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ABSTRACT
After the 2001 9/11 terrorist attacks in New York, attention to informal migrant remittance flows were increasingly seen as a tool for terrorism financing due to their lack of oversight. After increased regulation was deemed to have the adverse impact of reducing the appeal of formal alternatives, security scholars and practitioners resorted to formalisation policies through transfer fee reductions that make formal options more accessible. In international development circles, similar policies gained traction. International commitments, such as the Sustainable Development Goals (SDG 10c) and objective 20 of the 2018 Global Compact for Safe, Orderly and Regular Migration, aim to lower transfer fees to promote remittance growth and alleviate poverty. This article scrutinises the shift in remittance policy framing, primarily driven by security concerns, to promote development. Findings suggest the 9/11 terrorist attacks provided the punctuation that gave institutions the policy tractability to act upon pre-existing privatisation motives within Bretton-Woods institutions. The findings contribute to the understanding of policy creation and the cross-pollination of policies in the security-development space.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1. World Bank, World Development Indicators Database.
2. Kapur, ‘Remittances: the New Development Mantra’.
3. Passas, ‘Fighting Terror with Error’.
4. Adams and Page, ‘Do International Migration and Remittances Reduce Poverty’.
5. Straubhaar and Vâdean, ‘International Migrant Remittances’.
6. Amuedo-Dorantes and Pozo, ‘Remittances and Income Smoothing’.
7. Mohapatra and Ratha, ‘Forecasting Migrant Remittances’.
8. IMF, International Transactions in Remittances Guide. Hawala, Arabic for transfer, is a system, or informal network, for transferring money traditionally used in the Muslim world, whereby the remittance funds (along with the associated fees) are transferred to an agent who proceeds to instruct a remote associate in the destined region to pay the final recipient. Technically, only domestic transfers need take place.
9. De Goede, ‘Hawala discourses’; Roth et al., National Commission on Terrorist Attacks.
10. Brown, ‘Hidden Foreign Exchange Flows’; Puri and Ritzema, Migrant Worker Remittances.
11. Horst, ‘The Transnational Political Engagements of Refugees’.
12. Hernández-Coss, The US-Mexico Remittance Corridor; Hernández-Coss and Bun, The UK-Nigeria Remittance Corridor; Kupets, The Development and the Side Effects of Remittances.
13. Marangos, ‘What Happened to the Washington Consensus?’; Williamson, ‘A Short History of the Washington Consensus’.
14. Barnett and Finnemore, ‘The Politics, Power, and Pathologies of International Organizations’.
15. Sabatier and Jenkins-Smith, Policy Change and Learning.
16. Orozco and Klaas, Money Transfers to Venezuela.
17. Pieke et al., ‘Beyond Control?’.
18. Choucri, ‘The Hidden Economy’; Medina and Schneider, Shadow Economies.
19. Passas, Informal Value Transfer Systems.
20. Pieke et al., ‘Beyond Control?’.
21. O’Neill, ‘Emigrant Remittances’.
22. Dimbuene and Turcotte, Study on International Money Transfers.
23. Chisasa, ‘Nature and Characteristics of Informal Migrant Remittance Transfer Channels’.
24. Orozco, ‘Globalization and Migration’.
25. O’Neill, ‘Emigrant Remittances’.
26. Sander, ‘Capturing a Market Share’.
27. Kupets, The Development and the Side Effects of Remittances.
28. Ferriani and Oddo, ‘More Distance, More Remittance? Remitting Behavior, Travel Cost, and the Size of the Informal Channel’.
29. Sander, ‘Capturing a Market Share’; Orozco, Worker Remittances in an International Scope.
30. Puri and Ritzema, Migrant Worker Remittances; Maimbo, The Money Exchange Dealers of Kabul; Freund and Spatafora, ‘Remittances, Transaction Costs, and Informality’.
31. Kosse and Vermeulen, ‘Migrants’ choice of remittance channel’.
32. El Qorchi, Maimbo and Wilson, Informal Funds Transfer Systems; Maimbo, The Money Exchange Dealers of Kabul; Passas, ‘Fighting Terror with Error’.
33. Beyer et al., Measuring Districts’ Monthly Economic Activity; Medina and Schneider, ‘Shadow Economies’.
34. Jack and Suri, Mobile Money; Orozco, Klaas and Ledesma, The Remittance Marketplace in 2019; Dimbuene and Turcotte, Use of e-Money Transfer Methods; Rodima-Taylor and Grimes, ‘Cryptocurrencies and Digital Payment Rails’.
35. Rodima-Taylor and Grimes, International Remittance Rails.
36. Bertram, ‘The MIRAB Model’; Carment, Nikolko and MacIsaac, ‘Mobilizing Diaspora During Crisis’.
37. Orozco, Remittances to Latin America.
38. De Haas, ‘Remittances and Social Development’.
39. Tanaka and Keola, ‘Shedding Light on the Shadow Economy’.
40. De Haas, ‘Remittances and Social Development’.
41. Taylor et al., ‘Remittances, Inequality and Poverty’; Acosta et al., ‘What is the Impact of International Remittances’; Vacaflores, ‘Are Remittances Helping Lower Poverty’; Arapi-Gjini, Möllers and Herzfeld, ‘Measuring Dynamic Effects of Remittances’; Azizi, ‘The Impacts of Workers’ Remittances’.
42. Lucas and Stark, ‘Motivations to Remit’; Stark and Lucas, ‘Migration, Remittances, and the Family’.
43. Poirine, ‘A Theory of Remittances’.
44. Amuedo-Dorantes, ‘The Good and the Bad in Remittance Flows’.
45. Ketkar and Ratha, ‘Diaspora Bonds’.
46. Harris and Todaro, ‘Migration, Unemployment and Development’.
47. Sinning, ‘Determinants of Savings and Remittances’; Unheim and Rowlands, ‘Micro‐Level Determinants of Remittances’.
48. Pieke et al., ‘Beyond Control?’.
49. For example, the Financial Action Task Force on Money Laundering was active on this file.
50. Heng and McDonagh, ‘The other War on Terror Revealed’; Vlcek, ‘Securitizing Money to Counter Terrorist’.
51. De Goede, ‘Hawala discourses’; Roth et al., National Commission on Terrorist Attacks; National Commission on Terrorist Attacks upon the United States, The 9/11 Commission Report.
52. Choucri, ‘The Hidden Economy’; Brown, ‘Hidden Foreign Exchange Flows’; Puri and Ritzema, Migrant Worker Remittances.
53. Clemens and McKenzie, Why Don’t Remittances Appear to Affect Growth.
54. Seddon, Informal Money Transfers.
55. Financial Action Task Force, Special Recommendations on Terrorist Financing.
56. Vlcek, ‘Securitizing Money to Counter Terrorist Finance: Some Unintended Consequences for Developing Economies’.
57. Choucri, ‘The Hidden Economy’.
58. Passas, Informal Value Transfer Systems.
59. Cirasino and Hollanders, General Principles for International Remittance Services.
60. Puri and Ritzema, Migrant Worker Remittances.
61. Buencamino and Gorbunov, Informal Money Transfer Systems; Page, ‘Three Issues in Security and Development’; Passas, ‘Fighting Terror with Error’.
62. Baumgartner, Jones and Mortensen, ‘Punctuated Equilibrium Theory’.
63. Passas, ‘Fighting Terror with Error’.
64. Keohane and Nye, Power and Interdependence.
65. O’Connor and Summers, Redefining the Landscape of Payment Systems.
66. International Fund for Agricultural Development and the World Bank, The Use of Remittances and Financial Inclusion.
67. World Bank, ‘Migrants’ Remittances from the United Kingdom’.
68. Department for International Development, Sending Money Home?
69. Maimbo and Ratha, Remittances: Development Impact.
70. Shelburne and Palacín, Remittances in the CIS.
71. Cirasino and Hollanders, General Principles for International Remittance Services.
72. Khanal and Todorova, ‘Remittances and Households in the Age of Neoliberal Uncertainty’; Pellerin and Mullings, ‘The “Diaspora Option”, Migration and the Changing Political Economy of Development’.
73. Adams and Page, ‘Do International Migration and Remittances Reduce Poverty’.
74. Rosenzweig, ‘Consequences of Migration’.
75. Dade, The Privatization of Foreign Development Assistance; De Haas, ‘International Migration, Remittances and Development’.
76. Bell, ‘Do we Really Need a New “Constructivist Institutionalism”’.
77. Marangos, ‘What Happened to the Washington Consensus?’; Williamson, ‘A Short History of the Washington Consensus’.
78. Kapur, ‘Remittances: the New Development Mantra’.
79. Orozco, ‘Globalization and Migration’; Mohapatra and Ratha, ‘Forecasting Migrant Remittances’.
80. Rosenzweig, Consequences of Migration.
81. Ratha, ‘The Hidden Force’.
82. Stark et al., ‘Migration, Remittances, and Inequality’.
83. Pieke et al., ‘Beyond Control? The Mechanics and Dynamics of “Informal” Remittances’.
84. Sabatier and Jenkins-Smith, Policy Change and Learning.
85. Page, ‘Three Issues in Security and Development’.
86. Straubhaar and Vâdean, ‘International Migrant Remittances’.
87. Dolowitz and Marsh, ‘Learning from Abroad’; Marsh and Sharman, ‘Policy Diffusion and Policy Transfer’.
88. Oklahoma Tax Commission, Annual Report. Oklahoma taxes international remittances (wire-transfers) in the order of five dollars for first 500 sent and one per cent of the volume sent thereafter. The taxation revenues are labelled as ‘Drug Money Laundering & Wire Transm. Rev. Fund’ in the 2019 (fiscal year of 1 July 2018 to 30 June 2019) Annual Report.
89. Ratha et al., ‘Why Taxing Remittances is a Bad Idea’.
90. Mohapatra and Ratha, ‘Forecasting Migrant Remittances’.
91. Jewers and Orozco, Migrants, Remittances and Covid-19.
92. United Nations, How COVID-19 is Changing the World.
93. World Bank, World Bank Predicts Sharpest Decline; The Economist, Covid-19 has Squeezed Migrants’ Remittances; Karim, Islam and Talukder, ‘COVID-19′s Impacts on Migrant Workers’.
94. Central Bank of Kenya, Diaspora Remittances.
95. Bisong, Ahairwe and Njoroge, The Impact of COVID-19.
96. El Qorchi, Maimbo and Wilson, Informal Funds Transfer Systems; Maimbo, The Money Exchange Dealers of Kabul; Passas, ‘Fighting Terror with Error’; Amuedo-Dorantes and Pozo, ‘On the Use of Differing Money’; Kosse and Vermeulen, ‘Migrants’ choice’.
97. Guermond, ‘Contesting the Financialisation of Remittances’.
Additional information
Notes on contributors
Samuel MacIsaac
Samuel MacIsaac is a PhD candidate at the Norman Paterson School of International Affairs (NPSIA), Carleton University. His research focuses on Canadian immigration trends, remittance and migration behaviour, forced migration in conflict zones, and other trends in international affairs.