The hidden force in global economics: sending money home

I live in Washington, D.C.

But I grew up in Sindhekela, a village in Orissa
in India.

My father was a government worker.

My mother could not read or write, but she

would say to me, "A king is worshiped only in his

own kingdom. A poet is respected everywhere."

So I wanted to be a poet when I grew up.

But I almost didn't go to college

until an aunt offered financial help.

I went to study in ___,

the largest town in the region,

where, already in college, I saw a
television for the first time.

I had dreams of going to the United States

for higher studies.

When the opportunity came,

I crossed two oceans, with borrowed money

for airfare, and only a 20 dollar bill in my pocket.

In the U.S., I worked in a research center,

part-time, while taking graduate classes in economics

and with the little I earned, I would

finance myself and then I would send

money home to my brother and mother.

My story is not unique.

There are millions of people who migrate each year.

With the help of the family, they cross oceans,

they cross deserts, they cross rivers, they cross mountains.

They risk their lives to realize a dream,

that dream is as simple as having a

decent job so they can send money home

and help the family,

which has helped them before.

There are 232 million international migrants in the world.

These are people who live in a country

other than their country of birth.

If there was a country made up of

only international migrants,

that would be larger in population

than Brazil.

That would be larger in its size

of the economy than France.

Some 180 million of them, from poor countries,

send money home regularly.

Those sums of money are called remittences.

Here is a fact that might surprise you:

413 billion dollars, 413 billion dollars

was the amount of remittences sent last year

by migrants to developing countries.

Migrants from developing countries,

money sent to developing countries--

413 billion dollars.

That's a remarkable number

that is three times the size of

the total of development aid money.

And yet, you and I,

my colleagues in Washington,

we endlessly debate and

discuss about development aid

while we ignore remittences as small change.

True, people send 200 dollars per month

on average, but repeated month after month,

by millions of people,

sums of money add up to rivers
of foreign currency.

So, India last year received 72 billion dollars, larger than

its IT exports.

Egypt, in Egypt remittences are three times

the size of revenues from the Suez Canal.

In Tajikistan, remittences are forty-two percent of GDP.

In poorer countries, smaller countries, conflict

afflicted countries, remittences are a lifeline,

as in Somalia or in Haiti.

No wonder these flows have huge

impacts on economies and on poor people.

Remittences, unlike private investment money,

they don't flow back at the first

sign of trouble in the country.

They actually act like an insurance.

When the family is in trouble,

facing hardship, facing hard times,

remittences increase, they act like an insurance.

Migrants send more money then.