The remittance industry, being an economic power, is a source of capital and financial support that affects millions of households across the world. Remittances play a significant role in the economies of different countries and the world economy, as a whole. How? By influencing their economic activities. Migrants conduct international money transfer for households’ maintenance expenditure or for investing in profitable ventures.
Remittance money is spent to fulfill varying levels of needs that directly and indirectly affect the economies.
- Larger portions of remittance money are spent on education, health and household consumption or in various forms of human capital formation.
- Investment of the remittances on real estate or physical capital with a profit motive.
- Remittance money generates employment opportunities and thereby influences the private consumption of the workers.
- Some proportion gets invested in livestock and business.
- Remittances are also used for repayment of debts, payment of wages to workers etc.
- Remittances fuel the degree of economic development (level of income per capita) and macroeconomic stability in their country of origin.
- Remittances influence macro activities, the money invested in productive activities directly contributes to output growth.
- Remittances reduce poverty and increase foreign currency reserves.
- Migrant remittance improves the standard of living of their family members and the country.
It is seen that remittance-receiving households and remittance-receiving countries tend to be better off with higher average income and assets than households and countries that do not receive remittances. Money is transferred from the richer to relatively poor households, mostly from well-settled children to their parents.
Remittance inflows have increased significantly in recent years and have become the major financial inflow in some developing countries, even surpassing foreign direct investment (FDI). The best online money transfer in Australia is facilitating these transfers across the borders to prosper the economy of the developing countries and the world economy in general. Let the money flow to the needy!
