Leveraging Remittances

A Bombastic Element points us to Dilip Ratha's ponderings on the subject of remittances:

A standard remittance is a simple financial transaction that -- if lightly regulated and processed using modern technology -- can cost as little as one percent. If funds were transferred through banks and other financial intermediaries, migrants and their beneficiaries would be encouraged to save and invest. Intermediary banks could also use remittance inflows as collateral to borrow larger sums in international credit markets for local investments.

To best leverage these flows for development, it is time to create an international body -- an "International Remittances Institute" -- that would monitor the flows of labor and remittances and oversee policies to make them easier, cheaper, safer, and more productive. The proposed African Remittances Institute, supported by the African Union and the European Union, is a small but important step in this direction.