Not too long ago, Donald Trump suggested he would force Mexico to pay for ‘The Wall’ by withholding the repatriation of Mexican workers’ remittances from the US. That would not be legal. And it may be impossible to enforce. But hypothetically speaking, if it happened, that would be one of the single biggest blows to Mexico.
Because people in developing countries thrive on remittances from their migrant workers. That repatriated money is their social security, their safety net, the emergency fund and pot of gold at the end of the rainbow.
According to the World Bank’s new Migration and Development Brief, developing countries got $131 billion in foreign aid in 2015.
And nearly four times as much – $431.6 billion – in remittances. India leads the world in remittances received — $69 billion in 2015.
Globally, remittances home have been rising year on year, the report said and the trend is expected to continue.
The money “is like a lifeline”, according to Dilip Ratha, who wrote the World Bank brief. Remittances largely go towards meeting basic needs, like food, but it also is invested in “child education and health, maternal health, older people’s health” — and in local businesses.
This is not to say that foreign aid is totally ineffectual but it does chime with some of the findings of AidData, a research lab based in Virginia, on the value and utility of aid. Click here for the report but if you don’t, here are some of its highlights:
** Aid from multilateral institutions such as the World Bank, gets better results, mostly because it is seen as less tied to a single donor country’s strategic or trade interests.
** Some small donor countries, such as Taiwan and Luxembourg, also get decent results, possibly because they stick to helping in areas that they know well
** The US, which spent $207 billion on development aid in seven years starting 2004, didn’t get the sort of results it should have
** Other big aid-daddies – Japan, Germany, France – were even more ineffectual