Do Remittances Help Growth?

Do Remittances Help Growth? Remittances are money sent back to a home country by emigrants. 400 billion in 2017, exceeding foreign aid to those countries far, similar in proportions to flows of loans and equity investment in those countries, and starting to approach the level of foreign direct investment in those countries.

These inflows of funds are clearly helpful to the recipient family members, helping to increase and to clean their consumption. But do they help boost overall economic growth for the recipient country? Ralph Chami, Ekkehard Ernst, Connel Fullenkamp, and Anne Oeking increase uncertainties in “Is There a Remittance Trap? High levels of remittances can spark a vicious cycle of economic stagnation and dependence,” released in Finance & Development (September 2018, pp. Given the size of these inflows, it will not be unexpected that remittances play a key if not leading role in Lebanon’s economy.

They constitute an essential part of the country’s social back-up, accounting normally for over 40 percent of the income of the grouped households that obtain them. They have undoubtedly played a vital stabilizing role in a national country that has endured civil war, invasions, and refugee crises in the past several decades. In addition, remittances are a very important source of force, amounting to 50 percent more than the country’s merchandise exports. It has helped Lebanon maintain a well-balanced exchange rate despite high government debt.

Returning to the situation of Lebanon, the country’s well-educated inhabitants could be likely to indicate robust growth. Lebanese households, including those who obtain remittances, spend much of their income on educating their teenagers, who score much higher on standardized mathematics checks than their peers in the region. Lebanon is also home to three of the top 20 universities in the Middle East, and experts at these colleges produce more research than their local peers. Lebanon’s abundant remittance inflows could provide seed capital to invest in business start-ups led by its well-educated residents.

  1. Costs of disposal will be the direct added costs only (not existing costs or over head). [IAS 36.28]
  2. 10 -0.10% 17.45% 14.16% 3.28%
  3. The risk trade bull run remains intact
  4. Secondary / Desk Research

Instead of starting new businesses-or even employed in set up ones-many young Lebanese choose to emigrate. The figures are stark: up to two-thirds of men and almost half of female school graduates leave the country. Employers complain of the emigration brain drain that has caused a dearth of very skilled workers. This lack has been determined as a respected obstacle to diversifying Lebanon’s economy away from tourism, building, and real estate, its traditional sources of growth.

For their part, teenagers who choose to seek their fortune cite a lack of attractive occupations at home somewhere else. Given these benefits, it is little wonder that many governments actively encourage their citizens to emigrate and send money home, even establishing official offices or agencies to market emigration in some cases. Remittances make politicians’ job easier, by improving the financial conditions of individual families and making them less likely to complain to the government or scrutinize its activities.

12 million assortment of antique street maps that were purchased from him by Chesapeake at the direction of the board to help pillow his horrendous loss on the Chesapeake stock he possessed. To his credit, McClendon acquired much of his personal fortune invested in Chesapeake. 12 million for his map collection).

The downside, as it turned out, could have been an almost complete wipeout of his lot of money had it not been for the felicitous cash infusion by order of the table. What might solve the company problem in such instances is to never give commodity. Rather, we should require whoever enters top management to get a substantial portion of his or her savings in the business and be forced to retain any position for a decade or more before selling.

This would carefully align the management’s goals with those of shareholders since management would now have a lot of epidermis in the game with no potential for a bailout if things go badly. But, don’t hold your breath waiting for this proposal to be followed. Now, the broader concern is not the greed of commercial insiders at the expense of shareholders though that’s an important concern.

The broader issue is how public policy has been affected by people who have little if any downside if their public pronouncements and projections are wrong. All of the extractive sectors disproportionately place bad effects on those nearest the site of removal for the advantage of the rest of us and for his or her own bottom line. But, of course, Summers alone was not. Many academic experts and financial executives have been pushing for financial deregulation for years. And, is another aspect of the company problem here.