RTI Reading

Sending money home

the economics of migrant remittances

A 1. decent (adj) =
respectable
Every year millions of migrants travel vast distances using
2. remittance (n) =
borrowed money for their airfares and taking little or no cash
payment; money
with them. They seek a decent job to support themselves with sent, especially to a
money left over that they can send home to their families in distant place or to
developing countries. These remittances exceeded $400 billion support someone
last year. It is true that the actual rate per person is only about
$200 per month but it all adds up to about triple the amount
officially spent on development aid.
B
In some of the poorer, unstable or conflict-torn countries,
these sums of money are a lifeline – the only salvation for 3. salvation (n) =
those left behind. The decision to send money home is often rescue,
inspired by altruism – an unselfish desire to help others. Then deliverance,
again, the cash might simply be an exchange for earlier services redemption;
4. altruism (n) =
rendered by the recipients or it could be intended for
selflessness,
investment by the recipients. Often it will be repayment of a
generosity,
loan used to finance the migrant’s travel and resettlement. compassion
C 5. recipient (n) =
receiver,
At the first sign of trouble, political or financial upheaval, these beneficiary, donee
6. migrant (n) =
personal sources of support do not suddenly dry up like official
traveler
investment monies. Actually, they increase in order to ease the
hardship and suffering of the migrants’ families and, unlike
7. upheaval (n) =
development aid, which is channelled through government or disruption, turmoil,
other official agencies, remittances go straight to those in chaos
8.insurance (n) =
need. Thus, they serve an insurance role, responding in a coverage, protection,
countercyclical way to political and economic crises. assurance;

D
This flow of migrant money has a huge economic and social
impact on the receiving countries. It provides cash for food,
housing and necessities. It funds education and healthcare and
contributes towards the upkeep of the elderly. Extra money is
sent for special events such as weddings, funerals or urgent
medical procedures and other emergencies. Occasionally it
becomes the capital for starting up a small enterprise.

E
Unfortunately, recipients hardly ever receive the full value of
the money sent back home because of exorbitant transfer fees.
Many money transfer companies and banks operate on a fixed
fee, which is unduly harsh for those sending small sums at a 9. exorbitant (adj) =
excessive, inflated,
time. Others charge a percentage, which varies from around
outrageous
8% to 20% or more dependent on the recipient country. There 10. affiliation (n) =
are some countries where there is a low fixed charge per connection,
transaction; however, these cheaper fees are not applied association, alliance
internationally because of widespread concern over money 11. extortionate (adj)
laundering. Whether this is a genuine fear or just an excuse is = excessive,
exorbitant
hard to say. If the recipients live in a small village somewhere,
outrageous
usually the only option is to obtain their money through the
local post office. Regrettably, many governments allow post
offices to have an exclusive affiliation with one particular
money transfer operator so there is no alternative but to pay
the extortionate charge.

F
The sums of money being discussed here might seem
negligible on an individual basis but they are substantial in
totality. If the transfer cost could be reduced to no more than
one per cent, that would release another $30 billion dollars 12. negligible (adj) =
annually – approximately the total aid budget of the USA, the insignificant, minor,
largest donor worldwide – directly into the hands of the trivial; so small
world’s poorest. If this is not practicable, governments could at 13. substantial (adj) =
least acknowledge that small remittances do not come from significant,
considerable
organised crime networks, and ease regulations accordingly.
They should put an end to restrictive alliances between post
offices and money transfer operators or at least open up the
system to competition. Alternatively, a non-government
humanitarian organisation, which would have the expertise to
navigate the elaborate red tape, could set up a non-profit
remittance platform for migrants to send money home for little
or no cost.

G
Whilst contemplating the best system for transmission of
migrant earnings to the home country, one should consider the
fact that migrants often manage to save reasonable amounts of
money in their adopted country. More often than not, that 14. bank deposit (n) =
savings, funds,
money is in the form of bank deposits earning a tiny
balance
percentage of interest, none at all or even a negative rate of 15. interest (n) =
interest. return, profit, yield

H
If a developing country or a large charitable society could sell
bonds with a guaranteed return of three or four per cent on
the premise that the invested money would be used to build
infrastructure in that country, there would be a twofold
benefit. Migrants would make a financial gain and see their 16. bond (n) =
security, debenture,
savings put to work in the development of their country of
obligation
origin. The ideal point of sale for these bonds would be the 17. conduit (n) =
channel used for money transfers so that, when migrants show channel, pipeline,
up to make their monthly remittance, they could buy bonds as medium
well. Advancing the idea one step further, why not make this
transmission hub the conduit for affluent migrants to donate 18. affluent (adj) =
wealthy, rich,
to worthy causes in their homeland so they may share their
prosperous
prosperity with their compatriots on a larger scale?
19.prosperity (n) =
wealth, success,
affluence
20. compatriot (n) =
fellow citizen,
countryman
Questions 8–13

Complete the summary below.

Choose NO MORE THAN TWO WORDS from the passage for each
answer.
Write your answers in boxes 8–13 on your answer sheet.

Countries are unwilling to enforce lower transaction fees as they are

worried about 8………………......, and villagers lose out when post
offices have a special relationship with one particular money transfer
agency.
Each remittance might be small but the total cost of remittance fees is
huge. Governments should 9….....…………….. on small amounts and
end the current post office system or make it more competitive.
Another idea would be for a large non-profit association, capable of
handling complicated 10…….....………….. to take charge of migrant
remittances.
Migrants who send money home are able to save money, too, but it
receives little or no interest from 11……....…………… If a country or
organisation sold bonds that earned a reasonable rate of interest for
the investor, that money could fund the development of homeland
12………….....……… The bonds could be sold at the remittance
centre, which could also take donations from 13..…......…………….. to
fund charitable projects in their home country.