Following the escalation of the conflict in Ukraine, over 1,000 Ukrainian diaspora organizations have supported initiatives including collecting food and clothes, sending money to buy basic items as well as raising funds to rebuild their country. Remittances to Ukraine grew to $18.4 billion in 2022, over three times the size of the foreign direct investment and a multiple of the ODA.

Likewise, diasporas from neighbouring countries, such as Hungary, Moldova and Poland, have mobilized resources to support the hosting of Ukrainian refugees in their native countries. Through hometown associations created with the support of UNDP and the Swiss government, the Moldovans abroad contributed up to $160,000 to help their communities at home respond to the crisis, which included both financial and in-kind help.

In a very different context, remittances from friends and relatives abroad help reduce the distress caused by droughts and food shortages.

"I don't know how my family would have survived if my son and daughter hadn't sent $450 in remittances every month. We would have died if they hadn't made it to Europe,” said Halimo Abukar Jama, a 57-year-old mother of nine children who has lived through Somalia's civil war.

Remittances have contributed to household expenses and act as a form of insurance for Somali households facing shocks to their income and livelihoods. With the acceleration of the adverse impacts of climate change and environmental degradation, remittances will play an increasing role in supporting economies and societies affected by disasters.

Abdirashid Duale is the CEO of Dahabshil, Africa's Largest Money Transfer Company.

“Remittance services are keeping people alive in this time of unprecedented drought, exacerbated by the effects of climate change and conflict. People suffering from dwindling food supplies and skyrocketing prices would not be able to survive without the generosity of family and friends abroad,” he said.

To support families back home, migrants need decent work, to be integrated into their host communities, to have access to services, and to have social protection. It is more difficult for undocumented migrants or those working informally to benefit from a stable source of income that will enable them to send remittances home. Efforts to provide documentation to migrants in host countries and promote access to decent work and social protection are crucial to foster their socio-economic integration, but also for them to support their families and communities back home. Migrants cannot contribute fully, nor can development be sustainable, if they are not treated with equality and inclusion, with their rights fully respected.

Sending remittances can also be difficult and costly. The Global Compact for Safe, Orderly and Regular Migration, in its Objective 20, calls on the global community to “promote faster, safer and cheaper transfer of remittances and foster financial inclusion of migrants”. The Sustainable Development Goals (SDG), adopted in 2015 as part of the UN Agenda 2030 for Sustainable Development, include a target aimed to lower the cost of remittances. However, in 2021, the average cost of sending $200 remained above 6 percent, twice the SDG target of 3 percent. 

In Venezuela, for instance, remittances have been vital to poor families. “The reality that the country is living at the moment cannot be hidden. Most of the remittances are used to buy food, pay for services, buy gas for cooking and medicines,” said Carlos, a Venezuelan construction worker in San Martin, Colombia. Because of the lack of formal channels, Carlos has to pay a 20 percent commission to send remittances through informal channels. This money, which would be vital in alleviating poverty at home, only benefits intermediaries.

The lack of formal channels is also a serious issue in Afghanistan. With 5.9 million Afghans abroad according to mid-2020 UN Population Division estimates and 97 percent of the population at risk of sinking into poverty inside the country, remittances help struggling families survive. However, after the takeover of the government by the Taliban in August 2021, the United States froze $7 billion of Afghan reserves, while the International Monetary Fund (IMF) shut off the financing system. The country’s liquidity crisis has left the banking and financial system in disarray and remittances in a parlous state.

"Most of the remittances are used to buy food, pay for services, buy gas for cooking and medicines,” - Carlos, migrant worker