Seminar at Pardee House Featured Expert on Remittances

The Frederick S. Pardee Center for the Study of the Longer-Range Future co-sponsored and hosted a special lunch seminar on “Remittances and Development in Post-Conflict States” on Nov. 9.  The event was held in connection with a task force of the same name organized by the BU Center for Finance, Law & Policy and co-sponsored by the Pardee Center.

Prof. Raul Hinojosa-Ojeda, of the Department of Chicana and Chicano Studies at the University of California, Los Angeles, and a renowned expert on remittances discussed his research and work as a “social entrepreneur” with the North American Integration and Development Center.  In the latter role, he is developing transnational mobile phone technology that allows for the electronic transfer of cash from migrants in one country to relatives in their home country. Such cash transfers are known as “remittances.”

Using his research and work in El Salvador as a case study, he talked about the significant social and economic impacts created by remittances. In El Salvador, he noted, one-third of the population has migrated to the U.S. and elsewhere since the end of the civil war in 1992, and remittances from these migrants to family members at home now total the equivalent of three times the nation’s gross domestic product.

Meanwhile, the migrants in the U.S. are usually undocumented workers, taking low-wage jobs and struggling with poverty and social justice issues of their own in this country, Hinojosa-Ojeda said.  It has become a “vicious cycle” in which one country becomes dependent on out-migration for citizens to improve their standard of living, but those who do migrate end up as “illegal immigrants” in the U.S., subject to low-paying jobs and limited rights.  And the transaction costs for sending remittances tends to be very high as few people in El Salvador or migrants have bank accounts.

He said the existing development institutions and policies have not considered the economic and social impacts of remittances, and they also have not kept pace with changing technologies that could alleviate some of the issues for citizens and governments in developing countries.  For example, he said that debit card mobile phone technologies that can be used for cash transfers can also be used by governments to deliver subsidies for fuel and agriculture directly to citizens, dramatically reducing the costs and improving efficiency.

Prof. Hinojosa-Ojeda is a member of a Task Force convened by The Center for Finance, Law & Policy which met at Boston University on Nov. 8 and Nov. 9. As a co-sponsor of the Task Force, the Pardee Center hosted the seminar and will publish a report of the group’s findings in 2013.