Remittances more than twice Swiss foreign aid

Remittances play a very important role in developing countries Keystone

Foreign workers in Switzerland sent some CHF6.5 billion ($6.8 billion) back to their home countries last year, more than twice the amount covered by Swiss development aid, according to the Federal Statistics Office.

The amount of such money transfers from Switzerland nearly doubled between 2003 and 2013, data from the statistics office and the World Bank show. However, they were only able to count information from “formal” money transfer sources such as banks, post offices and money transfer agencies like Western Union.

Experts believe that remittances sent through informal channels could account for more than half of that of officially-recorded money transfers.

Despite money transfer services becoming less expensive, senders pay on average 7.6% of the total amount to transfer their money home, according to the World Bank.

The money that migrants send back to their countries of origin are used primarily to cover basic needs. The importance of remittances is gaining recognition and are they are now an indicator of the MONET system, which is used to measure progress in sustainable development.

However, the statistics office does not deny that these transfers can affect the autonomy of the local economy and encourage authorities to hold back important economic and social reforms in their countries. Remittances may also increase social inequalities and make migration to wealthy countries more attractive.