Migrant workers in Ireland send millions of euro in remittances home each year, providing a lifeline for their families, writes Carl O'Brien.
They call it the Irish Village. In the rural flatlands of the northern Philippines, the gathering of 30 wooden houses stands out. They are impeccably tidy, painted in loud primary colours, with plants hanging proudly on walls. But the houses stand out for another reason: they have been funded entirely by remittances sent home from Filipino workers in Ireland.
"We try to send as much money as we can to our families," says Cres Abragan, a Dublin-based Filipino nurse involved in the Gawad Kalinga project which, translated, means "to give care". "But we're also encouraging workers to give something back to the poor of the Philippines in projects like this." While the small wooden houses in Catarman - which cost around €1,200 each to build - represent humble sums of money in the overall scheme of things, the initiative displays the simple power of remittances.
The act of sending money home is often talked about as a patriotic duty in the Philippines, which effectively educates nurses and other healthcare professionals for export. Seven million ex-pats sent an estimated €10 billion to families and communities last year.
REMITTANCES PROVIDE A crucial lifeline for many families who depend on the money wired over from relations working thousands of miles away in cities such as Dublin. They also offer a rare chance for underprivileged families to accumulate savings, invest in schooling, housing or a small business, and maybe even rise into the middle class.
The Gawad Kalinga project seeks to tap even further into the transforming effects of remittances, using the cash to rebuild slums, provide education and forge new communities. It is one of the ways communities, aid agencies and governments try to harness the flow of money to alleviate the poor living conditions that can drive people to migrate.
The phrase "emigrants' remittances" should have a particular resonance to Irish ears. Money from emigrant workers helped prevent starvation and eviction for many families in the 19th century. It propped up the economy and helped improve living standards when the country was on its knees in the years after Independence. During the 1950s and 1960s, experts estimate the country received a sum equivalent to the structural funds received in Ireland from Europe in the following generation.
There has been a remarkable turnaround. Together with the dramatic growth in immigration here, the amount of money being sent out of Ireland as remittances has soared. In Ireland, migrant workers sent at least €44 million to their home countries in 2005, according to research commissioned by the National Economic and Social Council. However, researchers at Ralaheen Ltd - the company that undertook the study - say the figure is a conservative one and the real sum could be much higher. Some industry sources put it closer to €300 million.
An Post, which carries out transactions for the money transfer firm Western Union, says the number of annual transactions has gone "through the roof" to 400,000 last year.
New EU member states such as Poland, Latvia, Lithuania and Romania account for most wire transfers. Significant sums are also sent to developing countries such as Nigeria and the Philippines, which have relatively large populations here.
Globally, remittances are the largest, fastest-growing and most reliable source of income for developing countries. According to the World Bank, the number of international migrants swelled from 120 million to 175 million during the 1990s, and the sums they send home each year have more than tripled in this decade. It estimates the total amount of money sent by migrants last year exceeded €195 billion. By comparison, the total amount of development aid last year was €82 billion.
Mudashir Ibrahim is part of the growing army of migrant workers who sends a sizeable chunk of his salary to his family abroad. The Dublin-based Nigerian's parents are largely dependent on the money he and his siblings send them from around the world. "It's very important to them - they're old and can't work any more. There isn't the kind of social security system you have in Ireland . . ." Idrahim sends back around €200 (33,000 naira) a month, which is equivalent to the monthly wage for many workers in Nigeria.
ONE THING RANKLES, though: the size of the commission he has to pay to his money transfer company. It costs between €20 and €31.50 to send €200 from Ireland to Nigeria. The costs are similar for other parts of the world.
The commission rates, which vary from 5 per cent to 15 per cent of the total, have been described by the UN's special representative on migration, Peter Sutherland, as "absolutely ridiculous". These sums can have a significant impact and may be equivalent to the cost of sending a child to school, or feeding a large family for several weeks.
In order to avoid the charges, the Migrant Rights Centre Ireland says some migrants will try anything, such as bringing cash home in person, or giving it to a middle man. "It's a process fraught with difficulty . . . We have had cases where a number of families give their money to one person to bring home and it just disappears," says Siobhán O'Donoghue of the Migrants Rights Centre. "When that happens, there's no comeback."
Some African and Asian migrants prefer to use the hawala system, an informal way of transferring money which has its roots in the financing of long-distance trade in the early medieval period. Nowadays it involves a network of brokers known as hawaladars who communicate via mobile phone or e-mail and take commission on the money. It avoids bank charges, transmission delays and foreign exchange regulations. All hawala requires is trust on the part of the brokers.
For migrant workers from less developed areas, these informal ways of sending money home are the only real alternatives to the wire transfer companies. The main banking institutions in Ireland carry even higher commission charges than wire services and involve the further complication of needing to have a bank account in the first place, says Dr Pauline Conroy of Ralaheen Ltd.
"Migrants often do not use banking systems to remit money. It's quite simple, they do not have bank accounts back home, their families do not have bank accounts, there are no banks or post offices in their villages or towns or they do not trust them," she says. While these companies come under the aegis of the Financial Services Regulatory Authority, bureaux de change and wire transfer companies were excluded from its consumer protection code, published last year. "Once again, we find separate systems of financial services creeping in," says Dr Conroy. "One for us and another for migrants."
The British government has helped establish a website, www.sendmoneyhome.org, to increase information about money transfer charges as part of an initiative to make the process of sending remittances easier, less costly and more transparent.
Over in the Philippines, the Gawad Kalinga projects are going from strength to strength. Dozens of villages have been built around the country from migrants' remittances, while ambitious projects to provide education and healthcare are well underway.
Meanwhile, remittances from migrants based in Ireland are continuing to flow into the country and the project is expanding into other disadvantaged neighbourhoods. "We are still finishing the Irish Village, but we have plans for 30 more houses," says Cres Abragan, with pride in his voice. "We're going to call it Sligo Village."