As a by-product of globalization, with the national borders wide open for migration, many people have migrated to foreign countries as seasonal workers, international students and permanent citizens. However, their emotional ties with their home country and families stay forever. Thus, migration has a direct impact on the rise of international remittances across the globe.
Here we discuss the economic effects of international money transfer and their role in development. Studies show remittances provide a key source of finance for some of the poorest countries in the global economy. It contributes more than 10% of GDP in 24 countries and more than 20% in 9 countries. It is noted that remittance inflow has a significant effect on poverty reduction in recipient countries. Why? Because remittances are not received by any national or state governments but go directly to the individuals and families who make optimum use of the money.
Now in terms of the country’s overall development, remittances become merit in terms of several other fields, such as:
- Increasing disposable income and spending
- Increasing tax revenues to governments
- Providing a credit on a country’s balance of payments
- Increasing liquidity of money
- Providing downward pressure on interest rates
- Benefitting local firms and encourages new businesses to start up
These are the direct impacts of remittances on the country's economy and development, there are yet other indirect effects, as well. Indirect effects come with how families and relatives spend the remittance money on better health, quality education, enhanced living conditions like infrastructure and transportation facilities etc. With the increase of family standards, the country’s economy gets affected in inexplicable ways.
The best online money transfer in Australia enables migrants in Australia to send money to their loved ones any time of the year. Thus giving an opportunity to the migrants to contribute to the development of their home country.
