The ways in which remittances alleviate the poverty of individuals are, in the ‘first round’ of effects, direct and fairly obvious. They include the following.
1. Survivalist
income
supplementation. For many recipients, remittances provide food security, shelter, clothing and other basic needs.
2. Consumption ‘smoothing’. Many recipients of
remittances, especially in
rural areas, have highly variable incomes. Remittances allow better matching
of
incomes and spending, the misalignment of which otherwise threatens
survival and/or the taking on of
debt.
3. Education. In many developing countries, education is expensive at all levels, whatever the formal commitments of the State. Remittances can allow for the
payment of school fees and can provide the wherewithal for children to attend
school rather than working for family survival.
4. Housing. The use of remittances for the construction, upgrading and repair of
houses is prominent in many widely different circumstances.
5. Health. Remittances can be employed to access preventive and ameliorative
health care. As with education, affordable
health care is often
unavailable in
many remittance-recipient countries.
6. Debt. Being in thrall to moneylenders is an all-too-common experience for many in the developing
world. Remittances provide for the repayment of debts
and
for the means to avoid the taking on of debt by providing alternative income and asset streams.
7. Social spending. Day-to-day needs include
various ‘social’ expenditures that
are culturally unavoidable. Remittances can be employed to meet marriage
expenses and religious obligations
and, less
happily but even more
unavoidable, funeral and related costs.
8. Consumer goods. Remittances allow for the purchase of consumer goods, from the most humble and labor saving, to those that
entertain and make for a richer life
[Impact on the economy:
Totally the contribution of foreign rem ittance rising of living stand ard can not b e d escribed so e a s i l y .
S o
t h e i m p o r t a n c e o f f o r e i g n r e m i t t a n c e
i n t h e e c o n o m y o f
B a n g l a d e s h i s
w i d e l y recognized and requires little
reiteration.
1. Impact on the GNP: Increase in foreign remittance also increases the national income. As the national income
increase the consumption of goods by the country people also increase. So, production of g oods by the different
organizations increases as well. It increases our country’s GNP.
2. Impact of remittance on consumption: As the remittance increase the consumption of
goods by the country people also increase.
3. Increase savings: Foreign remittance that comes from different dev elop ed
countries is
increasing the lev el of our saving s. The
remi ttance receiv ed by our country people is saving in different b anks by making
long term or short term deposit.
4. Increase capital: Remittance received from different developed countries which is
saving in different banks a big source of capital. This huge amount of money is
investing is different project by the bank.
5. Impact of remittance on investment: Foreign remittance is increasing the investment of our country. The remittance is using for small and big
inv estment in
different
project, establishing firm or industry, small or big shop which increases the proper utilization of
money.
6. Increase employment: As the inv estment increase, the employments of our country
also increase.
The
people
of our country are getting
jobs in different project, firm or industries.
7. Impact of remittance on import: It has a bad impact on our economy. By increasing
remittance, it also increases consumption of foreign product. It incr easing the import
of foreign
product
day
by day as
well, Peoples hav e
e n o u g h m o n e y t o b u y f o r e i g n p r o d u c t , a l t h o u g h g o v e r n m e n t i s t r y i n g t o s a v e o u r d o m e s t i c companies by implementing necessary rules and
regulation.]