population composition has most people outside the labour market range or uneducated individuals.
However, compared to other forms of international financial transfers, remittances have a positive direct impact on recipients and should be encouraged by appropriate policies from the relevant governments.
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