Sunday, December 19, 2010


"The World Bank estimates that migrants from developing countries sent home remittances totalling $316 billion in 2009."

It seems that large as this amount is, foreign direct investment is perhaps four times larger. Of course, a large portion of FDI is made in developed rather than developing nations.

According to the OECD, the remittances are some three times larger than Official Development Assistance to developing nations.

Note that all these transfers are not allocated in order to maximize the reduction of poverty, but rather for other purposes. Thus remittances are sent to the countries that sent their citizens to work abroad, not necessarily to the poorest people in the poorest nations. FDI is allocated to those sites which investors feel will provide the best returns consistent with acceptable risks. Foreign aid is provided for political reasons; Iraq is currently receiving a large portion while the poorest people in the poorest nations are often left out.

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