It is beyond the scope of this study to discuss the effectiveness and adequacy of countries’ surveys to measure remittance flows. This is a topic that needs to be analyzed separately. However, it is important to note that because most countries do not measure remittances that occur through informal channels, it is not possible to estimate the total value of remittances that developing countries receive every year through those means. Moreover, because in most countries not even an estimate of this type of flow is incorporated in balance of payments statistics, the value of workers’ remittances is probably under-reported.

Although some efforts are currently underway in some of the countries covered in the survey to improve remittance statistics (see Annex 3), much more effort is required. National statistics on remittances are expected to provide comprehensive data on the value and composition of remittances that countries receive every year, covering all different types of instruments and channels through which migrants send money to their home countries. Moreover, statistics on remittances are important for the formulation of macroeconomic policy, especially for countries with a large part of their population living abroad, because large remittance inflows can affect the level of savings, investment and consumption. Remittance data also constitutes a basic instrument for government and non-government agencies that seek to improve the living conditions of senders and beneficiaries of incoming remittances. Furthermore, data on remittances constitutes an important tool to monitor crossborder flows of money and timely detect money-laundering or other illicit activities that may undermine the integrity of a financial system.

Recently, thanks to major improvements in the way remittance data is collected, some developing countries (e.g. Mexico) are starting to realize that the value of remittances they receive every year is actually much more than they had previously thought (see Box 1 below). Moreover, better remittance data is encouraging authorities in developing countries to develop new policies to maximize the developmental impact of those flows by increasing the availability of savings and investment instruments for senders and recipients of remittances. For instance, in some countries in Latin America poor families can use their regular remittance income as the basis to acquire life and non-life insurance products, and become eligible for housing financing and consumer credit, which may help them improve their living conditions. Also, recent studies suggest that better remittance data has encouraged an increasing number of private financial institutions –especially international banks -- to enter into the remittance market or offer new financial products to serve the needs of senders and recipients of remittances (see Raul Hernandez-Coss, 2004).

At an international level more guidance is needed to improve the existing tools to collect data on remittances. In particular, there is a need to establish homogeneous reporting requirements across countries that do not undermine the competitive position of market players, especially small institutions. In addition, there is a need to develop better tools to measure remittance transactions that occur through increasingly sophisticated financial instruments, such as dual debit cards, store-value cards and other card-based transactions, as well as remittances that occur through informal channels.

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