TEPSA has coordinated an in-depth analysis requested by DROI Subcommittee of the European Parliament. The briefing was authored by Iliana Olivié, a Senior Analyst at the Elcano Royal Institute in Spain, and María Santillán O’Shea, a Research Assistant at the Elcano Royal Institute in Spain. The briefing is entitled “The role of remittances in promoting sustainable development”.
International remittance flows have proven their resilience through the COVID-19 pandemic-induced economic crisis in spite of initial expectations forecasting their decline and associated devastating consequences for development in recipient communities and countries. This calls for some reflection on the nature and behaviour of these flows, with a particular focus on aspects that might explain their countercyclical behaviour and distinctive patterns. Context-appropriate policies are required to leverage the development impact of each remittance corridor, in terms of: location; transfer channels; sender and recipient profiles; and use by recipients. Thought should also be given to the impact of: poverty reduction; protection against shocks; and increased ability to invest in human and physical capital. Above all, a holistic vision must be maintained to allow for a complete understanding of this complex phenomenon. Political actions for strengthening the role of remittances on developmenthave so far mostly focused on reducing the costs of sending remittances through formal channels, but the overall landscape of responses is still fragmented, insufficiently developed and facing significant challenges.