Remittances, the Rural Sector, and Policy Options in Latin America: Rural Finance Innovation Case Study

摘要

Development economics has long considered foreign savings as key to increasing a countrys capital-output ratio. Within that context, four factors were considered: foreign direct investment, official development assistance, foreign trade and the transfer of technology. However, in the past thirty years, significant changes in the global economy spurring migration flows have influenced economic growth and development thought. The relationship between development and migration or movement of people, and the resulting effects of economic ties between diasporas and home country economies (household and business sectors) are becoming more relevant for development policy. Specifically, the effect of the movement of people is gradually being considered a key factor in enabling economic growth. Labor and migration have become indicators of economic development. First, the share of local labor working in the global economy (maquila, nontraditional exports, other agricultural and industrial exports, technology), is one of the most significant sectors of a countrys economy. Second, the networks resulting from the prevailing ties of labor migration have contributed significantly to the integration of countries into the global economy. This latter point is important on various levels, including donations, investment (small and large), trade, tourism and unilateral transfers. For example, the mobilization of migrant (and their relatives) savings and investments at home (in the acquisition of land, property, or small businesses) are spurring economic growth in areas traditionally neglected by the private and public sectors, such as rural parts. Moreover, unilateral transfers, reflected primarily through family or worker remittances, and to a lesser extent through donations made by migrant associations, constitute key building blocks of economic growth and subsistence in many countries.