Ardian Fullani: Remittances: An opportunity for growth - the Albanian migration to Italy as a case study Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the Conference on Remittances, Bari, 4 March 2006. *  *  *  Ladies and Gentlemen, I am very pleased to speak to you today on the occasion of the Conference on Remittances. I would like to congratulate the World Bank and the Puglia Region for co-organizing this esteemed international event. I greatly appreciate your partnership and this opportunity to explore with you the possible ways for a sustainable growth, formalization and higher effectiveness of remittances. I would like to open my remarks by asking a simple question. Why are remittances our main topic today? Remittances represent the most direct and immediate benefit to emigrants families and to the economy. Remittance flows to developing countries are now estimated to be twice as much as the development aid these countries receive. In some countries like Albania, they noticeably exceed foreign direct investment. Therefore, governments nowadays are paying more and more attention in their development strategies to remittance flows as an important financial source to boost economic development, especially in depressed areas where economic conditions force people to migrate. A key input for these policies is the economic and the logistic framework behind migration and remittance. This conference and its underlying case-study make a great contribution to these developing efforts. Since the beginning of the transition, the volume of remittances to Albania has grown rapidly.

First, improving our knowledge about remittances remains critical for the assessment of policies, which directly impact the developing role of remittances in the economy. The improved information is needed not simply to assist policies on remittances but also financial infrastructure (e.g. by reducing transaction costs) and to understand the impact on poverty. The Bank of Albania has continuously emphasized the importance of accurate estimation of capital inflows in the form of emigrants’ remittances. For better statistics we have been assisted by IMF missions to bring the methodology in defining remittances closer to the international standards. Also, there is a close cooperation with our main economic partners, Italy and Greece, as the main destinations of the Albanian emigrants, to harmonize our methodologies in order to improve the estimation accuracy of remittances. The report of the World Bank on the Italian-Albanian corridor is also a great contribution to improve our understanding of remittances, and on behalf of the Albanian authorities I express our gratitude for this support. Second, formalizing the inflow of remittances is a very important moment. More than half of remittances enter the country through informal channels. Our surveys show that the bulk of remittances to Albania are channeled through unofficial sources; physically brought by the emigrants (59 percent), friends and relatives (23 percent). This is partially a reflection of the short geographical distance between the two countries. However, this high flow of remittances through unofficial channels also asks for actions to make official channels more attractive in terms of efficiency, safety, cost and anonymity.