Indeed, remittance flows are increasingly important relative to other foreign exchange-earning activities, representing around 14 percent of GDP, 70 percent of exports, and 33 percent of imports. Italy is the major migration destination country for Albanians. On the other hand, Albania is the number one recipient country in terms of remittance flows from Italy to other countries. Therefore, remittance services from Italy to Albania have become a topic of great interest. The Italian-Albanian remittance corridor is a relevant case to examine the effects of remittances on local communities and to discuss the ways of making these flows more efficient and less costly. A recent survey of the Bank of Albania shows that remittances have had positive impact across all Albanian regions. The influence is slightly higher in less developed regions alleviating to some extent income disparities. Remittances have become a critical source of income for households, reaching 33 percent of disposable income of an average family recipient and almost 40 percent in rural areas. The recipients of remittances are from all social groups, including middle income class (60 percent) as well as the low income class (27 percent). Our estimates show that the level and severity of poverty are significantly reduced among those households receiving remittances, with greater influence on severity rather than the level of poverty. Remittances are mostly used for imported consumer goods, services, and for the purchase or construction of houses. A small share is saved or invested in businesses, mainly in agricultural sector.

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.