0:00:00.924,0:00:05.432
I live in Washington, D.C.

0:00:05.432,0:00:12.949
But I grew up in Sindhekela, a village in Orissa,[br]in India.

0:00:12.949,0:00:16.973
My father was a government worker.

0:00:16.973,0:00:20.859
My mother could not read or write, but she

0:00:20.859,0:00:26.303
would say to me, "A king is worshiped only in his

0:00:26.303,0:00:32.931
own kingdom. A poet is respected everywhere."

0:00:32.931,0:00:36.275
So I wanted to be a poet when I grew up.

0:00:36.275,0:00:40.077
But I almost didn't go to college

0:00:40.077,0:00:44.999
until an aunt offered financial help.

0:00:44.999,0:00:47.254
I went to study in ___,

0:00:47.254,0:00:50.989
the largest town in the region,

0:00:50.989,0:00:57.988
where, already in college, I saw a[br]television for the first time.

0:00:57.988,0:01:00.268
I had dreams of going to the United States

0:01:00.268,0:01:03.088
for higher studies.

0:01:03.088,0:01:04.877
When the opportunity came,

0:01:04.877,0:01:07.212
I crossed two oceans, with borrowed money

0:01:07.212,0:01:14.215
for airfare, and only a 20 dollar bill in my pocket.

0:01:14.215,0:01:18.512
In the U.S., I worked in a research center,

0:01:18.512,0:01:22.947
part-time, while taking graduate classes in economics.

0:01:23.017,0:01:28.151
And with the little I earned, I would

0:01:28.151,0:01:30.768
finance myself and then I would send

0:01:30.768,0:01:35.266
money home to my brother and my father.

0:01:35.266,0:01:38.285
My story is not unique.

0:01:38.285,0:01:43.059
There are millions of people who migrate each year.

0:01:43.059,0:01:46.340
With the help of the family, they cross oceans,

0:01:46.340,0:01:53.325
they cross deserts, they cross rivers, they cross mountains.

0:01:53.325,0:01:57.773
They risk their lives to realize a dream,

0:01:57.773,0:02:00.556
and that dream is as simple as having a

0:02:00.556,0:02:03.867
decent job somewhere so they can send money home

0:02:03.867,0:02:05.657
and help the family,

0:02:05.657,0:02:09.954
which has helped them before.

0:02:09.954,0:02:15.366
There are 232 million international migrants in the world.

0:02:15.366,0:02:16.815
These are people who live in a country

0:02:16.815,0:02:19.471
other than their country of birth.

0:02:19.471,0:02:20.760
If there was a country made up of

0:02:20.760,0:02:22.809
only international migrants,

0:02:22.809,0:02:24.696
that would be larger in population

0:02:24.696,0:02:26.213
than Brazil.

0:02:26.213,0:02:28.228
That would be larger, in its size

0:02:28.228,0:02:31.260
of the economy, than France.

0:02:31.260,0:02:36.047
Some 180 million of them, from poor countries,

0:02:36.047,0:02:38.718
send money home regularly.

0:02:38.718,0:02:44.163
Those sums of money are called remittences.

0:02:44.163,0:02:48.000
Here is a fact that might surprise you:

0:02:48.000,0:02:52.733
413 billion dollars, 413 billion dollars

0:02:52.733,0:02:55.916
was the amount of remittences sent last year

0:02:55.916,0:02:58.902
by migrants to developing countries.

0:02:58.902,0:03:00.206
Migrants from developing countries,

0:03:00.206,0:03:02.230
money sent to developing countries--

0:03:02.230,0:03:04.680
413 billion dollars.

0:03:04.680,0:03:06.120
That's a remarkable number because

0:03:06.120,0:03:08.135
that is three times the size of

0:03:08.135,0:03:12.219
the total of development aid money.

0:03:12.219,0:03:15.262
And yet, you and I,

0:03:15.262,0:03:17.258
my colleagues in Washington,

0:03:17.258,0:03:18.765
we endlessly debate and

0:03:18.765,0:03:21.643
discuss about development aid,

0:03:21.643,0:03:25.832
while we ignore remittences as small change.

0:03:25.832,0:03:28.995
True, people send 200 dollars per month,

0:03:28.995,0:03:33.206
on average. But, repeated month after month,

0:03:33.206,0:03:35.044
by millions of people,

0:03:35.044,0:03:38.811
these sums of money add up to rivers [br]of foreign currency.

0:03:38.811,0:03:43.905
So, India last year received 72 billion dollars, larger than

0:03:43.905,0:03:46.571
its IT exports.

0:03:46.571,0:03:49.345
Egypt, in Egypt remittences are three times

0:03:49.345,0:03:52.917
the size of revenues from the Suez Canal.

0:03:52.917,0:03:56.729
In Tajikistan, remittences are forty-two percent of GDP.

0:03:56.729,0:04:00.058
In poorer countries, smaller countries, fragile countries, conflict

0:04:00.058,0:04:04.637
afflicted countries, remittences are a lifeline,

0:04:04.637,0:04:08.453
as in Somalia or in Haiti.

0:04:08.453,0:04:10.296
No wonder these flows have huge

0:04:10.296,0:04:15.046
impacts on economies and on poor people.

0:04:15.046,0:04:18.725
Remittences, unlike private investment money,

0:04:18.725,0:04:21.752
they don't flow back at the first

0:04:21.752,0:04:23.543
sign of trouble in the country.

0:04:23.543,0:04:26.758
They actually act like an insurance.

0:04:26.758,0:04:29.018
When the family is in trouble,

0:04:29.018,0:04:31.453
facing hardship, facing hard times,

0:04:31.453,0:04:34.060
remittences increase, they act like an insurance.

0:04:34.060,0:04:36.079
Migrants send more money then.

0:04:36.079,0:04:37.834
Unlike development aid money,

0:04:37.834,0:04:40.251
that must go through official agencies

0:04:40.251,0:04:43.368
and governments, remittences

0:04:43.368,0:04:44.993
directly reach the poor,

0:04:44.993,0:04:46.311
reach the family,

0:04:46.311,0:04:48.865
and often with business advice.

0:04:48.865,0:04:52.045
So, in Nepal, the share of poor

0:04:52.045,0:04:54.873
people was forty-two percent in 1995,

0:04:54.873,0:04:57.060
the share of poor people in the population.

0:04:57.060,0:05:00.662
By 2005, it declined later, at a

0:05:00.662,0:05:03.810
time of political crisis, economic crisis.

0:05:03.810,0:05:07.839
The share of poor people went down to thirty-one percent.

0:05:07.839,0:05:11.115
That decline in poverty, most of it,

0:05:11.115,0:05:13.374
about half of it, is believed to be

0:05:13.374,0:05:16.021
because of remittences from India,

0:05:16.021,0:05:18.290
a poor country.

0:05:18.290,0:05:22.353
In El Salvador, the school dropout

0:05:22.353,0:05:25.281
rate among children is lower

0:05:25.281,0:05:27.407
in families that receive remittences.

0:05:27.407,0:05:29.056
In Mexico and Sri Lanka,

0:05:29.056,0:05:34.015
the birth weight of children is higher

0:05:34.015,0:05:39.489
among families that receive remittences.

0:05:39.489,0:05:42.938
Remittences are dollars wrapped with care.

0:05:42.938,0:05:45.289
Migrants send money home for food,

0:05:45.289,0:05:48.011
for buying necessities, for building houses,

0:05:48.011,0:05:49.929
for funding education, for funding

0:05:49.929,0:05:52.918
healthcare for the elderly, for business

0:05:52.918,0:05:55.496
investments for friends and family.

0:05:55.496,0:05:57.255
Migrants send even more money home

0:05:57.255,0:06:00.333
for special occasions like a surgery

0:06:00.333,0:06:04.007
or a wedding. And migrants also send

0:06:04.007,0:06:06.987
money, perhaps far too many times,

0:06:06.987,0:06:09.003
for unexpected funerals that

0:06:09.003,0:06:13.721
they cannot attend.

0:06:13.721,0:06:16.239
Much as these flows do all that good,

0:06:16.239,0:06:17.477
there are barriers to these

0:06:17.477,0:06:18.987
flows of remittences, these

0:06:18.987,0:06:21.969
400 billion dollars of remittences.

0:06:21.969,0:06:24.000
Foremost among them is

0:06:24.000,0:06:27.796
the exorbitant costs of sending money home.

0:06:27.796,0:06:30.173
Money transfer companies structure

0:06:30.173,0:06:33.797
their fees to milk the poor.

0:06:33.797,0:06:36.569
They will say, "up to 500 dollars

0:06:36.569,0:06:38.244
that you want to send, we will charge you

0:06:38.244,0:06:40.788
30 dollars fixed."

0:06:40.788,0:06:43.904
If you are poor and have only 200 dollars to send,

0:06:43.904,0:06:47.316
you have to pay that 30 dollar fee.

0:06:47.316,0:06:49.981
The global average cost of sending

0:06:49.981,0:06:52.128
money is eight percent.

0:06:52.128,0:06:55.449
That means you send 100 dollars,

0:06:55.449,0:06:56.272
the family on the other side receives only

0:06:56.272,0:06:57.209
92 dollars.

0:06:57.209,0:06:58.333
To send money to Africa,

0:06:58.333,0:06:59.946
the cost is even higher:

0:06:59.946,0:07:01.312
twelve percent.

0:07:01.312,0:07:03.246
To send money within Africa,

0:07:03.246,0:07:04.890
the cost is even higher:

0:07:04.890,0:07:06.109
over twenty percent.

0:07:06.109,0:07:09.968
For example, sending money from Benin [br]to Nigeria.

0:07:09.968,0:07:13.990
And then there is the case of Venezuela, where,

0:07:13.990,0:07:15.651
because of exchange controls,

0:07:15.651,0:07:17.611
you send 100 dollars and you

0:07:17.611,0:07:19.579
are lucky if the family on the other side

0:07:19.579,0:07:23.149
receives even 10 dollars.

0:07:23.149,0:07:24.993
Of course, nobody sends money to Venezuela

0:07:24.993,0:07:27.586
through the official channel.

0:07:27.586,0:07:29.790
It all goes in suitcases.

0:07:29.790,0:07:31.870
Whereever costs are high,

0:07:31.870,0:07:34.383
money goes underground.

0:07:34.383,0:07:35.999
And what is worse,

0:07:35.999,0:07:38.460
many developing countries actually

0:07:38.460,0:07:40.777
have a blanket ban on sending money

0:07:40.777,0:07:42.530
out of the country.

0:07:42.530,0:07:44.477
Many rich nations also have a

0:07:44.477,0:07:49.743
blanket-ban on sending money [br]to specific countries.

0:07:49.743,0:07:52.114
So, is it that there are no options,

0:07:52.114,0:07:54.787
no better options to send money?

0:07:54.787,0:07:55.718
There are.

0:07:55.718,0:07:59.288
Mpesa in Kenya enables people to send money

0:07:59.288,0:08:01.419
and receive money at a fixed cost of only

0:08:01.419,0:08:04.816
60 cents per transaction.

0:08:04.816,0:08:06.702
U.S. Fed started a program with Mexico

0:08:06.932,0:08:09.301
to enable money service businesses

0:08:09.301,0:08:10.969
to send money to Mexico

0:08:10.969,0:08:16.232
for a fixed cost of only 67 cents per transaction.

0:08:16.232,0:08:19.157
And yet, these faster, cheaper, better options

0:08:19.157,0:08:21.794
can't be applied internationally

0:08:21.794,0:08:24.985
because of the fear of money laundering,

0:08:24.985,0:08:27.686
even though there is little data

0:08:27.686,0:08:30.211
to support any connection, any significant

0:08:30.211,0:08:32.123
connection between money laundering

0:08:32.123,0:08:37.563
and these small remittence transactions.

0:08:37.563,0:08:38.900
Many international banks now

0:08:38.900,0:08:42.179
are weary of hosting bank accounts of

0:08:42.179,0:08:45.370
money service businesses, especially

0:08:45.370,0:08:48.340
those serving Somalia.

0:08:48.340,0:08:50.347
Somalia, a country where the

0:08:50.347,0:08:57.491
part-time income is only 250 dollars per year, 250 dollars per year.

0:08:57.491,0:09:00.067
Monthly remittences, on average, to Somalia

0:09:00.067,0:09:02.219
is larger than that amount.

0:09:02.219,0:09:05.463
Remittences are the lifeblood of Somalia.

0:09:05.463,0:09:08.974
And yet, this is an example of the right

0:09:08.974,0:09:10.975
hand getting a lot of aid,

0:09:10.975,0:09:15.303
while the left is cutting the lifeblood

0:09:15.303,0:09:20.294
to that economy, through regulations.

0:09:20.294,0:09:25.182
Then there is the case of poor people[br]from villages, like me.

0:09:25.182,0:09:26.968
In the villages, the only place where you can

0:09:26.968,0:09:29.720
get money is through the Post Office.

0:09:29.720,0:09:31.673
Most of the governments in the world

0:09:31.673,0:09:34.729
have allowed their post offices to have

0:09:34.729,0:09:38.255
exclusive partnership with money transfer companies.

0:09:38.255,0:09:40.917
So, if I have to send money to my

0:09:40.917,0:09:43.470
father in the village, I must send money

0:09:43.470,0:09:46.053
through that particular money transfer company,

0:09:46.053,0:09:47.303
even if the cost is high.

0:09:47.303,0:09:51.565
I cannot go to a cheaper option.

0:09:51.565,0:09:53.634
This has to go.

0:09:53.634,0:09:55.585
So, what can international organizations,

0:09:55.585,0:09:57.602
social entrepreneurs do to reduce [the] cost

0:09:57.602,0:09:59.581
of sending money home?

0:09:59.581,0:10:06.019
First, relax regulations on small remittances[br]under 1000 dollars.

0:10:06.019,0:10:07.961
Governments should recognize that

0:10:07.961,0:10:12.618
small remittances are not money laundering.

0:10:12.618,0:10:17.057
Second, governments should abolish exclusive partnerships

0:10:17.057,0:10:19.821
between their post office and the money [br]transfer company.

0:10:19.821,0:10:21.230
For that matter, between the Post Office

0:10:21.230,0:10:23.687
and any national banking system that

0:10:23.687,0:10:26.597
has a large network that serves the poor.

0:10:26.597,0:10:29.951
In fact, they should promote competition,

0:10:29.951,0:10:32.890
open up the partnership so that

0:10:32.890,0:10:35.799
we will bring down costs like we did,

0:10:35.799,0:10:39.955
they did, in the telecommunications industry.

0:10:39.955,0:10:42.272
You have seen what has happened there.

0:10:42.272,0:10:47.075
Third, large non-profit philanthropic organizations

0:10:47.075,0:10:49.955
should create a remittance platform

0:10:49.955,0:10:51.148
on a non-profit basis.

0:10:51.148,0:10:52.520
They should create a non-profit

0:10:52.520,0:10:54.570
remittance platform to serve the money transfer

0:10:54.570,0:10:57.149
companies so that they can send money at a low cost,

0:10:57.149,0:11:00.230
while complying with all the complex

0:11:00.230,0:11:05.042
regulations all over the world.

0:11:05.042,0:11:06.364
The development community should

0:11:06.364,0:11:08.671
set a goal of reducing remittance costs

0:11:08.671,0:11:11.984
to one percent from the current eight percent.

0:11:11.984,0:11:14.444
If we reduce costs to one percent,

0:11:14.444,0:11:18.483
that would release a saving of 30 billion per year.

0:11:18.483,0:11:22.814
30 billion dollars, that's larger than the entire

0:11:22.814,0:11:25.943
bilateral aid budget going to Africa per year.

0:11:25.943,0:11:29.189
That is larger than, or almost similar to,

0:11:29.189,0:11:31.928
the total aid budget of the United States government,

0:11:31.928,0:11:35.024
the largest donor in the planet.

0:11:35.024,0:11:36.409
Actually, the saving would be larger

0:11:36.409,0:11:38.222
than 30 billion because remittance channels

0:11:38.222,0:11:44.279
are also used for aid, trade and investment purposes.

0:11:44.279,0:11:46.410
Another major impediment to the

0:11:46.410,0:11:48.864
flow of remittances reaching the family

0:11:48.864,0:11:51.439
is the large and exorbitant

0:11:51.439,0:11:54.757
and illegal cost of recruitment,

0:11:54.757,0:11:57.145
fees that migrants pay, migrant workers

0:11:57.145,0:12:00.769
pay to labor and ___ in the job.

0:12:00.769,0:12:04.015
I was in Dubai a few years ago.

0:12:04.015,0:12:06.560
I visited a camp for workers.

0:12:06.560,0:12:12.003
It was eight in the evening, dark, hot, humid.

0:12:12.003,0:12:13.595
Workers were coming back from

0:12:13.595,0:12:16.436
their grueling day of work,

0:12:16.436,0:12:18.000
and I struck a conversation

0:12:18.000,0:12:21.000
with a Bangledeshi construction worker.

0:12:21.000,0:12:23.719
He was preoccupied that he is sending

0:12:23.719,0:12:25.106
money home, he has been

0:12:25.106,0:12:28.066
sending money home for a few months now,

0:12:28.066,0:12:29.369
and the money is mostly going

0:12:29.369,0:12:32.311
to the recruitment agent, to the labor agent

0:12:32.311,0:12:34.064
who found him that job.

0:12:34.064,0:12:36.688
And in my mind, I could picture

0:12:36.688,0:12:38.789
the wife waiting for

0:12:38.789,0:12:40.725
the monthly remittence.

0:12:40.725,0:12:42.420
The remittence arrives.

0:12:42.420,0:12:44.049
She takes the money and hands

0:12:44.049,0:12:48.199
it over to the recruitment agent,

0:12:48.199,0:12:50.775
while the children are looking on.

0:12:50.775,0:12:54.125
This has to stop.

0:12:54.125,0:12:58.861
It is not only contraction workers from Bangledesh,

0:12:58.861,0:13:00.717
it is all the workers. There are millions of migrant

0:13:00.717,0:13:03.548
workers who suffer from this problem.

0:13:03.548,0:13:05.075
A construction worker from Bangledesh,

0:13:05.075,0:13:08.860
on an average, pays about 4000 dollars in recruitment fees

0:13:08.860,0:13:14.649
for a job that gives him only 2000 dollars[br]per year in income.

0:13:14.649,0:13:17.069
That means that for the two years or three years

0:13:17.069,0:13:20.452
of his life, he is basically sending money

0:13:20.452,0:13:22.056
for the recruitment fees.

0:13:22.056,0:13:25.589
The family doesn't get to see any of it.

0:13:25.589,0:13:28.620
It is not only Dubai, it is the dark

0:13:28.620,0:13:31.814
underbelly of every major city in the world.

0:13:31.814,0:13:34.102
It is not only Bangledeshi contraction workers,

0:13:34.102,0:13:36.127
it is workers from all over the world.

0:13:36.127,0:13:38.245
It is not only men.

0:13:38.245,0:13:40.190
Women are especially vulnerable to

0:13:40.190,0:13:43.728
recruitment malpractices.

0:13:43.728,0:13:48.052
One of the most exciting and newest

0:13:48.052,0:13:50.420
thing happening in the area of remittences

0:13:50.420,0:13:53.051
is how to mobilize, through innovation,

0:13:53.051,0:13:57.152
diaspora saving and diaspora giving.

0:13:57.152,0:13:58.535
Migrants send money home,

0:13:58.535,0:14:00.568
but they also save a large amount of

0:14:00.568,0:14:02.953
money where they live.

0:14:02.953,0:14:05.248
Annually, migrant savings are estimated

0:14:05.248,0:14:09.839
to be 500 billion dollars, 500 billion dollars.

0:14:09.839,0:14:11.847
Most of that money is parked in

0:14:11.847,0:14:15.792
bank deposits that give you zero percent interest rate.

0:14:15.792,0:14:18.844
If a country were to come and offer three percent

0:14:18.844,0:14:21.335
or four percent interest rate, and then say

0:14:21.335,0:14:23.709
that the money would be used for building schools,

0:14:23.709,0:14:27.154
roads, airports, train systems

0:14:27.154,0:14:28.966
in the country of origin, a lot

0:14:28.966,0:14:30.593
of migrants would be interested in

0:14:30.593,0:14:32.983
parting with their money because

0:14:32.983,0:14:34.968
its not only financial gains that

0:14:34.968,0:14:36.467
gives them an opportunity

0:14:36.467,0:14:42.169
to stay engaged with their country's development.

0:14:42.169,0:14:44.590
Remittence channels can be used

0:14:44.590,0:14:48.541
to sell these bonds to migrants

0:14:48.541,0:14:49.932
because when they come on

0:14:49.932,0:14:51.405
monthly basis to send remittences,

0:14:51.405,0:14:53.566
that's when you can actually sell[br]it to them.

0:14:53.566,0:14:55.019
You can also do the same

0:14:55.019,0:14:57.860
for mobilizing diaspora giving.

0:14:57.860,0:15:00.158
I would love to invest in a

0:15:00.158,0:15:02.538
bullet train system in India

0:15:02.538,0:15:05.830
and I would love to contribute to efforts

0:15:05.830,0:15:09.356
to fight Malaria in my village.

0:15:09.356,0:15:13.345
Remittences are a great way of

0:15:13.345,0:15:17.506
sharing prosperity between places

0:15:17.506,0:15:19.682
in a targeted way that benefits

0:15:19.682,0:15:22.668
those who need them most.

0:15:22.668,0:15:25.796
Remittences empower people.

0:15:25.796,0:15:28.904
We must do all we can to make[br]remittences,

0:15:28.904,0:15:29.999
and recruitment,

0:15:29.999,0:15:32.381
safer and cheaper.

0:15:32.381,0:15:35.192
And it can be done.

0:15:35.192,0:15:36.962
As for myself, I have been

0:15:36.962,0:15:40.982
away from India for two decades now.

0:15:40.982,0:15:43.565
My wife is a Venezuelan.

0:15:43.565,0:15:47.323
My children are Americans.

0:15:47.323,0:15:50.950
Increasingly, I feel like a global citizen.

0:15:50.950,0:15:53.190
And yet, I am growing nostalgic

0:15:53.190,0:15:56.502
about my country of birth.

0:15:56.502,0:16:01.738
I want to be in India and in the U.S. at the same time.

0:16:01.738,0:16:04.071
My parents are not there anymore.

0:16:04.071,0:16:07.543
My brothers and sisters have moved on.

0:16:07.543,0:16:09.597
There is no real urgency for me to send money home,

0:16:09.597,0:16:12.419
and yet, time to time,

0:16:12.419,0:16:15.070
I send money home to friends,

0:16:15.070,0:16:18.451
to relatives, to the village

0:16:18.451,0:16:20.517
to be there, to stay engaged--

0:16:20.517,0:16:22.495
that's part of my identity.

0:16:22.495,0:16:25.625
And, I'm still striving to be a poet

0:16:25.625,0:16:28.013
for the hardworking migrants

0:16:28.013,0:16:29.590
and their struggle to break free

0:16:29.590,0:16:31.098
from the cycle of poverty.

0:16:31.098,0:16:32.402
Thank you.

0:16:32.402,0:16:38.846
(Applause)