The Diaspora: Cause and Effect
Emerging technologies and globalization trigger the search for workers anywhere around the world best suited for the jobs at hand. Migrant workers from poor and developing countries fill up most of the labour force that comprises the infrastructure, agriculture, and manufacturing industries of rich and developed nations. The International Labor Organization reports that one country being looked up to as a model of regulated labor migration is the Philippines, where 10 million Filipinos live abroad and more than 1 million leave the country each year to work overseas seeking a better future for their families who are left behind.
OFWs, or Overseas Filipino Workers, form one of the largest ex-pat workers in the world. A relatively small Asian nation territorially with a population of less than 110 million, the Philippines is running a strong third behind only India and China as reflected in terms of inward remittances on a global scale.
According to the World Bank Remittances Data of 2019, a total of USD 33.167 Billion was sent home by OFWs, of which 37.6% of remittance flows came from the United States or to the staggering tune of USD 12.6 Billion. Other remittances were sourced from Saudi Arabia, Singapore, Japan, United Arab Emirates, the United Kingdom, Canada, China’s Hong Kong Special Administrative Region, Germany, and Kuwait. Tradition holds the US and the Middle East as favored by OFWs but latest trends suggested a shift towards Canada and the Scandinavian regions due to their higher lifestyle indices.
The money that Filipinos send home from their adopted countries accounts for 9.9% of the country’s annual GDP and has thus become the single most important source of foreign exchange, overtaking electronics, and spurring an increase in domestic consumption and a robust economic growth.
Remittances: the driving force behind families and world economies
Economist Dilip Ratha, who manages the Migration and Remittances Team at World Bank, was the first to analyze the global significance of remittances, that is, money sent from foreign workers to their families back home. Once a poor migrant himself, he said that millions of people migrate every year. With the help of the family, they cross oceans, deserts, rivers, and mountains, to the point of risking their lives even for reasons of realizing a simple dream of finding a decent job somewhere and sending money back home to help the family. The United Nations estimated the number of migrants globally reached 272 million, increasing to 51 million more since 2010. International migrants represent 3.5 % of the global population, and its proportion to the world population is steadily rising. Most of these migrants come from poor countries, and they send money home regularly, Ratha said. Statistics coming from the World Bank’s Migration and Development Brief of 2019 revealed USD 529 Billion in remittances were sent to middle-and-low income countries in 2018, which showed an increase of 9.6% in remittances over the previous record high in 2017 of USD 483 Billion. It hovers giant over the USD 344 Billion in foreign direct investment to these countries in 2018, excluding China. Accordingly, the Migration Policy Institute recorded that remittances contributed more than 10% of Gross Domestic Product in 24 countries and more than 20% in 9 countries. Studies also indicated that remittances have huge effects on the reduction of poverty in recipient countries. Unlike development aid money, Ratha observed, which still must pass through snail-paced bureaucratic channels, remittances go directly to recipient families who need them, which immediately creates an impact. To poor countries, remittances are a lifeline. And its value cannot be underestimated.
Counting on EURST to save the day
Adding to the woes of migrant wage workers sending meager sums of hard-earned money home from their host country are barriers regularly encountered such as the exorbitant fees leveled by many international money transfer companies and traditional financial institutions, or the post office, that eke out a substantial amount at a fixed price, regardless of the amount sent, such that a $30 fee is charged whether its $500 or $200. Global interest averages at 8%, of which, say, a 100 dollar remittance ends up at 92 dollars in the hands of recipient families. Remittances to Africa are charged 12% and a dizzying 20% across African nations. Most migrant workers in Asia send home approximately 180euro monthly, but they must pay 10euro in international transfer fees – half a day’s wages gone for many.
The development of stablecoins comes right at a time when international financial policies seem to be polarized by different financial variables, the volatility of Bitcoin and other digital currencies, and the inflationary nature of the fiat. The advent of the blockchain technology and the accompanying cryptocurrencies demonstrated positive viabilities in solving the remittance problem. However, stablecoins have much to say about lowering fees, even more, owing to its commitment to price stability. Here comes EURST.
EURST is a stablecoin owned and managed by Wallex uniquely characterized by the volatile-free and stable valuation of fiat currency and the fast and secured blockchain technology of a cryptocurrency. It is a cryptographic token fully backed up by a fiat reserve built on the Ethereum network with ERC20 standards. A 1EURSTABLECOIN represents units of 1euro equivalent to the monetary value of the USD, which is electronically stored utilizing distributed ledger technology (DLT) for public real-time auditing system. The opening of Wallex Custody accounts makes sure customers will benefit by the privacy and security it offers while maintaining fluidity in the deposit, transfer, or withdrawal of personal funds convertible to any currency of choice in just a matter of minutes across borders.
The blockchain processing of funds particularly remittances will free a migrant worker of unnecessary headaches posed by incumbent money transfer facilities with deficient and obsolete structures causing high fees, delays, and limited customer service hours.
When a 500 billion dollar remittance industry is coursed through new efficient channels such as Wallex Trust and EURST, expect low fees to equal billion-dollar savings and a high-yielding economic growth for developing countries with a more direct inflow and outflow of remittances with the opening and maintenance of custody accounts, management of assets, owning stablecoins and other cryptocurrencies, and engagement into micro-business ventures, that will lead to the eventual enhancement of sustainable living conditions and family welfare long dreamt by migrant workers.