Remittances now support one in every seven people worldwide, according to the UN’s International Organisation for Migration (IOM).

Defined as “private transfers of funds by an overseas worker to an individual in his or her country of origin,” these payments constitute $529 billion of inflows to low and middle-income families in 2018, supporting one in every seven people worldwide.

As such, they have become a defining feature of globalism and the reduction of poverty.

The UN’s International Organisation for Migration (IOM) has recognised this fact through the International Day of Family Remittances last Sunday with a high-level meeting of trade organisations, governments and migrants.  

The event, which has run since 2016, is to “raise awareness on the transformative impact that migrant remittances have across the Sustainable Development Goals—particularly poverty reduction and access to basic services at the household level.”

In nations such as the Philippines, remittances have become the nation’s principle inflow of foreign finance, outstripping the contribution of official development assistance (ODA) and foreign direct investment (FDI) combined by three times.

This has resulted in workers travelling overseas becoming cult heroes of developing economies, in some cases masking the hardships many are often exposed to as a result.

Ecuador’s Vice Minister for Human Mobility Santiago Chavez said he believed that the issue of remittances was at the very heart of the interconnection between human mobility and sustainable development.

The IOM agrees with him. In the description of their Sustainable Development Goals (SDGs), they cite remittances as directly benefitting other targets such as education, health care and development, household savings and investments, and therefore developing economies more broadly.

Elsewhere, the UN website cites remittances as crucial to at least seven of its 17 SDGs.

“It is not about the money being sent home, it is about the impact on people’s lives,” said President of the International Fund for Agricultural Development Gilbert Houngbo.

“The small amounts of $200 or $300 that each migrant sends home make up about 60 per cent of the family’s household income, and this makes an enormous difference in their lives and the communities in which they live,” he said.

Earlier this year, however, a UN fact-file stated that transfer costs currently take and average of 7 per cent from the earnings transferred.

It is here that the UN aims to have its principle impact in increasing the domestic gain of remittances and protecting workers from exploitation, by streamlining money transfer services.

This is to be achieved through policy and regulatory environments that enable competition, regulation and innovation, and consultancy with these organisations to ensure the financial inclusion of diverse users in terms of their gender and cultural requirements.

To this end, various UN organisations have also been engaging with developing governments, providing tailored technical support on remittances to governing bodies.