Money Flows

One of the consequences of the constant flow of people, goods and services in the globalized economy is the ever-increasing importance of remittances. As noted in past entries, migration is one of the trends that will shape the demographic future of the world. Immigrants constantly send money back to their native countries in massive amounts. In 2006, remittances amounted to around $250 billion worldwide, according to the World Bank, with underdeveloped rural areas receiving the bulk of these funds. Remittances significantly contribute to the economies of Mexico and El Salvador, for example, adding up to 3 percent and 16 percent of these countries’ GDP respectively. The following map, provided by the Multilateral Investment Fund of the Inter-American Development Bank, shows the total amount of money in remittances that was transferred out of each US state, whereas this one displays the remittances that were received by Latin American countries. More fascinating information can be found on this website, with tabs leading to graphs showing the evolution of remittance transfers for each country across time. In recent years, various organizations have taken measures to make money transfers easier and safer. We can expect them to play an ever more important role in fueling economies, but are they good for stability?