Remittance: The Third World's Saviour

Remittance is money that is earned sent by migrant workers to their home countries. Remittance is one of the biggest economic resources, especially for the third world and developing countries. World Bank even stated that remittance is the second largest income being earned by developing countries. This brings a very important impact towards the third world economies by helping them declining the poverty rate and increasing the citizen's welfare.

According to the World Bank lead economist, Dominique van der Mensbrugghe, survey has shown that remittance has succeeded in declining the number of poor households. He also cited that poverty rate in Bangladesh has declined for 6% and in Uganda for 11%, all thanks to remittance. Remittance even helped to decrease poverty rate for 50%.

World Bank stated in its 2006 report that remittance received by third world countries amountes for almost US$250 billion. It is an increase of 40% from last year's which approximately reached US$167 billion. Besides, remittance has reached millions of households, totaling approximately 10% of the total world's population. The driving force of this phenomenon is the approximately 150 million migrants out there who sent their money back home for US$300 billion every year, with US$100 to US$300 at a time. This also includes US$1.5 billion separate financial transactions. These numbers are predicted to increase every year. This shows that remittance brings a broad influence, especially for the remittance receivers (who are the migrant workers' family). The money is usually used for meeting the immediate needs, yet a significant portion is also used for savings, credit mobilization, as well as other forms of investments.

Below is the table showing the remittance received by some areas of the world:

It is so much true that migrant workers are heroes, saviours of their countries' economy. Not only that they have bravely worked in a very different environment, far away stretched from their family support and comfort zone, but also increased the welfare rate of their countrymen. Take India and China for example. Economy-wise, they were not as developed as they are now. However, their migrant workers have brought in so many opportunities and benefits to their fellow countrymen. India ranked the first in top remittance recipient countries in 2006-2007 which accounted for US$26.9 billion, and China ranked the second for US$22.52 billion. Remittance received by the Philippines in 2006 soared to US$14, 651 million; an increase of US$ 2.651 from its 2004's and accounted for 12.5% of its GDP in 2006. Mexico earned US$24,354 remittance in 2006. Vincente Fox, the incumbent president at that time even put migrants as the one of his best foreign affair policies

More and more countries hope that remittance will keep on increasing to support their economy. However, it does not mean that these countries did nothing to realize that. They are trying to improve their workers' quality and expertise. Bangladesh and the Philippines have trained their medical workers who will work overseas for 10 years onwards. And so has India with its IT experts and China with its engineers and health workers.

Prospect for migrant workers seems to have a bright future. United Nations even stated that 20 years onwards, European countries will need around 150 million foreign workers in order to overcome the labor shortage. This will also mean that third world's chance to actualize a better economy will be likely to remain.