The Black Man’s Burden
They don’t wear ribbons or white wristbands to show off how caring they are, yet African and Asian expats send billions of dollars in ‘aid’ to the developing world every year.
Remittances are the transfers of money by migrant workers and diasporas to relatives, friends and villages, usually through informal channels. They tend to be underreported by the Western media and underestimated by international finance bodies. The inadequate appraisal of the worldwide phenomenon of remittances indulges an all-too-common assumption that Western countries (self-appointed ‘patrons’) are alone in aiding developing nations, while those indigenous to these countries either passively accept poverty, don’t care, or, if they are ‘well off’, must be corrupt.
Cash Back, the latest documentary short from the education charity WORLDwrite, discredits this defamatory notion (you can watch the film in the full at the end of this article). As Gibril Faal, chairman of the African Foundation for Development (AFFORD), points out in the film, migrants don’t wear their hearts on their sleeves or on a white wristband. Their contribution is not a political statement of what good people they are because they care, nor is it funding procured by NGO awareness campaigns or politically correct ethical giving. Remittances involve none of the moral hype or prescription evident in G8 debt relief or aid. Rather, it is a vital form of informal solidarity, a private action and transaction that is not done to procure a badge or enhance self-worth.
Indeed, the film suggests that remittances reflect real aspirations rather than the poverty of ambition which informs Western charitable giving. Migrants and diasporas want their friends and families to have what they have in the West and are less prey to the prevailing obsession with the ‘survival only’ basics reflected in the UN’s Millennium Development Goals and aid agencies’ campaigns. In the film, for example, Millicent Kumeni from Ghana emerges from a money transfer shop in London to tell us she is sending money back to build a four-bedroom house complete with modern bathroom and flushing loo for her family. Millicent saved much of the money to send back to Ghana by working in a burger joint on a working holiday visa.
In a challenge to contemporary versions of the ‘White Man’s Burden’ (ie, the West is the saviour of the developing world), it is clear that many migrants who have lived in the UK for many years – as well as recent migrants – send money back home. These people are not impotent bystanders in the process of progress but are proactive catalysts of change and betterment, both at a familial and societal level. As Dean Yang argues, remittances also tend to be stable and, while they may increase during economic downturns or natural disasters, their stability makes them a reliable source of income for developing countries, one that does not disappear once the horror images disappear from our TV screens (1).
It may be no substitute for the massive investment developing countries need, but money sent home is spent on more than foodstuffs: it also goes towards building homes and businesses. Remittances can thus function on a macro as well as a micro social level in developing countries, allowing individuals the freedom to spend money as they choose rather than according to the rules of an aid programme with all the accompanying monitoring and regulation. Remittances do not make the poor accountable to Western benefactors; they are a real form of solidarity.
There are numerous studies which attempt to calculate the level of remittances. These, by their nature, are fraught with problems, since only money sent through official means can be counted. Yet even these figures are salutary. A recent study by the International Fund for Agricultural Development (IFAD) and the Inter-American Bank has valued the worth of remittances at around $301billion (£148billion) per annum, a figure that far exceeds the World Bank’s previous estimate of $207billion (2). The study states that remittances to sub-Saharan Africa alone come to $20billion compared with the World Bank’s figure of $9.3billion.
Even the UK Department for International Development (DfID) admits that the estimates for total remittances sent from the UK to developing countries range from £463million to £2.8billion, with the most reliable estimate being £2.3billion (for 2001) (3). This is equivalent to a tiny proportion (0.23 per cent) of UK gross domestic product, but it is a sizeable contribution to UK financial support to developing countries, equivalent to three-quarters of the total for official UK Overseas Development Assistance. The primary developing countries and regions which are recipients of UK remittances are India, Pakistan, the Caribbean (particularly Jamaica), China, Bangladesh, Nigeria and Ghana.
DfID’s instinct, however, is to control; they demand regulation and inclusion rather than provide support for remitters. It funds an advisory website, SendMoneyHome.org, which promotes official channels for financial transfers and emphasises the role remittances can play in supporting its own aid goals. But DfID’s goals are about survival, not development. DfID sees remittances as good news as they provide basics: food, education, and so on. They claim this will help countries meet the UN Millennium Development Goal of halving extreme poverty by 2015. For a government which supports draconian immigration controls and likes to be seen as one of Africa’s saviours, yet hands over little more than hot air and plenty of diktat, co-opting migrant contributions as part of the UK’s aid programme is scandalous. However, migrant workers and diasporas do not see themselves as DfID aid workers, are not motivated by DfID, and are quietly getting on with promoting a brighter future for their friends and families that includes an end goal far greater than mere survival.
So lucrative is the business of remittances that money transfer companies such as Western Union and MoneyGram have entered into fierce competition by reducing commission costs for their transfers to compete with informal networks, and a small number of dominant banks in Africa are set to follow suit. Sadly, however, many institutions are keen to curb, control and regulate these flows rather than celebrate them and provide greater assistance to people working overseas.
Fears of money laundering, funds to terrorists and similar panics also surround money transfers. In the UK, the informal hawala system of transfers has come under recent scrutiny (4). The system involves transfers mainly to the Middle East and South Asia through unregistered operatives (or hawalders), and is preferred due to its accessibility by local villages, its low cost and the lack of bureaucracy involved because it is based on trust. In 2001, when he was chancellor of the exchequer, Gordon Brown announced a new task force to crack down on unofficial cross-border money transfers. ‘Underground banking is often used for legitimate purposes, such as remitting earnings to families far away’, Brown told the UK parliament. ‘But it is also known to provide very easy means for criminals and terrorists to conceal the laundering of money.’ (5) In the USA the al-Barakaat network used by Somalian émigrés to send money home was shut down on the specious grounds that it funded al-Qaeda. In fact it turned out that the only accounts held by terrorists were in a conventional bank – SunTrust Bank in Venice (6).
In the UK, all transfer shops now have to be registered and senders have to show passports as proof of ID. However, many migrants wisely get someone they know simply to carry the cash, although there are limits to this method. A similar informal system is used by Chinese migrants, aptly called fei-chien, or ‘flying money’.
The remittances phenomenon rightly challenges Western self-flattery and needs to be put on the map. Recognition, however, can be a double-edged sword, bringing with it regulation, interference and prescription. Many organisations can also happily say ‘let’s support this practice and recognise it’ since it involves them doing nothing. We would better meet the aspirations of our peers by following the example of those who ‘remit’ and handing over resources with no strings attached. On the campaign front, demanding that governments allow greater freedom of movement and higher wages could do far more than the current support for paternalistic so-called ‘poverty reduction’ schemes authored by Western aid agencies.
Holly Ellyatt is a volunteer at the education charity, WORLDwrite. Additional research by Saleha Ali. This article is based on research conducted for the latest WORLDwrite documentary short, Cash Back.
Watch the new WORLDwrite film, Cash Back (via current.com)
Brendan O’Neill gave three cheers to one million new workers. De Roy Kwesi Andrew suggested that if Westerners hate being affluent so much they should swap with Africans. Stuart Simpson accused the developed world of starving Africa of money. David Chandler argued that aid was more about aiding the West than the rest. Or read more at spiked issues Africa or Immigration.
(1) Yang, Dean, ‘International Migration, Remittances, and Household Investment: Evidence from Philippine Migrants’ Exchange Rate Shocks’, NBER Working Paper No. W12325, Princeton University, Woodrow Wilson School of Public and International Affairs, 2006
(2) Remittances offer $301bn lifeline, Financial Times, 17 October 2007
(4) Hawala: criminal haven or vital financial network?, Newsletter of the International Institute of Asian Studies, University of Leiden
(5) McCrary, Ernest S and Johnson, Mark, ‘Following Osama’s money trail: Banks get into law enforcement’, Global Finance, November 2001
(6) The 9/11 Commission Report, Public Affairs Commission, New York, 2004