The hidden force in global economics;Sending money home

There are 232 million International migrants in the world of course they also send money back to home
known as remittance. 413 billion dollars was the amount of remittances sent last year in 2013 by
migrants to the developing countries. Migrants from developing countries actually sent remittances
back to their respective developing countries that is three times the size of total development aid
money.

In the case of India they receive 72 billion dollar remittances which is larger than its it exports while in
Egypt remittances are three times the size of revenues from the Swiss Canal while in the case of
Tajikistan remittances are 42% of the GDP. In poor countries or conflict affected countries remittances
are lifeline as it is in Somalia. These flows has huge impact on economics and on the life of poor people,
remittances unlike private investment money they don't back at the first sign of trouble in the country
they actually act like an insurance. when the family is in trouble facing hard times remittances increase
they act like and insurance unlike development aid money that must go through official Agencies
through governments while remittances directly reach the poor reached the family and often with
business advice. Similarly in Nepal the share of poor people was 42% in 1995 while in 2005 that rate was
declined to 31% most of it or half of it is because of remittances from India. While in Mexico and Sri
Lanka the birth weight is higher among families that received remittances.

Migrant send money to home for funding education, health, daily consumption while they send more
remittances in a special occasions like weddings, surgeries. There are certain barriers to these flow of
remittance these four hundred billions of remittances foremost among them is the exorbitant cost of
sending money home. Money transfer company structure their fees to milk the poor they would say up
to $500 if you want to send we will charge you $30. The Global average cost of sending money is
8%which means sending hundred dollars the Family on the other side receive only $92. While sending
money to Africa the Costt is even higher 12% to send money within aferica the cost is even more higher
over 20% while sending money to Venezuela because of the because of the exchange controls you send
hundred dollars and you are lucky if the Family on the other side receives even $10 of course nobody
send money to Venezuela through official channels and what is more worse that many developing
countries actually having a blanket ban on sending money out of the country. Many rich nations also
have a blanket ban on sending money to specific countries.

so if all these are the cases then what could be the alternative cheaper options of sending money.
mpesa in Kenya enables people to send money and receive money at a fixed cost of only 60 cent per
transaction. US fed started a program with Mexico to enable money service businesses to send money
to Mexico for a fixed cost of only 67 cents per transaction and yet this fast cheaper better option cannot
be applied internationally because of the fare of money laundering even though there is a little data to
support any connection any significant connection between money laundering and these small
remittance transactions.

Many international banks are very of hosting bank accounts of money service businesses especially
those serving Somalia country where the per capita income is only $25 per year monthly remittance is
an average to Somalia is larger than that amount, remittances are the lifeblood of Somalia and yet this is
the example of the right hand giving a lot of head while the left hand is cutting the lifeblood to that
economy to regulations while in the village the only place where you can get money is through post
office most of the governments in the world have allowed their post offices to have exclusive
partnership with money transfer companies so if I have to send money to my father in the village I must
send money through that particular money transfer company even if the cost is high I cannot go to a
cheaper option. so what can International Organisation and social entrepreneurs can do better to
reduce the cost of sending money home.

1. Relax regulation on small remittances government must realise that small remittance is not money
laundering.

2. Government should abolish exclusive partnership between their post office and the money transfer
company in fact they should promote competition open up the partnership so that we will bring down
costs like we did like they did in the telecommunication industries.

https://www.ted.com/talks/dilip_ratha_the_hidden_force_in_global_economics_sending_money_hom
e?referrer=playlist-understanding_world_economics.
Rebuilding a broken nation:
According to author; he describe in this vedio the post conflict recovery, which was took place
after the end of cold war. The cost of war is manifest in the failure of conflict countries to make
progress in key areas of development. He also mention that how we might do post conflict
recovery better? According to him the post conflict recovery situation is not impressive,
because 40% of all the post conflict recoveries is retired back into conflict with in a decade.
Post conflict situation is rested on three principles, its politics that matter! Politics was the first
priority which helps in the political settlements and so on things related to it, after politics he
describe the role of Donners, a non-governmental organization NGOs to establish peace though
out the nations for this purpose they need a legitimate government in that region to directly
make relations with that nation without being harmed.
But the author criticized this; by saying that these are the conventional approaches; realistic
thought. Which deny the reality. There is no quick fix, not even a quick security fix for every
problem. According to him an election doesn’t make a legitimate government. What it does
produce a winner or a loser? Both! The reality is that we have to reversed the sequence,
because politics is not the first its last. He further says that politics is easier in the last, because
after years of stagnation and declining the mentality of politics is that, it’s a zero sum game.
Which doesn’t produce the productive politics. So, we have to shift our mentalities from zero
sum to positive sum, before we can get a productive politics, and our focused should be on
Security Council in order to promote human rights and justice, rebuilding the education system
and effective management of natural resources. He also said that after peace keeping missions
we also have to focus on the reconstruction; which would help us in getting jobs in order to
maintain stability in the society. And a society will be remain safe from many problems if we
provide the fundamental necessities first such as health, education, and food. Because in the
post conflict situation there were no reconstruction only deconstruction happen. According to
author the post conflict government was in short of money, because of the bad politician who
captured the money without using it for the welfare of the nation, what they did is to snatch
short term good policies, although those short term policies were benefited in short term, but
in long term the effect of those policies was horrible.
My analysis about the author’s arguments is that if we focus on these critical objectives like
jobs, health, and good government, so we can progress faster than others. For this purpose first
we have to reconstruct the damaged property which would help us in getting jobs and security
that’s fulfilling our requirement of jobs which is good, other than this we have to focus on good
government which will squeezed out bad politicians
http://www.ted.com/talks/paul_collier_s_new_rules_for_rebuilding_a_broken_nation