In the course of doing work with the International Organization for Migration and the Small Enterprises Research and Development Foundation, I reviewed literature on the impact of remittances in Philippine countryside development. My review suggested the following chain of causes and effects attendant to remittances:
a) Remittances alleviate poverty through increased incomes at the grassroots level in rural communities.
b) Increased incomes lead to increased savings and investments as well as demands for goods and services (for consumption) among migrant families, which stimulate local enterprises to produce more.
c) Increased economic activities create employment opportunities for non-migrant families, and improve the competitiveness of a locality.
d) As employment and investments increase in a locality, individual incomes increase as well, along with savings, which can be re-invested back into capital markets or the creation of new enterprises.
e) The outcome is better quality of life for families and households, and as the outcomes are sustained, will redound to migrant workers exercising real freedom to choose whether to return back to this country (reintegration) or continue with migration.
f) Interventions are needed to ensure that the above benefits of development do not perpetuate income inequalities as remittances are siphoned back to (a) developed, urban areas through consumption patterns in goods and services offered by outsider entrepreneurs and (b) non-rational investments in speculative and unproductive assets that in the long run work against the livelihood of poor, mostly agricultural, communities.
g) Interventions are also needed to address issues that suggest remittances may impact on values that lead to lack of development in families and communities, such as when it leads to the devaluation of child care among parents, lack of dignity in labor, of working in the country, and of living in the country.
The following important lessons are to be taken into account when designing interventions for channeling remittances.
a) Ensure that the primary beneficiaries (or the biggest gainers) of development are the poor, particularly the migrant families, as well as the communities where they come from.
b) Attend to the investment climate of localities being targeted for development as they are a determinant factor in whether remittances are spent by recipient families on consumption or profitable investments (Pernia & Salas, 2005).
c) Ensure that recipients of remittances (such as families left-behind, or donee recipients) utilize remittances in the best interest of the OFWs and long-term local economic development.
(Ideas collected from various IOM publications and materials by Anji Resurreccion for SERDEF, Philippines)