The win-win calculus of global family remittances

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The UN estimates there are more than 200 million migrants around the world who send money home, supporting more than 800 million family members. (AFP)
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Updated 15 June 2019
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The win-win calculus of global family remittances

  • Migrant workers form the backbone of an industry projected to keep growing
  • India, China, Mexico, the Philippines and Egypt were the biggest remittance recipients in 2018

DUBAI: Irish Basco remembers all the occasions that her father was not around to attend; anniversaries, family dinners, graduation ceremonies. Her father moved to Saudi Arabia 20 years ago when she was seven years old. At the time, the family was growing; working in the Philippines would not have been enough to meet its growing expenses. The solution was to find a job abroad and send money home regularly.
So when Basco’s father packed his bags and flew to the Middle East with a heavy heart, he left behind his wife and three young children who had no idea of the adjustments they would have to go through in the years ahead.
As the world prepares to mark International Day of Family Remittances on June 16, it recognizes the sacrifices made by families such as the Bascos and the difference remittances have made in the lives of those receiving them while playing a major role in the economies of many countries.
The Middle East, especially the Gulf region, is full of stories of migration, separation from loved ones, and remittances. The narrative is as much of economic success as it is of human resilience. Economic migrants form the backbone of a flourishing remittance industry that is only projected to grow.
The UN estimates there are more than 200 million migrants around the world who send money to their home countries, supporting more than 800 million family members, most of whom are in low- to middle-income countries (LMICs).
World Bank data show that in 2018 remittance flows to LMICs reached $529 billion, an increase of 9.6 percent compared to 2017 figures. This is expected to grow this year to $550 billion, making it larger than foreign direct investment and official development assistance flows. According to the bank: “In the coming decades, demographic forces, globalization and climate change will increase migration pressures both within and across borders.”
One expert says the movement of people across international boundaries for work is a natural occurrence in a world where skill sets differ from one country to another.
“There are defined borders in the world, but human beings are transferring from one place to another, so it’s an inherent consequence that they will have to send money to their homeland,” Mahmood Bangara, chairman of the Dubai chapter of the Institute of Chartered Accountants of India (ICAI), told Arab News.
Global remittances have a lasting impact on the lives of families. Basco, who graduated from a private university in the Philippines in 2013, said she could not have got her degree without her father’s support.
“We can’t deny that we experienced the good side of (migration). My father was able to provide something that the Philippines couldn’t. My father worked in a factory. He pursued different side jobs just to earn more,” she told Arab News by phone from Manila.
“If he hadn’t gone to Saudi Arabia, we wouldn’t have survived. I wouldn’t have been able to finish my education.”
But Basco said her family would never have wanted her father to leave the country “if there had been options other than migrating for work.” She said families are often pushed to the wall by circumstances.
Basco also said her father’s remittances allowed them to make a few investments.
“Expats remit money back home for a number of reasons; to support families, to earn higher rates of interest on local bank deposits, to invest in local real estate, stocks and other assets, to manage inheritance and build retirement funds,” Ambareen Musa, a UAE-based financial expert and CEO of the financial comparison website Souqalmal, told Arab News.
The benefits of remittances go beyond tending to the needs of families. For many developing countries, money derived from overseas transfers make up a significant chunk of their foreign-exchange earnings. “India, China, Mexico, Philippines and Egypt were the biggest remittance recipients in 2018 (in that order),” Musa said, citing World Bank data.
“India received over $78 billion in remittances in 2018, which made up 3 percent of the country’s GDP while the Philippines received over $33 billion, which formed a sizable 10 percent portion of GDP. These countries, like many others, rely on remittances to support their economic growth.”
The ICAI’s Bangara said remittances are a form of income for countries that can be used for domestic consumption.
“They can become savings in the bank. They can be used for certain purposes including investments and property purchases,” he said. “The money benefits the receiving countries by enabling them to meet project expenses. As long it is invested in some form, the money will be available for national development.”
Although the benefits of remittances are more apparent for the receiving countries, the sending countries are also reaping rewards through the services provided by foreign workers who choose to work there, to say nothing of the remittance business itself, which is now a multibillion-dollar, transnational industry.
“Nobody will employ overseas labor to incur losses. Nobody is forced to employ foreign labor,” Bangara said, adding that the remitting countries, such as those of the Gulf, benefit from labor migration in many ways.
As to whether the nationalization programs under way in several Gulf states will affect the prospects of migrant workers and consequently the remittance industry, Bangara said: “The elimination of foreign workforce is not going to happen in the near future.”
“It is true that there is a growing preference for employing domestic labor in almost all countries. But given the growth of these economies, they may continue to need the services of expatriate workers. Employment rates might be slightly affected, but there will be more projects coming up that will drive economic growth and require more manpower.”
It wasn’t easy growing up without a father figure, Basco said. No amount of money can replace a father’s presence, she said. “I feel that even if he finally decides to retire and come home, it will be difficult to get back all those moments,” she said. “But we will try.”


Israel demolishes Palestinian homes in Jerusalem area

Smoke rises from a Palestinian building after it was blown up by Israeli forces in the village of Sur Baher which sits on either side of the Israeli barrier in East Jerusalem and the Israeli-occupied West Bank July 22, 2019. (REUTERS)
Updated 23 July 2019
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Israel demolishes Palestinian homes in Jerusalem area

  • Dozens of Israeli police and military began sealing off at least four multi-story buildings in the Sur Baher area south of Jerusalem early Monday
  • Palestinians accuse Israel of using security as a pretext to force them out of the area

JERUSALEM: Israeli work crews on Monday began demolishing dozens of Palestinian homes on the outskirts of an east Jerusalem neighborhood, in one of the largest operations of its kind in years.
The demolitions capped a years-long legal battle over the buildings, constructed near the invisible line straddling the city and the occupied West Bank. Israel says the buildings were erected too close to its West Bank separation barrier. Residents say the buildings are on West Bank land, and the Palestinian Authority gave them construction permits.
In the wake of a recent Supreme Court decision clearing the way for the demolitions, Israeli work crews moved into the neighborhood overnight. Massive construction vehicles smashed through the roofs of several buildings, and large excavators were digging through the rubble.
Gilad Erdan, Israel’s minister of public security, said the Supreme Court ruled the illegal construction “constitutes a severe security threat and can provide cover to suicide bombers and other terrorists hiding among civilian population.”
He said that those who built houses along the separation barrier “took the law into their own hands.”
According to the United Nations, some 20 people already living in the buildings were being displaced, while 350 owners of properties that were under construction or not yet inhabited were also affected.
In a joint statement, senior UN humanitarian officials in the region expressed “sadness” over the demolitions and warned that many other homes could face “the same fate.”
“Israel’s policy of destroying Palestinian property is not compatible with its obligations under international humanitarian law,” they said.
Hussein Al-Sheikh, head of the civil affairs department of the Palestinians Authority, called Monday’s demolition a “crime” and demanded international intervention.
In Gaza, the territory’s Hamas rulers called for intensifying “resistance” to “the Zionist settlement project.”
“The increase in the occupation’s crimes against the residents of the holy city is a result of total American support,” said Hazem Qassem, a spokesman for the militant group.
Israel captured east Jerusalem and the West Bank in the 1967 Mideast war. The international community considers both areas to be occupied territory, and the Palestinians seek them as parts of a future independent state.
Israel annexed east Jerusalem and considers it part of its capital — a step that is not internationally recognized. But the competing claims to the territory have created myriad legal complexities.
Israel built its separation barrier in the early 2000s in a move it says was needed to prevent Palestinian suicide bombers from reaching Israel from the West Bank. The Palestinians say the structure is an illegal land grab because it juts into the West Bank in many places.
Sur Baher is one of those places. In negotiations with residents, Israel built the route of the structure in Sur Baher inside the West Bank to prevent dividing the village and disrupting life, according to court documents.
Residents, claiming it is impossible to get Israeli building permits in east Jerusalem, began building the apartment buildings in the West Bank part of the village with permission from the Palestinian Authority.
Early this decade, the Israeli military ordered the construction to stop, saying it could not permit high-rise buildings so close to the separation barrier.
Israel’s Supreme Court this month rejected residents’ final appeal, clearing the way for the demolitions.
According to Ir Amim, an Israeli advocacy group that promotes equality and coexistence in the city, Israel has stepped up demolitions of unauthorized Palestinian properties in east Jerusalem.
It said Israel demolished some 63 housing units in the first half of this year, compared to 37 during the same period last year. Palestinian residents of east Jerusalem say it is nearly impossible to get a building permit from Israeli authorities.