Ria talks about breaking exclusivity at Global Forum on Remittances and Development

The Global Forum on Remittances and Development (GFRD) took place in Milan, Italy, June 16-19 with over 400 experts and stakeholders from the private, public, civil society and development sectors meeting to discuss the successes and challenges related to remittances and development.

Kanayo F. Nwanze, President of the International Fund for Agricultural Development (IFAD), gave an articulate opening address before H.M. Queen Máxima of the Netherlands took the lectern to deliver Her keynote speech. She spoke of the vital role that remittances play in developing economies and what can be done to further harness these flows.

Queen Maxima

Queen Máxima of the Netherlands gave a keynote address on the opening day of the Global Forum of Remittances and Development in Milan, Italy.

Queen Máxima – a self-proclaimed migrant who left her home country of Argentina at the age of 24 – spoke eloquently in Her capacity as the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) and Patron of the first International Day of Family Remittances. The industry needs more spokespeople like Queen Máxima!

The first International Day of Family Remittances, an initiative proclaimed by all 176 member states of IFAD, was also celebrated on June 16 and sought to recognise families and the estimated 250 million migrants that live outside of their country of birth.

IFAD also released an in-depth report titled, Sending Money Home: European flows and markets (click link for report) which highlights how migrant workers in Europe were responsible for sending $109.4 billion in remittances in 2014.

One of the main findings of the report was that family members who remain in their home countries would experience greater benefits if they had access to more competitive money transfer markets and targeted financial services.

During a high-level panel on Migration and Development, moderated by well-known UK-based journalist Zeinab Badawi, discussion turned to exclusivity, lack of competition and some of the problems created by this.

This topic was picked up again during discussions on the morning panel of day two.

The panel, Global and European Remittance Markets: State of Play, moderated by DMA’s Leon Isaacs and attended by Ria’s Managing Director for EMEA & South Asia, Sebastian Plubins, opened up the way for some slightly more provocative and honest talk. Plubins was strong in his case for banning exclusivity agreements, citing examples where responsible remittance players like Ria have not been able to operate.

Sebastian on the panel

Ria’s Sebastian Plubins, (far right), spoke on the panel ‘Global and European Remittance Markets: State of Play’ about the need to break exclusivity agreements which stifle competition in the marketplace.

Although this topic was deflected by another panellist, who said that exclusivity was becoming a thing of the past, active tweeting during the panel session also seemed to indicate that despite what some people believe, there is a still a lack of competition in some sectors and countries.

As cited in previous blogs, the post office is a key channel for the delivery of remittances to rural areas. The IFAD report under the section Competition in the Industry (page 15) also touches on this, saying: “In some countries, exclusivity agreements or long-term partnerships with MTOs limit the potential of postal networks to stimulate cost competition by leveraging their countrywide outreach.”

Dilip Ratha from the World Bank was also at the GFRD to present his $100 billion dollar idea about ways to improve the remittance industry by reducing costs, harnessing diaspora savings via diaspora bonds and reducing recruitment fees paid by low-skilled migrant workers. By targeting these areas, he says these alone could account for $100 billion in savings.

Online money transfer services, mobile technology and mobile wallets also formed part of the conversation over the four days, with the balance between innovation and regulation cited as one of the main factors which can hinder the adoption of new technology.

While some sessions were livelier and more thought-provoking than others, overall the forum provided a good space for open dialogue and the opportunity to form potential partnerships while strengthening alliances between all sectors.

Ria staff

Ria staff from the US, UK, Spain and Italy attended the Global Forum on Remittances and Development.