Recently, I spoke at the local Rotary Club in the Oxnard area. I shared some data and a few insights, gained from my research on this phenomenon.
More than $466 billion were sent from countries around the world. This number, which the World Bank estimates to be a slight improvement over the previous year, is three times the size of international development aid.
In today’s world, where Western powers are becoming more inward looking and focused on their own national priorities, the appetite for helping others, who are poorer seems to be decreasing.
A lady at the event asked me “Isn’t this a net negative cash flow from the US?” referring to remittances flow from the US.
Perhaps so. But isn’t an entire chain of Americans benefiting from the work of these migrants? Many migrants are creating new businesses, contributing to the economy, paying taxes and only THEN, are they sending money back to the countries of their origin. Even in this process, an entire chain of people are making money off these remittances – the banks, the money transfer companies involved and others who are in this business.
Besides, the goodwill that the US earns, by virtue of these migrants being able to live, work and improve the lives of those across the border is incalculable. The word I was thinking of was ‘Soft power.’
Remittances are indeed a form of soft-power for the US.