The role of remittances in development

An editorial by The New York Times asserted that “remittances represent the largest and most direct poverty reduction program.” It noted a report by the Inter-American Development Bank, which says that Latin America will receive a record $45 billion of such funds this year. Of the amount, $10 billion “could be saved or invested,” as per estimates of development bankers, which could bring more resources that will help finance schooling or start small ventures, and consequently promote economic growth. But current practice in the region does not promote this scenario. The article recommended that bank officials and politicians “educate the poor about banking and . . offer them services.” It also called on the World Bank, the International Monetary Fund and the Group of 8 industrialized nations to place the issue of remittances on top of their agenda.

Source: Wiring Development (The New York Times)

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