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1. Introduction The volume of remittances to developing countries has grown significantly in recent years: the total value flowing through official channels worldwide more than doubled between 1998 and 1999 (Gammeltoft, 2002; Ratha, 2003; McKinley, 2003). Developing countries receive an estimated US$80 billion annually in remittances (Ratha, 2003). However, the total amount remitted is much higher than these figures because a large number of transactions are carried through informal channels. Remittances have become the second largest source of external funding in Africa after direct foreign investment (DFI) and ahead of official development aid (ODA). They are therefore an important source of finance and foreign exchange for many REMITTANCES AND DEVELOPMENT: THE IMPACT OF MIGRATION TO SOUTH AFRICA ON RURAL LIVELIHOODS IN SOUTHERN ZIMBABWE FRANCE MAPHOSA 8 Chapter|132| African households and nations; in fact, a number of developing countries rely more on remittances than on official aid (Gammeltoft, 2002). As van Doorn (2002a) states, remittances have the potential to create positive outcomes for migrant source areas. Unlike other forms of aid, remittances usually do not carry any obligations, constraints or preconditions and they do reach the intended beneficiaries (who are often low-income families) because of the absence of government interference (Stein, 2003). Although the focus on remittances is not a new phenomenon in migration studies (Black, 2003), they have not received much attention from policy-makers in the countries of origin (McKinley, 2003). As Taylor and Fletcher (2001) note, the complex dynamics of migration, remittances and development are among the least researched and understood topics. As a result, the development potential of remittances has generally not been fully exploited. Countries that have recognised this potential have developed strategies to encourage the flow and effective use of remittances (Lopez et al., 2001; Orozco, 2003; McKinley, 2003; Stein, 2003). While several studies on international migration from Zimbabwe to South Africa have been carried out (Paton, 1995; Sachikonye, 1998; ILO/SAMAT, 1998; Zinyama, 1990, 2000; Crush & Williams, 2002; Kanyenze, 2004) the role of remittances, especially from undocumented migrants, remains unexplored both as a research and a policy issue. Zimbabwean migrants working in South Africa, including undocumented migrants, transfer significant value to their communities of origin in the form of remittances. This is the most important source of income for many households in the southern districts of Zimbabwe. It is therefore important to recognise both the current and potential benefit of remittances to the migrants’ households and communities of origin, and to create a regulatory and policy framework and set up institutional arrangements to enhance the potential contribution to poverty reduction and sustainable development. Careful study, investigation and debate are needed to inform the development of appropriate and effective policies (McKinley, 2003, Stein, 2003). This chapter makes a contribution of this kind, intended to inform policies and help create an environment conducive to the flow and effective use of remittances sent home by Zimbabwean migrants in South Africa. 2. Defining Remittances There is no consensus on the definition of ‘remittances.’ This makes it difficult to estimate the total value of remittances transferred to a particular country or region (Taylor & Fletcher, 2001). Many definitions confine remittances to cash or financial transfers. While the term ‘remittances’ usually refers to cash transfers only, remittances can also be in kind (van Doorn, 2002b). Adams (1991) adopts this inclusive definition and defines remittances as ‘money and goods’ that are transmitted to the households back home by people working away from their communities of origin. Taylor and Fletcher’s (2001) definition is even broader, as it includes monetary or cash transfers and other transfers such as consumer goods, capital REMITTANCES AND DEVELOPMENT: THE IMPACT OF MIGRATION TO SOUTH AFRICA ON RURAL LIVELIHOODS IN SOUTHERN ZIMBABWE|133| goods and skills and technological knowledge. In this chapter, the term ‘remittances’ is used in this broad sense and includes both cash and non-cash remittances. This definition makes it possible to fully appreciate the migrants’ contribution to the welfare of their non-migrant relatives and their communities of origin. Remittances can be formal or informal depending on the channel through which they are transferred. Formal remittances are those sent through official channels such as bank transfers and money transfer organisations, and informal ones are those sent through unofficial channels such as private money couriers, friends and relatives, or taken home by the migrants themselves (Meyers, 1998; McKinley, 2003; Orozco, 2003). The official channel for sending remittances depends on a number of factors, such as the existence of banking and other financial...


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