Today, June 16th, is the International Day of Family Remittances. Of all the days on the UN calendar dedicated to raising awareness on a variety of issues, this day is not the most famous.
The Day of Family Remittances does not enjoy wide recognition as do International Human Rights Day (Dec. 10), World Oceans Day (June 8) or most of the 100-plus days dedicated to causes deemed worthy of attention. When was the last time anyone heard about family remittances on the news?
However, the obscurity of the International Day of Family Remittances does not mean it is not important. Quite the opposite.
Remittances, hard-earned by migrant workers abroad, can become the engine of domestic economic growth. In many countries, remittances outpace the inflow of official development assistance.
According to the UN, remittance flows to low and middle-income countries reached US$466 billion in 2017.
That is more than three times the amount of official development assistance that reached those countries in the same year.
Remittances have the power to change the lives of people back home. In individual households, remittances provide the consistent income flow that allows family members to plan ahead. Many can think about starting a small business, or invest in education for themselves or their children. These possibilities mean social mobility, the fulfilment of many parents’ dreams that their children’s lives will be better than their own.
It is for all these reasons that family remittances are seen as a vehicle to help achieve the Sustainable Development Goals (SDGs) by 2030 “one family at a time.”
The SDGs set out a global blueprint for a more sustainable and inclusive future. Amid this agenda is Target 10.c calling for the transaction costs of migrant remittances to be brought down to less than 3 percent as a proportion of the total amount remitted.
It also calls to eliminate situations where the cost of remittances is above 5 percent. We are not there yet. Global figures show remittance costs to be between 6 percent for post offices and money transfer operators and 11 percent for commercial banks.
The case for lowering remittance costs is simple math. High transaction costs lower the total amount that reaches recipients, which enables them to invest in their food security, shelter, health, education and livelihoods. Savings take longer. Simply put, the ability of remittances to change lives and achieve the SDGs is reduced and delayed by high transaction costs.
For the more than 700,000 regular migrant workers in Taiwan, remittance is a regular event. For many, it justifies their prolonged separations from their families.
Yet the logistics of money transfers is not straightforward. Many migrant workers do not use banks due to language barriers and costly fees of NT$400 to NT$1,100. This is simply too high for the majority of migrant workers, whose remittances tend to be small amounts sent at regular intervals. Others use underground vendors who might offer convenience and lower costs than banks, but this might come at an increased risk of financial loss for the sender and money laundering for regulatory authorities.
In January last year, the Financial Supervisory Commission approved two financial technology apps to facilitate cross-border family remittances. The two apps lower charges to between NT$150 to NT$300 per transaction.
In approving these two apps, the commission said that it understands regular banking services are hard for migrant workers to access, and it hopes that advancements in fintech will provide a convenient and affordable solution for migrant remittances.
While this is a positive sign that the government is improving the situation of migrant workers in Taiwan, it cannot be the only step. Reducing transaction costs for migrant remittances to under 3 percent is only one of the many SDG targets that have a migration dimension. There is much to do beyond the singular issue of remittances.
The SDGs call for “leaving no one behind” and feature migrant workers in their global agenda, with six out of the 17 goals having migration-specific indicators.
They call for better protection of migrant workers under three broad themes: Ensuring that they have access to basic public services, such as healthcare and education; reducing inequalities experienced by migrants; and eliminating violence and discrimination against migrant workers.
Looking seriously at the costs of cross-border remittances, as the commission has done, is surely a positive step toward improving the situation of migrant workers in Taiwan.
The government must continue to do more to protect the rights of migrant workers in line with international standards of human and labor rights. Only then can migrant workers be integral to achieving the broad vision of human development as embodied by the SDGs.
Bonny Ling is an independent academic and expert on international human rights, development and migration.
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