Sending Money And Ideas Home

Danish university journalist students, Peter Krogh Andersen and Jakob Sorgenfri Kjaer spent two weeks in Somaliland (Nov’07) doing research on ‘the global flow of remittances‘ which went towards completion of their university thesis. Peter and Jakob were kind enough to send us a brief s ummary in English of their thesis for Somaliland Times. Thesis was done in Danish.

By Peter Krogh Andersen and Jakob Sorgenfri

15 December 2007

“The human face of globalization.” In these words the global flow of remittances is explained. According to the UN agency International Fund of Agricultural Development (IFAD), 300 billion US dollars were sent from migrants in western countries to their relatives in developing countries in 2006. This amount is three times bigger than the Official Development Aid. The outflows from Denmark amounted to 1.8 billion US dollars. Despite the large sums, there is barely any political focus or media attention on the phenomenon.

Often a father, mother, brother or sister has left the rest of the poor family behind and now provides for the loved ones living thousands of kilometers away. The money is mostly spent on basic needs and constitutes a lifeline for people in the poorest parts of the world.

According to the World Bank, the amount of these remittances has doubled in just ten years. The explanation is the growing migration trend, and the communications revolution making it much easier to transfer money from A to B.

However, while the recipients in the third world benefit from the remittances, the senders often face difficulties in their host countries. Every month they have to do without a significant amount of their budget, while relatives and friends back home continue to ask for support. Scholars and integration advisers stress that the pressure is an economic and emotional burden for many immigrants in Denmark. They propose a tax relief scheme for remittances similar to the tax incentives provided for charitable donations that exist today. They believe the tax deduction would help integration. Such a tax relief system existed in Denmark until 1995, but is not being reinstalled. Danish politicians argue that private remittances and donations to charity NGO’s are not comparable.

Remittances are not only financial. There are other positive aspects of global migration for third world countries. While the international community discusses the consequences of the ‘brain drain’ from developing countries, places such as Somaliland in East Africa are benefiting from ‘brain gain’ – the so-called social remittances. The Somali Diaspora in western countries is not only sending money back, they are also transferring values and ideas adopted in their host countries. In a so-called non-state with a fragile democracy the Diaspora is crucial. Many ministers and parliamentarians are from abroad, and the Diaspora returnees are responsible for most of the new businesses and buildings. The United Nations Development Programme (UNDP) has initiated a job bank that brings in qualified workers to the public sector. UNDP sees great potential in the returnees, and the idea is spreading to countries like DR Congo, Zimbabwe and Sudan with similar large Diasporas. But one of the biggest challenges for profiting from the social remittances is time. The Minister of Planning in Somaliland fears that the children of the Somali refugees will adapt to their foreign countries and cut the links to Somaliland, and therefore not contribute in the same way as the Diaspora does today.

The third type of remittances is the collective one. In the developed countries the Diaspora collect used items from schools and hospitals and ship them to their home countries in order to build the education and health facilities. In Denmark and Sweden, a growing number of immigrants from especially Somalia and Iraq want to get involved in foreign development aid. In Denmark however, many immigrant NGO’s give up because of language problems and bureaucratic demands from the funding system. A shame, according to the professionals, as acknowledging and including immigrant communities in the fight against world poverty has tremendous potential. Both when it comes to transferring human and financial capital.

De bedste hilsener / Best regards

Peter Krogh Andersen & Jakob Sorgenfri Kjaer

Journalists

peter@krogh.net