More from UN DESA Vol 25, No. 06 - June 2021

Cutting the cost of family remittances

Every day, millions of families around the world visit their post offices, banks and money transfer operators to collect money sent to them by their relatives working abroad. These family remittances are often what allows them to send their children to school, make home improvements, set up small businesses or simply get by.

Estimated at hundreds of billions of dollars each year, the remittances not only support families, but help entire countries develop and eradicate poverty. Recognizing their importance, the United Nations General Assembly has proclaimed 16 June as the International Day of Family Remittances.

While border closures due to the COVID-19 pandemic have severely restricted all forms of human mobility, the vital remittances continued to flow. The most recent data from the World Bank show that remittances to low- and middle-income countries reached $540 billion in 2020, just 1.6 per cent less than in 2019.

This trend, defying earlier pessimistic projections, is consistent with historical observations: in time of financial crises or natural disasters, migrants tend to increase remittance transfers to support struggling family members back home.

The significance of family remittances was not lost on the designers of the Sustainable Development Goals either. Goal 10 of the SDGs includes a target of reducing the average transaction costs of migrant remittances to less than 3 per cent by 2030. Yet the world is not on track to achieve that ambitious benchmark.

According to the latest World Bank data from the end of 2020, the global average cost of sending $200 was 6.5 per cent – more than double the SDG target. Average remittance costs were the lowest in South Asia, at 4.9 per cent, while sub-Saharan Africa continued to have the highest average cost – a whopping 8.2 per cent.

In July 2021, Member States will have an opportunity to assess the transformative impact of remittances across the SDGs during the High-level Political Forum on Sustainable Development. And next year, the General Assembly will take stock of the Global Compact for Safe, Orderly and Regular Migration, including the critical linkages between international migration and sustainable development.

See how you can get involved here.

New efforts needed to invest in climate action

Recent data from the United Nations Environment Programme estimates that current climate-adaptation costs in the developing world stand at $70 billion a year and could increase to as much as $300 billion a year by 2030 without urgent action. For every dollar invested now in climate-resilient infrastructure, $6 can be saved, writes Selwin Hart, the UN Assistant Secretary-General for Climate Action, in a new op-ed.

However, the fight against COVID-19 has brought many national budgets to a breaking point, with limited means to invest in climate. For example, The Financing for Sustainable Development Report 2021 released by UN DESA, says that around half of least-developed and other low-income countries were at high risk of or in debt distress before COVID-19, and, with falling tax revenues, the pandemic has sent debt levels soaring and the fulfillment of the Sustainable Development Goals (SDGs) in jeopardy.

To avert the worst outcomes, governments should provide liquidity and debt relief support so developing countries can fight COVID-19 and its economic and social fallout. As part of their rebuilding efforts, both the public and private sectors must invest in human capital, social protection, and sustainable infrastructure and technology—which will make the world more resilient to future shocks.

To support the UN’s push for more urgent global climate investment, UN DESA will host a Global Policy Dialogue on Financing global climate action and promoting digital solutions on 30 June from 8:30 to 10 am EDT. Statisticians, policymakers, and climate and sustainable development practitioners will discuss the best approaches for ensuring that climate financing measures are included in rebuilding efforts, and that they are inclusive and help the most vulnerable. In particular, attention will be paid to digital solutions for climate adaptation and mitigation.

The event will be broadcast live on UN DESA’s Facebook page. Stay up-to-date on upcoming events by browsing this page.

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