Do you ever think about how to send money to Pakistan? In this article, we will take a look at how remittances serve the third world economies and also how their resilience helps the developing economies.
We will now take a brief look at its background.
Background:- People belonging to third world countries always find it difficult to have sustainable financial resources which makes it difficult for them to make ends meet in a decent manner. This pushes them into the vicious poverty cycle, to break which they travel to other countries for better opportunities.
This turns them into expatriates, forming a large diaspora worldwide and their money transfer to Pakistan and back home countries for the purpose of leading a financially viable life.
The last decade recorded an increase in the flow of remittances with these flows still increasing when Covid-19 struck towards the end of 2019. Third world economies were nosedived because of the shutting down of economic activity resulting from lockdowns and social distancing.
But, gradually, the economic activity in the third world countries is resuming after the launch of the Covid-19 vaccine, and remittances are again reviving.
Let’s now take a look at how remittances prove to be a lifeline for third world economies.
A few statistics:- The World Bank noted that remittances account for one-third of the total global external finance; one-sixth of the world’s population is indirectly benefiting from remittance flow; for a few third world countries, remittances account for over 35% of their GDP with Tajikistan 45%; Moldova 38%; Lesotho 29%; Tonga35% and Hondura 25%, to name just a few.
Enhanced living standard:- Remittances enable recipients to improve their standard of living by spending more openly and viably on food, clothing and education etc., which is quite hard for third world people without remittance flow.
Income inequalities:- Online money transfer to Pakistan and other developing countries help bridge gaps between incomes whose difference is quite visible in urban and rural dwellings.
Corruption marginalized:- Since remittances are a household-to-household affair, these funds leave little room for interference by other channels to pass through. This helps eradicate corruption because their transfers are pretty simple and direct.
Investment opportunities:- Remittances help recipients invest in business opportunities and this is one of the biggest points which make remittances a lifeline for the third world economies; because every business does not operate in a vacuum and alone. With an investment in s single business, many industries swing into action, and job opportunities are created. The example of construction will suffice to explain this point.
Financial flow:- Remittances help economies keep flowing and even maintain their flow. Because people tend to circulate the money they receive as remittances through investments as remittances make up for hefty amounts after being converted into the local currencies of recipients.
Conclusion:- From all of the above, we can clearly conclude that it is mainly due to the remittances flow into the third world economies that they keep floating. They take little time to transfer, given the latest ways for the international transfer of funds. There are many more benefits of remittances but the ones detailed out above are sufficient to help us understand the importance of remittances even if you wish to send money to Pakistan online through ACE Money Transfer Company for exceptional service quality.