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CIAO DATE: 04/06
Remittances in Conflict and Crises: How Remittances Sustain Livelihoods in War, Crises and Transitions to Peace
Patricia Weiss Fagen with Micah N. Bump
February 2006
Executive Summary
Although migrant workers, refugees and immigrants have been sending money, goods and ideas home for millennia, until about a decade ago donors and international finance agencies paid little attention to the phenomenon. Interest has grown exponentially as statistics show what we now call migrant remittances to be among the most important contributing factors to national economies in several countries. Nearly all the countries in the conflict, war-to-peace transition, and crisis categories are highly dependent on remittances. The slow recovery of livelihoods and persistent violence or repression ensure high levels of migration and the need for remittances in such countries for several years after conflict and crises have ended. By all accounts, migrant remittances reduce poverty in important ways in developing countries. Research shows that migrants transfer funds and invest in their countries of origin at times when international investment has all but disappeared. By serving these purposes in countries emerging from or still experiencing conflicts (e.g., Bosnia and Herzegovina, Kosovo, Sri Lanka, Afghanistan, Somalia, Liberia, Côte d'Ivoire and others), remittances can be seen as a sine qua non for peace and rebuilding.
However, there are major difficulties to overcome. Efforts to facilitate remittance flows to conflict and post-conflict situations have been complicated by a variety of institutional and political factors. Additionally, anti-terror and anti-crime regulations all but preclude legal money transfers to some crisis countries. Perhaps most important, restrictive immigration policies prevent remittances from being earned in the first place. Such policies are by no means limited to developed countries. Regulations can be tighter and treatment of immigrants worse in countries that border conflict, conflict-affected and crisis countries.
The analysis in this review reinforces three related premises:
First. While migration is an obvious consequence of conflict, migrant remittances may help many to avoid further forced displacement. Conflict almost always generates massive forced displacement. Its impacts go beyond areas of actual fighting and pose sometimes insurmountable problems and enormous material loss. Remittances support people who cannot or do not choose to leave because leaving carries the prospect of losing everything and being stranded in miserable conditions in an unfamiliar place. Those who stay are highly vulnerable and, more often than not, economically dependent. Conflict tends to undermine both general economic stability and personal livelihoods. Coping strategies, where possible, include economic support from relatives who have migrated.
Second. Forced migration and immigrant flows tend to merge. Both are important generators of remittances. Refugee migrations—i.e., those driven by conflict and repression—often build on previously existing immigration communities. The refugees then open the way for post-conflict or post-crisis labor migration from the same countries. Remittances from both labor migrants and political refugees are critically important to countries in conflict or crisis, but increased immigration and labor restrictions in both developed and developing countries have made migrating and sending remittances more difficult.
Third. Remedies enacted to address the problem of remittances being used to support conflict and crime should be refined. Some money transfer systems may mix genuine and much needed support for families with funds destined for conflict support or crime, but regulatory measures taken to prevent this from occurring have become relatively blunt instruments that pose greater problems for the former than the latter, and cause legitimate operations to close their doors.
