Harnessing remittances and diaspora knowledge for productive capacities in LDCs

Remittances have attracted increasing attention in the international discourse, partly owing to their remarkable growth over the last decade (Ratha, 2003; Solimano, 2005; UNECA, 2007; UNDESA, 2012b; UNDP, 2009). A growing consensus is emerging that remittances constitute a significant source of external financing, whose availability, if managed through appropriate policies, could prove particularly valuable for capital-scarce developing countries (especially those with larger diasporas). The jury is still out on whether or not they are the most stable and predictable source of development finance. While some unresolved questions remain as to their macroeconomic impact, a large body of evidence suggests that remittances contribute to poverty reduction and improved health care and education.

Related Subject(s): Economic and Social Development