Defining poverty in the context of its relationship to migration is not only complex but also elusive. This is evident by the multiple definitions given by the United Nations Development Programme (UNDP, 1998). There are atleast five dimensions of poverty documented by it. They are:
- Human poverty, reflected through the lack of essential human capabilities as literacy or good health.
- Income Poverty expressed in terms of not earning even minimum income that would meet basic needs,
- Extreme poverty denoting destitution resulting in not even the food needs are met.
- Over all poverty, which is also used, in conjunction with relative poverty indicating a condition of varying levels of its existence across the countries measured in terms of per capita income. It is a dynamic concept.
- Absolute poverty is defined by a fixed standard of income to denote people falling below that income being considered as ‘poverty line’. For instance, the international one dollar a day income defines the line to measure poverty across nations.
Apart from the varying dimensions mentioned above, it is also important to note that there are number of other factors as demographic setting, socio-cultural conditions prevalent etc, besides the economic setting, which influence migration. In the context of our work, we would adopt the economic setting, which would best fit the relevance to the chosen topic. By this we mean, GNP per capita, real GDP per capita, and human development index found in Human Development Reports (HDR).
The economic disparity prevalent in the Gross National Income (GNI) between the developed and developing countries acts as a major driver of migration from the latter to the former. The extent of variation could be seen in the figures furnished by the World Bank (2008). It has computed $975 per annum or less as the GNI (classified as low income) for the developing countries and $11906 or more per annum (classified as high income) for the developed countries and the differential in this drives the labour force of the developing world into the developed ones. However, we have to understand the cap that the entire migrant workforce would not get to earn the same high level of incomes as the pay varies depending upon the education and skills (Kurbusi, 2006). Nevertheless, even after accounting for such constraints, it is a fact that still the developed world offers higher income prospects vis-à-vis the opportunities available within their home country. Many a workforce from the developing countries is willing to forego certain other non-material comforts to seize those opportunities.
It has been seen in the context of atleast Mexico that even in respect of the poorest among the poor workforce have a tendency to migrate disproving the argument that people suffering from ‘absolute poverty’ are precluded from migrating and deriving the advantage of earning a relatively higher income. Mckenzie et al, (2007) traces this to the ‘network effect’ operating with Mexicans who draw their counterparts into U.S. through organised and unorganised channels. The remittances sent back by such workforce to the home go in meeting the basic needs of their kith and kin and to that extent it can be treated to as an alleviator of poverty.
When considered at an individual level, the extent of alleviation may not be significantly visible but when the effect on the community aggregated together could be substantial. Adams and Page (2001) have demonstrated this in a review of economic data from 71 developing countries with an objective to determine the effect of migratory remittances on the community as a whole. With every 10% increase in the number of workers migrating, the incidence of poverty in the guest country declined by 2.1%. They also found out with every 10% increase in the level of remittances, there is a decrease of 3.5% in the levels of people living in poverty. Besides the direct effect such a measure brings in, there is an indirect effect of the dependants in the home country utilising their time in productive efforts. This brings in a twin advantage of the reduction in the poverty and generation of additional incomes by the dependants, which gets supplemented to the remittances, which further helps in the improvement of quality of living. The economy at a macro level also benefits with the addition of resources which otherwise would not have been available.
Todaro (1969) had advanced the structural theory of migration by which he had meant that structural circumstances as rural poverty, unemployment and under employment determine the emigrational behaviour of the population. They perceive the needs not only in terms of fulfilling the day-to-day needs but also in terms of acquiring assets which prompt them to choose the route of migration to fulfil their objectives. For instance, the migrants of Basotho had adopted the strategy of combing remittances along with deferred pay to achieve these objectives which has been found alleviate levels of poverty. This has also been proved by a contra study conducted by Sechaba Consultants (1997). They found between 1987 and 1992 a fall in the remittances by 17% had resulted in a steep decline in the Gross National Income (GNI).
In an already surcharged environment of deep rooted poverty, lack of employment opportunities aggravate it further compelling the population to seek livelihood in a country other than theirs. Even hostile conditions and strict immigration rules prevalent in the host countries do not deter this aggrieved population to emigrate through ill legal and clandestine methods.
It is equally necessary for us to mention the contra opinion held by some academicians and researchers who if not totally dispute the theory that migration tends to ameliorate poverty, have voiced cautions in such acceptance of such a view in toto. For instance, according to Dodson (1998) “The impact of migration is difficult to assess in any absolute or objective sense, especially by those actually involved. Not only does it touch on virtually every aspect of life but it presents on combination of costs and benefits that are not easy to disentangle…How, for example, does one calculate the benefit of economic gains obtained at the social cost of disrupted family lives?” Migration deprives the availability of young people who can build the development of the areas to which they belong. In countries where agriculture is the predominant source of occupation, it results in the shortage of farm labour. Besides, it causes disruption in the hitherto cohesiveness witnessed within the family. It results in social tensions both at household and community levels. The youth are also deprived of acquiring knowledge through education, which adversely affects the human resource development of labour-exporting countries both at the micro and macro levels. It is not unusual to see villages without males as the head of the households and the inability of the non-empowered illiterate women to handle social responsibilities resulting in breaking out of families. The income earning opportunities of these women (say rearing of milch animals) get dissipated due to the non-availability of male households. It leads to a tendency in them also to migrate out, if not to another country, atleast from rural to urban areas.
Migration of unskilled labour has further either caused a decline or stagnation in the agricultural production which in turn accentuates poverty instead of mitigating it. For instance, it was found in Lesotho, the purchases of cattle out of remittances with a view to earn further income instead resulted in the over grazing on their lands and soil erosion. As a result, it perpetuated poverty instead of generating wealth (Russell et al, 1990).
It has also been contended that migration engenders a vicious circle of mutual support between the capitalist sector and the rural sector. The migrants are left between the devil and deep sea as neither the rural employment offering them adequate wages to take care of themselves and their families nor the remuneration offered by the host countries sufficient to meet the demands of the family at home besides meeting their own needs (de Vletter et al, 1981).
The boom and bust in the real estate sector where the majority of the unskilled labour tends to look for employment overseas has left them more distraught than comfortable. They tend to become the victims of unfair practices followed by the employers of the host countries by way of not paying them the salary and virtually keeping them in bond by taking custody of travel documents. Some of these workers, can neither seek alternate employment nor in a position to return to the home country due to the lack of money. In such cases, it results in the starvation of not only them but also the entire family in the home country.
Conclusions:
We have surveyed in this chapter the literature relevant to the Paper. Our survey shows the indisputability of the fact that the literature is dominated by the arguments favouring the views that migration tends to contribute to the development in countries of origin.
We have documented some of the dissenting voices raised by some academicians, especially on the unhappiness of the single women households in being left on the lurch because of the migration of the male heads. In this context, it may be surprising to note the survey results referred to by Dodson (1998), wherein such females also perceived in a positive manner about the benefits that migration bring on them. Of course, such survey results are subject to the caveat of not capable of being taken as representative due to the lack of knowledge of the respondents of the perceptions of communities and countries. In any case, the literature review strongly support the positive relationship between the result of migration taking place on account of poverty and remittances having an effect of mitigating it in the lives of the dependant households in the home country.
Chapter 3: A detailed analysis with reference to Mexico:
In this Chapter, we have endeavoured to provide answer to the research question by taking the case of Mexico. We have again recapitulated very briefly the reasons for the choice of Mexico as our case study. Mexico provides an ideal ground for testing varying hypothesis relating to migration, remittances, poverty etc because of her closeness to the U.S.A. thus satisfying major condition of primarily a rurally poor economy providing the opportunities for its households to migrate to a highly developed and relatively open economy with least costs. The availability of data, especially in the form of surveys updated from time to time makes it relatively less time consuming for the researchers to access it and concentrate more on the analysis. The analysis by applying the headcount method has reasonable acceptance as similar surveys held elsewhere has produced verifiable results on the outcomes concerning the hypothesis. Moreover, it takes into account both the incidence and severity of poverty when measuring the impact of remittances. For instance, Adams (1986) found that international remittances had a favourable effect on poverty in a small sample of households in the rural Egypt using the headcount methods. In a relatively larger study by using a sample size of 2400 Municipalities, Lopez Cordova (2004) came out with the results that a higher prevalence of remittances resulted in the lowering the incidence of poverty.
The choice of Mexico is further justified by the fact that over the years, rural Mexico has been experiencing a substantial outflow of rural labour to the United States. This is evidenced in the statistics that between 1990 and 2002, the share of Mexico’s rural population working in the United States rose from 7 to 14% (Mora et al, 2004). The data chosen for the current analysis is broader in nature, which has been made possible because of the enlarged data provided in the National Rural Household Survey (Encuesta Nacional a Hogares Rurales de Mexico, in short, EHRUM). The survey has collected statistics on assets, socio-demographic characteristics, production, income sources as well as migration from a representative sample of national rural households. It was carried out in the months of January and February in the year 2003. A total number of 1782 households from 14 States were chosen for it. Mexico’s national Information and Census Office (INEGI) had designed the sampling framework and while designing it, it had taken into account statistically reliable characterisation of Mexico’s population residing in the rural areas. The maximum size of the chosen hamlets did not exceed 2500 households per hamlet and hamlets with fewer than 500 households were left out taking into account the cost and continuity factors. Thus, the choice of the data from this survey fulfils the primary condition that the majority of the households should hail from the rural areas as in this survey the Mexican Census Office has reckoned that 80% of the households hail from rural areas.
The country was divided into five regions, viz, Center, South-South East, West-Center, Northwest and Northeast. This was done to ensure the representativeness of the survey both from national and regional angles. The headcount method was used for the analysis.
Table 1: Migration Summary Statistics for Rural Mexico by Region
Source: ENHRUM, 2003, Adapted to our requirements
From Table 1, it can be inferred that a little over 16% had a family member migrated to the United States at the time when the survey was initiated in 2002. It should be noted that many households had more than one member living and working in the U.S.A. with the highest being 9. The average household had 0.35 U.S. migrants. The figures further bring out the sharp differences in the migrations experiences across the regions. The West-Central region has been and still has the highest participation rates in the migration and hence most international migration experience. Close to 28% of all the households in this region is represented atleast by one family member in the U.S., with an average of 0.62 migrants per household. On the other spectrum, only 7.55% of the households in the South-South West have representation of the migrants in the U.S. bringing down the average figure to 0.10 migrants per households. This brings out the characteristic of the propensity to migrate, which perhaps is reflected in the fact that not the entire spectrum of population is attracted towards migration. In their scheme of social setting, it is possible other factors as family ties, employment opportunities available at the local level will have influenced their lesser desire to choose the route of migration.
Table 2: Rural Mexican Household Income and Remittances, 2002
Sample Size: 1782
Source: ENHURUM
The total income in Table 2 has been computed based on the detailed data collected by the ENHRUM survey on household-farm production, wage work and migration. Total income is the sum of income from six sources, viz, family production, agricultural wages, non-agricultural wages, internal incomes, international migrant remittances and public transfers. Migrant remittances represent the sum across from all remitters including the dollar-denominated remittances from the U.S. To enable summing it up with the local income, they have been converted into Pesos using the then (2002) prevailing exchange rate of 10 Pesos per Dollar.
The average household income for the entire sample furnished in Table 2 of 53,465 Pesos ($5,346) works out to an average per-capita income of approximately U.S. $ 1,372 per year. An analysis of the composition of income brings out a significant role the migrant remittances play in the rural Mexico. 13% of household total income and 16% of per-capita income are accounted for from the migrant remittances and the majority of it comes from the U.S.A.
Table 2 further brings out the wide regional disparities in the pattern of the remittances. Such variance was so high ranging between 3.6% and a little over 20%, the lowest being reported in the Northwest and the highest coming from Northeast.
Put both together, the data in Table 1 and 2 confirms the hypothesis that migrant remittances have significant impacts on mitigating rural poverty subject to the caveat that these impacts are not uniform across the regions, which might have something to do with the historical trends of migration.
In order to further validate our research question in the affirmative, we have drawn the results of an empirical study conducted by Edward, J et al (2005) using the data provided by the official statistical agency of the Mexican Government. In this model, the authors use a poverty line defined as the minimum per capita income required to purchase a basic basket of food and non-food items in rural areas. The figures estimated by the Mexican Government of 28.1 Pesos per day accordingly were taken for this purpose. This comprised of 15.4 Pesos for food, 3.5 for basic health and education and 9.8 for clothing, shelter, utilities and transportation. Households which were earning an income lesser than this were considered to be below the poverty line.
Table 3 produced below comprises of the data furnishing the proportion of the population living below the poverty line in each region and in all Rural Mexico in the year 2002.
Table 3: Incidence of Rural Poverty, National & by Region in 2002 using the Headcount Measures.
(Percentage of Rural Population in Impoverished Households using Poverty line constructed from the cost of Basic Baskets of …..)
The above table provides the basic information, which has been taken by the authors as the base figures to conduct their analysis. For Mexico as a whole at the time of conducting the survey, 58% of the rural households were living below the poverty line. Further, the incidence of poverty is highest in South-Southwest estimated at 81% and the lowest in Northwest with a figure of 35%.
By permutation and combination of the above statistics according to the statistical model adopted by the authors have estimated the effects of migrant remittances on poverty which is produced in Table 4 below;
Table 4: Rural Poverty: Impacts of a 10% increase in Migrant Remittance
% change in Poverty resulting from 10% increase in Remittance using PGT Indices
The results produced in the above table confirm the fact that overall poverty decreases when migrant remittances go up. In other words, by being employed overseas, these immigrants have shown a capability to substantially improve their earnings and repatriate it back to the home country resulting in an improvement in the quality of living of their dependants in the home country. Had they not opted to go out of the country, they would have been either under employed or even unemployed resulting in meagre or nil earnings. This would have perpetuated the cycle of poverty resulting in an overall deterioration in the economic standards, which could cause social strife.
The results also bring out the sharp variance in poverty elasticities of remittances from the migrants. The higher the migration the greater the impact on the reduction of poverty possibly due to the increased remittances these migrants could send back home.
Overall, keeping other things constant, a 10% increase in international remittances had the effect of reducing poverty by 1.6% in the West-Center compared to a nil change in South-southwest. Similar is the case with poverty gap in its showing a trend of greater sensitivity of poverty to remittances in regions in which a large percentage of households having international migrants.
Macro Economic Effects of Remittances in Developing Courtiers:
Yet another dimension of remittances has attracted considerable interest among the academicians and policy makers which relates to their macro economic impacts on the recipient countries. While at a micro level, remittances by and large, play a role in improving the consumption levels of the families, they are considered to provide a stimulus to the investments in the domestic country by providing access to external finance which the monetary authorities could utilise for promoting investments. This in turn, in the long run, could increase the employment and incomes which ultimately results in a reduction in the poverty levels and improvements in the standard of living.
When the developing countries tend to be afflicted by natural and manmade disasters, remittances provide a cushioning comfort in softening the adverse impacts of such occurrences and incidents. This is the case with respect to Bangladesh which gets affected more often than not by floods and Central American Countries when they suffer from the furies of nature as cyclones and hurricanes. Their role during man made disasters appear to be all the more pronounced during escalation of conflicts and political crisis. In Somalia when the local government collapsed in the1990s it came into the rescue of many people to survive and over a period of time emerged as a source of investments for building the country and her commerce. Yet another case in example is Haiti where and when the President was thrown out of power, it provided the much needed cover to handle the crisis. This was made possible as it constituted atleast 20% of the GDP. Thus, in short from a macro level perspective, they act as a social insurance to mitigate the sufferings of the populace.
For many countries which are/were vulnerable to balance of payments crisis, they provide a layer of security in levelling its adverse impacts. Thus, in India in the 1990s when the country was precariously placed in not even being able to meet even three weeks of her import requirements, through major relaxations in exchange controls, the country was able to gain phenomenal increases in the inflows transforming her from a chronically deficient balance of payment to a relatively comfortable surplus country. Their crucial role could be understood better when we consider the fact the ratio of debt to exports would increase substantially if they are excluded from such calculations posing yet another worry to the policy makers. They, thus soften the access to external finance through improved economic status despite the fact that credit rating agencies do not take them into consideration in their overall rating assessments. This, however, has not restrained some countries to use it as an innovative policy instrument. They have securitised the future outflows of them to lessen the impacts of credit squeeze even in conditions of sub-sovereign ratings. It improves the access to external finance for banks of countries which receive high remittances via the wire transfers as they have resorted to issuance of bonds in the international capital markets backed by the future foreign exchange from the flow of such remittances. The classic example of this is Brazil which in 2001 issued bonds valued at US$300 million using the future Yen remittances of their workforce in Japan. We can mention Mexico, Panama and Turkey as other cases in example. Yet another macro impact of remittances is the ability of such countries to become less reliant on foreign exchange. However, their efficacy in this regard are subject certain limitations which we have discussed in the relevant section of the paper.
From the education and health care investments point of views, significant evidence is available of their positive impact in promoting these sectors. In a study conducted by Amudeo-Doranates et al, it was reported that 46% of the Mexican migrants had cited the main for their remitting the money back home is to provide adequate health care to their families. The expenditure on education in developing countries was found to vary between 2% (Ecuador) and 17% (Dominican Republic). Thus it can be inferred up to a degree that over a long period, they would have a benefiting effect in building the human capital in the recipient countries in terms of producing healthier and educated adults.
The foregoing paragraphs explain the important characteristics of remittances as a macro economic instrument in their ability to serve as an economic and social cover of insurance. However, some of the limitations to this have been pointed out in the following paragraph(s).
Even in cases where the remittances tend to flow predominantly to the poorer households, across the board conclusions cannot be drawn of their impacts in the reduction of poverty and deployment of funds to long term developmental activities. Mexican surveys have indicated that even where the recipients tend to be concentrated among the poorest of the poor segments of the population, the number of households who both receive remittances and at the same time belong to the lowest quintile constituted only 3%. The same pattern was almost witnessed in respect of other Latin American countries with limited exceptions (Acosta et al, 2007). Thus, if we exclude the impact of remittances sent by relatively higher qualified and skilled immigrants in assessing the macro level impacts, it may not be significant. However, their importance when taken to include such components also in addressing the issues of poverty over a long run still holds good. This is because of their ability to improve employment, incomes and in short macro economic development through transfer of knowledge, promotion of business and productive activities (United Nations, 2006).
At a social level, remittances are exposed to the vulnerability of the migrants who are situated in unstable countries. The 1991 Gulf War inflicted severe hardships on Jordan and Yemen as the migrants from these countries were displaced which had put a literal halt to the financial inflows. Similarly, the expulsion of the less skilled Indonesian workers from countries like Malaysia and Thailand consequent to the Asian financial crisis imposed severe hardships to the migrants, their families and the country as a whole. The social costs such occurrences impose on the sufferers may not amenable to quantification that easily.
Though remittances have reduced the dependence of the home countries on foreign aid, they can by no means replace it due to various limitations. They are private flows in nature and cannot be expected to substitute the funding for public projects. Official development assistance is still critical for development of projects which are focussed on the large groups considered to fall below the poverty line. In many of the developing countries, there are sectors (e.g. Rural Drinking Water and Sanitation) which need large social investments for which still office development assistance is needed to reach the benefits to the poorer sections of the household.
Another concern expressed by economic policy makers relate to the apprehension that large overseas remittances influence the real exchange rates adversely making the exports of home countries unattractive. Evidences in this regard are mixed and in any case they are amenable to policy initiatives. With the help of surplus reserves, the productive and competitive capacities of the domestic sectors of production could be enhanced to mitigate such adverse impacts. One more argument is that they tend to increase the inflationary pressures in the countries of origin but in the current scenario of recession which has crippled many of the economies in the world; it is considered to be a better policy option to deflation as it does not dampen the employment and income generating opportunities. It is true under such conditions the interest rates rule higher, but, the fact that funds are available for productive investment as against a credit squeeze makes it a better policy instrument.
We believe on balance remittances do play a decisive role either in improving the consumption of the domestic households pertaining to food and non-food items, improve the economic climate and credit worthiness of such economies and create a favourable climate for investments. It depends on the ingenuity of the political leaders and the policy makers of respective countries to devise methods to derive maximum economic and social advantages from such remittances. The maxim that economic factors do neither confer universal advantages nor disadvantages would have to be always kept in mind before pronouncing any judgement on their impacts.
Conclusions:
We can conclude this chapter by stating from what we have dealt so far, it become clear that concerning Mexico, remittances from migrants have an effect of reducing rural poverty. Should there be a trade off between the local earning capabilities of these people vis-à-vis their potential to earn abroad, the preference would naturally be in favour of migrating abroad, of course, subject to other things being equal. These authors have also pointed out a possible spin off effect in the fact that migration produces an integrating effect on respective economies. When the economies get integrated, the effects of remittances on poverty reduction tend to have a greater effect. We would carryout a discussion in the next Chapter along with implications for policies.
Chapter 4: Discussion
This Chapter would sum up the work carried out in the previous Chapters in a brief manner and proceed to draw policy inferences from the results drawn.
The Literature Review mostly indicate the positive effects of remittances sent by the migrants in the over all reduction of poverty. However, most of them concentrate only on the economic impact of migration and there appears to be a gap in the literature in taking up a holistic point of view of the impact of migration from social and psychological perspectives. Though Mexico stands apart by way of an example of the positive effects of remittances over the reduction in poverty levels, larger studies may be needed to validate them in a global context. This is because of the fact that proximity of Mexico to the U.S.A. could have conferred advantages for the Mexican population in terms of reduced travel costs, frequency of their ability to come back to the home soil to be with their near and dear. When the distance between a developing country and developed country is of significance, there may not be a similar motivation for the home country population to migrate. It is also possible that historically the U.S.A. is known as a country of immigrants and this could be reflected in their accommodating the Mexican as among one of them despite the averseness some parts of local population in the host country may have in accepting the immigrants. It has also to be noted that during cycles of boom there is relatively lesser controls imposed by the host countries basically due to the shortages in the labour that occur during such times. In recessionary conditions, which the developed economies have been, undergoing in the last two years, would a similar policy be adopted is doubtful. In fact, the political opinion tends to favour discouraging overseas workers, which is seen openly atleast in respect of qualified work force. However, whether the same would hold good for unskilled/semi-skilled workforce, which is scope of this paper, is a matter for speculation.
After disconcerting such possibilities, still we can draw inferences from the analysis carried in the previous chapters that the same trend would apply in respect of similarly placed countries as the propensity of the local population to migrate is very high especially under circumstances of under/unemployment in the domestic sector. Another case in example is Africa. We would not dwell at length on this except to make brief observations of the trends obtaining there. Studies on migration dating as back as to 1940s in the Malawi-Zambia Area and research conducted by the International Labour Organisation (Bohning, 1981) and the Centres for Migration Studies from time to time confirm the evidence of positive contribution of migration in the alleviation of the rural poverty. In this context, not only remittances, but deferred pay is also referred. It is documented that though only 10% of Basotho Miners repatriated money through official sources, they are reported to have sent a bulk of it through unofficial sources which is reflected in the over improvement of the quality of living of their dependants in the home. More than 60% of migrants deferred pay was reported to be not touched by the employers or their families until their return back home suggesting that it was a deferred savings used for good by them on their return (Gordon, 1981). It is further recorded that for long number of years remittances to Lesotho constituted between 25 and 50% of the country’s GDP. The statistics quoted above establish beyond doubt that but for the remittances sent back home by the migrants, the rural poverty in Africa would have been greater.
From the perspective of our paper, it has also to be noted that through the remittances, the migrants have also spearheaded developments in their home countries. They had used the surplus money to buy productive equipments to modernise production methods, acquired new or additional skills, which they had deployed productively on their return, created an international market for their home products and even brought a political awareness of the benefits of bilateral or multilateral integration through preferential tariff and other arrangements.
The policy implications stemming from our study are very clear. If liberal migratory policies are not followed by the developed countries which is witnessed in varying scales among them, it would only accentuate the poverty levels of developing countries as they would otherwise be denied the opportunity of making a decent earnings elsewhere in return for their labour. This would in turn aggravate the poverty in the rural areas, which eventually would impose additional burden on the donor countries and international agencies.
The policy makers in general and politicians in particular in many of the developed countries appear to be suffering from xenophobia when it comes to issues of migration. There is also a significant gap in the research in making systematic studies to document the effects of migration and remittances on the poverty. Even the international funding agencies do not seem to be taking sufficient initiatives to fund such researches. As a result, most of the countries appear to discriminate the migrant population and going a step further in acting violently against them as recently witnessed in Australia. Migration and poverty are dynamic in nature and warrant constant monitoring and updates on a continuing basis to keep abreast of changing circumstances
Policies restricting migration in regions where the migratory tendencies are high result in an increase in the poverty levels in such countries. On the contrary, even if pormotary measures are not taken, a non- discriminatory or neutral approach to migration by the host countries would go a long way in ameliorating the conditions of poverty especially in countries which are close to developed ones. More over, where the propensity to migrate is high, there is a tendency for these people to resort to short cut methods even at the cost of their lives. Such losses in valuable human life could be reduced if not totally avoided by following a neutral approach to migration.
Conclusions:
This Chapter can be concluded with the observation that by adopting the route of migration, generally male households tend not only to take care of themselves but also their dependants by ensuring a reasonable standard of living to their families. Policy makers should have an open mind and be receptive to existing research conclusions favouring such measures. In an era of virtual integration of the countries with modern technologies, adopting restrictive tendencies to the vulnerable section of population which otherwise would earn and provide a decent living for themselves and their families would go against the spirit of globalisation. The virtues that are preached in public forums by leaders of their intentions to handle poverty on a war footing would be devoid of gneuinity. Subject to other things being equal, migration should be treated as a positive variable in the treatment of policy measures aimed at reduction in the levels of poverty.
Chapter 5: Conclusions:
In this Chapter, we would review the work we had carried out to make an appraisal as to whether we have been able to do justice to the project in terms of its objectives, the literature review, the data analysis, the policy inferences and any other factors, which may be appropriate for the subject in relation to its future treatment.
The research question posed in the current paper is to what extent remittance provides security against vulnerability to poverty. In our opinion, it has three dimensions, one the implication for the migrants themselves, the migrants’ families and the home country in terms of its development arising out of spin off effects of such migration.
We believe that we have been able to establish the fact that migration does produce positive vibrations in boosting the confidence of migrants themselves, as they are able to employ themselves possibly at a much higher earning in a host country, which otherwise they might not have been in a position to do in their homelands. This brings in a sense of fulfilment in them. Besides being exposed to the way of living of the host countries the developmental fruits of which they are able to enjoy to an extent, their approaches to treat their families in the home country are broadened. This is in addition to the fact that they tend to send maximum amount their earnings back to their homes and if the domestic households are judicious enough it would not only result in an improvement in their standard of living but also result in a surplus amount that could be saved for future needs or acquisition of assets. The fact that these people tend to keep the deferred wages for future use generally for acquiring assets in the home country speaks volumes of their propensity to spend less and save more. At the same time, they do not become restrictive in imposing controls on their households to reduce their spending and in fact go out of the way to improve their standard of living. Thus, from the migrant’s as well as their’ family viewpoint, we have established sufficient evidence to affirmatively answer our research questions.
Migration and remittances constitute yet another channel, which could improve the welfare of the people in the developing countries in a macro sense. The migratory workforce after spending years abroad have been found to carry back valuable ideas and technologies to the home countries for experimentation and implementation. Thus, at a macro level, these countries need not spend to that extent resource to acquire certain technologies. The savings generated out of the remittances of these migrants lying in the banking system can be utilised by them in a judicious manner to promoted funding of local industrial activities at a lesser cost of money. Thus, remittances serve both the purposes of consumption and investment. Again, when there is a spurt in the consumption in the domestic countries arising out of the remittances households have at their hands; demand gets generated which in turn increases the production. As a result, there is a spurt in the industrial and commercial activities in the home country. Since remittances influence both the immediate and the long-term health of the receiving economy, they are crucial to economic well-being of the developing countries. Understanding the roles of migration, remittances in the reduction in poverty and improvement of the quality of living of those who otherwise would be caught in the vicious cycle of poor-income-poor living are crucial for politicians, policy makers and academicians all alike and this paper has stressed the need for such an understanding as analytically as possible. We had also established the positive effects of migration on human capital and physical investments.
We would now specify some of the limitations of this research We have not been able to provide a direct answer to the questions as to whether remittances provide a security cover against poverty. By implication and indirect evidences, we have provided the answer in an affirmative way. We should understand that security could mean different things to different people. In the context of migration of workforce at the lower end of the spectrum we have to take it to mean the provision of essential items for living a dignified life and to that extent, the answer is unequivocal yes. If by security we mean a safeguard against unforeseen and events beyond one’s control, the research would need a different treatment. Thus, while not able to provide a direct answer could be considered as a limitation, it cannot be taken too far to mean that this Paper did not serve the purpose of the research. In fact we have brought out their importance in acting as an economic and social cover to address many a crisis which these countries under go over a period of time inspite of our belief that there is a dearth in the literature to address the multifarious issues migration brings along with it and one such issue is the security cover. When we talk of a security cover, the meaning is contextual in nature. For instance, it could mean a generation of a certain amount of savings on which the migrant and his/her family can fall as and the migrant is hit by unforeseen events. Security would have a different meaning from this one wherein the remittances act as a means to purchase homes, which would provide shelters to the migrant and his/her family. Hence, we believe that this limitation is not a serious one affecting the very purpose of the research. It is also an area, which needs further research in its own rights.
Yet another limitation is the dearth of reliable data to draw valid inferences. This is reflected in the statement of the International Bank for Reconstruction Development (IBRD) which had observed that most of the data for studying migration and remittances is “poor and inconsistent”
However, the major limitation of this paper is that it consists of a review of existing research data and interpretation based on such data. To that extent, it is as valid as the data sources and the methodologies adopted. However, the paper has tired to fish in for quality data corroborated by official sources and to that extent the limitations has been overcome.
We also find there are not many studies directly linking the inter-connections between migrations, remittances or the development in this type of literature is very slow. In fact upto a point of time the links between migration and poverty via the remittances route does not seem to have been thought of at all. We have attributed such a statement as we find that there is no integrated approach to the problem is seen in the workings of the policy makers, researchers. Each one appears to be working and specialising only in his/her chosen area in isolation of the other. Collaborative ventures in this regard would not only be cost effective, but also be more productive. Migration is a multi-faceted term, which provides ample scope for research by Sciences as well as Humanities, and a multi-disciplinary team should deal with the policy aspects it throws open. When it comes to the question of assessing its non-economic impact of migration, there does not appear to be much literature available. It is a matter of concern as to how these intangible valuable things could be assessed in terms of the costs it imposes on the migrant as well as their families. It was pointed out while dealing with some of the negative aspects of migration, in may cases, the women households are left rudderless and cannot handle multifarious tasks at the same time in terms of rearing the children, taking care of the home and work pressures if they are involved in some income generating activities. It is also unclear as to the extent community support these women receive when the male heads are away from their homeland. In this regard, it is appropriate to mention the concerns expressed by the UNDP in its various reports. Various Human Development Index (HDI) reports during the last two decades have expressed that the emigrating countries had recorded lower HDI vis-à-vis the immigrating countries. The complexity of the influence of migration on the social lives of the people is very difficult to unravel as the manifestation of it has come out in different forms as the outbreak of infectious diseases, mental health problems which all cause a cost on the home country in terms of higher expenditure on health care. This correspondingly increases the non-plan expenditures of the respective governments and to finance it they have to resort to fiscal deficits, which are frowned by the funding agencies. Thus, it has never been possible to assess the true cost-benefit analysis of migration. If on the one hand, migration results in the reduction of poverty but on the other hand, it imposes a burden on the state exchequer in terms of heavy outlays on such welfare programmes. This can become a zero-sum game. It is in this connection it is worth mentioning about the other factors that influence identified by the International Organisation for Migration (IOM). They relate to demographic settings, economic setting, socio-cultural context, political systems and environmental conditions.. Thus, a holistic approach to the multi-dimensional problems posed by migration and associated issues appears to be the need of the hour.
Finally, despite the critical role migration plays in providing employment opportunities to its people and brining in remittances which eases the balance of payment of the home countries and provide sources of financing domestic economic development, it is unfortunate that it is not found anywhere in the national agenda as a strategy. This perhaps explains the reason for the dearth of statistics and officially sponsored studies. Even the International Organisations have not taken sufficient note of it. We hope that in the near future such anomalies would be set right.
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