Economist Dilip Ratha gave a fascinating TED talk this month on the global impact of money sent by migrants to their native countries. It is hard to imagine how this subject gets overlooked when Ratha points out that the amount of money sent home by migrants in 2013 was three times that of development aid. Or that remittances make up 42% of Tajikistan’s GDP. Or that monthly remittances to Somalia exceed the average per capita income of $250 per year. What especially struck me was the following line by Ratha in his discussion of Somalia:
“Remittances are the lifeblood of Somalia. And yet, this is an example of the right hand giving a lot of aid, while the left hand is cutting the lifeblood to that economy, through regulations.”
Sometimes the most conventional method of helping the poor isn’t the most effective.