Keywords

Remittances are often told as a success story and, in general, remittance research contributes to this exuberant representation of transnational transactions. There is, of course, another side to this story and remittance research also addresses the human costs of remitting and the challenges it poses to personal relationships (e.g. Åkesson 2011; Carling 2014; Erdal 2014; Lindley 2010; Rahman and Fee 2012). However, embedded in the field of policy making and remittances economies, the consistency and uniformity in the master narrative of successful development are not surprising. Agencies like the World Bank and Western Union do not tire in promoting the universal account of development through remittances, and like most powerful narrators, they are not wrong to stress the positive effects of the enormous amounts of money that support and advance struggling regions and neglected areas. Worldwide, the sum of private money transfers is more than three times as high as official development aid. In 2022, global financial transfers were estimated to a record high of USD794 billion, the unofficial sum even surpassing this figure considerably (World Bank 2020, 2022).

Introduction: Two Sides of the Same Remittance Coin

The significance of these transfers for migrants’ families and the countries of origin is beyond question: Remittance transfers improve living conditions, provide food, clothing, housing, and transportation, and facilitate access to education and health services. On the individual level, remittance actors are bolstered through this cross-border exchange and they find ways to express multiple belongings, as the examples of Mura, Odermatt, and Ströhle have demonstrated in this volume. The financial flows can free unbanked households from credit constraints and enable the accumulation of capital, as Suri and Jack (2016) show for the money transfer service M-PESA and especially for their credit service M-Shwari. Using these mobile money services has introduced unbanked parties into the formal financial system and, as a consequence, has lifted 2 percent of households or a total of 194,000 households in Kenya out of poverty. Furthermore, political remittances can influence non-migrant communities by promoting peacebuilding processes (Alluri in this volume), political participation, democratic rights, and gender equality. Remitting as a social practice has multifaceted impacts on the involved actors and produces a specific migrant subjectivity of being a loyal provider, a patriotic investor, a keen modernizer, or an avid keeper of traditions (Meyer in this volume). On a meso-level, collective remittances enable the building of infrastructure like community centers and churches, support hometown associations, and connect communities between the diaspora and the homeland. Remittances enhance agriculture and further technologies for improving crops and water supplies, as Musah-Surugu and Anuga and Van Praag have shown in this volume. Technological advancements can contribute to the fight against climate change where it is needed the most. On a macro-level, remittances boost a country’s economy, attract investments, and promote economic growth. Access to foreign currencies furthermore stabilizes the national economy.

The other side of the remittance coin encompasses financial and social dependencies between migrants and their communities of origin. Migration and remittance practices can have a profound and sometimes traumatic impact on family relations, as Bajić-Hajduković and Bernard have shown with regard to different generational and class-related expectations (see also Van Hear 2014). When the money stream runs dry, the possibilities for social change toward a better life become sparse or have to be extracted from other channels. State campaigns are not always successful in channeling foreign currency toward what state officials believe is their best use (Miletić in this volume). Remittances can also lower labor force participation because recipients may be discouraged from seeking employment. Furthermore, recipients of economic and social capital flows might show less interest in developing local infrastructure and local politics, as Eric Bayala has shown for the health sector here. Household members of migrants are privileged and, sometimes, the means of support from abroad do not trickle through to the community level, thus deepening inequality in the countries of origin and increasing economic dependency on the diaspora in “the West.” Moreover, remittance-induced materialism and lifestyles in imitation of Western consumption patterns can boomerang when they lead to an increase of import rather than investing in local economies. In sum, remittances as expressions and practices of belonging need to be read with a multiscalar approach, taking into account the complexities and ambiguities related to “where things happen but also, how they are understood, which depends on the perspective of involved actors, across time, space and position” (Erdal 2020, p. 2). Only this multiscalar approach can do justice to the multitude and diversity of migration drivers: Next to economic, religious, and political factors, environmental and climate-related aspects, the sentiment of relative deprivation and being poor compared to others as well as personal aspirations and hopes for oneself and for one’s family need to be taken into account when we look at the future of migration and remittances (Bijak 2016; Czaika and Reinprecht 2020).

A Transformative Perspective on Transnational Society

In this final chapter, we add a transformative perspective on remittances and shed light on the future of transnational society in two steps. The first follows the promises of digitalization and the technological development of the remittance-scape. The second links remitting to global society in crisis with regard to the COVID-19 pandemic and climate change. Before doing so, we aim to outline our concept of transnational society and transformative perspectivation.

By transnational society, we mean a post-migrant civil society in which multiple belongings, cross-border forms of capital and mobility have become a social normality. Individuals and communities have developed routines in dwelling, working, and socializing in more than one geographical location. Today, most immigration countries experience a transformation in which affiliations, collective national identities, political participation, and equality of opportunity are being renegotiated and adjusted in a post-migrant state, thus after migration has happened and has been recognized by governments, academia, and the public as inevitable. Hereby, the prefix “post” is not meant to signify the end of migration but rather the social negotiations in the phase after migration (Foroutan 2019; Hill and Yıldız 2018; Römhild 2017). It is important to note that, for us, this notion of transnational society does not represent a cosmopolitan utopia or a political vision. It is a social reality, constituted, contested, negotiated, and reproduced in the economic, social, cultural, and political practices and narratives of migrants and non-migrants. As such, it implicates social tension and ruptures both on the level of individuals and collectives but also ways of constituting a specific transnational belonging beyond national borders.

In transnational society, remittances are a key driver of social and economic processes. Relating money transfers and social change, the following questions about future developments arise: Do we envision the remittance market as ever growing, or do we anticipate limits and disconnections in the development of transnational society (Waldinger 2015)? What are the effects of digitalization and mobile monies? How will the COVID-19 pandemic affect the strength of remittance ties? How are climate change and remittance practices related: Will the future focus be on sustainability and green remittances or on expansion and limitless growth? Do we believe in remittances as a means for everybody to participate in global wealth? Or do we fear even more division through the structural inequality in remitting? In short: Will transnational society be a place for hope or despair?

We cannot predict the future of the remittance economy (we wish!), nor can we address the vast amount of literature on this topic here. When we think “towards the future of transnational society,” we still find ourselves firmly rooted in the present, conceptualizing the future as “post-contemporary” (Avanessian and Malik 2016). The use of the future in present rhetoric, imaginaries, and regulations is the link between the status quo and envisioning society in the making. We are drawn to this future in a “teleoaffective structure” (Schatzki 2002) and through practices like anticipating, expecting, speculating, hoping, and believing (Bryant and Knight 2019). In this sense, we can read remitting itself as a future practice: Investing in transnational relations and businesses, establishing schools and community centers, building houses for return migration, securing a gravesite in family villages, or investing in one’s own repatriation also constitute future-oriented cross-border transactions.

Chakkalakal and Ren remind us that, when thinking ahead, we also need to keep in mind the past relations and logics of time and space, co-constituting colonialism and inventing concepts like “development,” “history,” and “modernity” (Fabian 1983; Mignolo 2011). Their notion of the “fallacy of developmentalism” (Chakkalakal and Ren 2021) points to a normative streak in shaping the future, which is inserted into the production of knowledge, as Bönisch-Brednich and Rupnow have demonstrated here. Yet this fallacy is also embedded in the construction and hierarchies of differences along spatial and temporal axes, as manifested in remittance relations. It is therefore important to note that the future of transnational society is not a united global vision and that it is not the future that remittance actors in New York, Washington, London, Paris, and Berlin would prefer the world to be (Mignolo 2007, p. 498)

Jørgen Carling pointed out that remittances are prone to the fallacy of developmentalism because they project the global divide into personal relationships (Carling 2014, pp. 218–219). We therefore need to view remittances as “two-sided transactions” that must be explored from a “transactional perspective” (Carling 2014, p. 227). However, to understand the impact of remittances on social groups and the built environment in the context of global power relations, we have to capture the transactions themselves as agents of change. When embedding remittances in the transactors’ relations and analyzing their cohesive as well as disruptive effects from a temporal and spatial dimension, we can generate a transformative perspective. With this focus, we aim to break with the normative underpinnings and biases of the migration-development nexus and question the modernist, Eurocentric success story of social change as progress in “Western” terms. Such a transformative perspective highlights the structural embedding of societal shifts and links them to globalized relations of power and inequality as manifested in the interplay between social, cultural, political, economic, and environmental dynamics (Amelina et al. 2016, pp. 2–3). By applying this approach to researching remittances as social practices, we aim to carve out the “complexity, interconnectedness, variability, contextuality, and multilevel mediations of global change” (Castles 2016, p. 20).

We further argue that following remittance practices is a key to analyzing the impact of transformation in its interdependence of social actors and structures. As Bivand Erdal (in this volume) demonstrated, interpreting transformation in remittance practices further allows insights into the future of transnational society. By examining the confluences of remittance money and Islamic charity as a changing remittance script with a temporal dimension and a focus on intergenerational change, she highlighted the contingency and variability of transnational transactions. Moreover, this volume shows that remittances not only mirror and reinforce social relations but also transform interior design and the material environment, houses, architecture, and landscapes (Bürkle in this volume), thereby creating new cultural practices and forms of belonging. Hence, we stress the angle of historically anchored, socially generated transformations rather than assuming change and inequality as natural and legitimate. By applying this focus, we aim to shed light on possible future developments in transnational society.

The Future of Remitting is Digital

In a first step, we will address technological development and its effects on remittance practices. We have seen that remittance practices depend upon means of communication and transfers. The temporal span from historical pocket remittances between North America and the Habsburg Empire to contemporary digital remittances worldwide is aligned with the social span and density of transnational society (Steidl in this volume). While sending letters and money across the ocean used to take time and effort, a digital transfer is now convenient and fast and thus suggests proximity and simultaneity. The social field has moved closer together, social media create a transnational sphere of communication and diaspora identity (Karner in this volume). However, it is unlikely that digitalization will result in leveling structural inequality, as we highlight in this chapter.

Financial agencies emphasize the growing influence of the customers and their demands as well as the widening of the market to include international retailers, multi-service vendors, and hub-type operators such as Amazon, Paypal, Alibaba, and Walmart, who compete with banks and money operators. Customers seek a transparent and reliable remitting experience in real time, and they want to choose their preferred payment methods and to track exchange rates in order to schedule their transactions accordingly (McKinsey and Co 2018, p. 6). However, the manner in which digitalization of remittances and biometric technologies will invade the senders’ and receivers’ private spheres will be a pressing question in the future (Kloppenburg and van der Ploeg 2020).

Sending agent locations will disappear as transactions are undertaken remotely and electronically, by remittance cards or smartphone applications. The receiving market will be split into a small section of cash-out and a larger section of electronic withdrawal. This has effects on remittance costs, which are predicted to be less than 3 percent of face value (Isaacs 2015). With lower costs, the average transaction size will decrease: People will send less money but will do so more often, as long as the transactions are convenient and well-embedded into daily routines (such as through one-click payments). Looking at the social effects of these transformations, we can conclude that remitting will become easier, faster, and cheaper. Money flows will become more regular, reducing the stress and risk of handling larger sums. This development might also cut out middlemen and empower individual senders and receivers. However, transactions will be difficult without an ID or passport (Isaacs 2015) and will therefore exclude undocumented actors. With transaction locations disappearing, migrants will miss a place to meet, but they will also appreciate the comfort and safety of doing remittance business from home.

The rise in digital technology will change the way remittances develop. Digital tools, especially smartphones and mobile apps, have become widespread, embedded in everyday life, making the sending and receiving of cross-border payments relatively safe and easy. The collaboration of key financial and government players in the remittance industry has made a robust compliance framework available which also aims to ensure convenient, fast, and secure digital payments worldwide. These developments meet customer demands: Digital payments have become more accepted, also because they echo the trend of demonetization in worldwide consumption (Giriyan 2020). Suri and Jack have analyzed how digital payments have boosted consumption as well as facilitated access to banking services. For example, the mobile money service of M-PESA is used by at least one person in 96 percent of all households in Kenya. Customers also have access to 110,00 agents who provide deposit and withdrawal services—in comparison: the country has only 2700 ATMs (Suri and Jack 2016, p. 1288). With the introduction of M-PESA as a secure storing place, people have started to save money and were thus able to plan larger acquisitions both privately and in their small-scale businesses. M-PESA also has a bitcoin equivalent, Bitpesa. However, the Bitcoin-based transfer systems are less accepted than mobile money, perhaps because they pose a greater challenge in infrastructure and in technical literacy, and they seem to be more prone to fraud (Metzger et al. 2019, pp. 18–22). Experts are also watching the role of cryptocurrencies in general but cannot predict any developments here other than that blockchain technology may further reduce the price of remitting. For future remittance research, the analysis of big data related to digital remitting can facilitate new perspectives on remittance cycles and global developments.

Cashless financing options, however, need transparency and trust in the money operators. Cabalquin and Wood-Bradley (2020) explored the emotive mechanisms used to promote connectivity in digital payment services. What is sent, according to their analysis of money operators’ advertisements, are “happiness” and “love,” delivered with “joy,” which emphasizes the emotional bond between senders and receivers. At the same time, remittance actors are addressed as economic subjects and valued customers. The online platforms constitute a “platformed migrant subjectivity” and a new digital form of governance in remittance transactions. Trust in technology is built by the construction of connectivity. The remittance market of the future will operate more on an affective level appealing to clients as economic subjects and caring family members.

Drawing on the chapters about material remittances, we can further assume that digital consumption and remitting will be joint ventures when the technologies and logistics provide cheap or even free delivery of the desired goods. The tendency to order products online and have them sent to relatives and friends in their places of origin will reduce the role of remittance senders and loosen the social bonds compared to the role of objects in remittance relations, as laid out by Mura and Ströhle in this volume. However, with free and fast delivery, more goods might be sent and thus the remittance network might even be strengthened by those weaker ties.

Digitalization increases participation but also generates a new digital divide. Older people may be excluded from digital remitting. Rural areas might fall behind even further, compared to urban regions with a strong digital infrastructure. Digitalization will empower some remittance clients by taking their demands and needs into consideration. Digital remittances will thus alleviate some imbalances, but create new inequalities on the way.

Remittances are Disparate, but Stabilizing Practices in Times of Crises

In a second step, we explore the function and transformation of remittance practices in past and current crises. Overall, with lower fees, more money is sent worldwide. However, average fees for remittance transactions wordwide were over 6% in 2022, twice as much as called for in the United Nations’s Sustainable Development Goal. The World Bank estimated that in 2022 a record high of USD626 billion were sent to low- and middle-income countries. In light of the COVID-19 pandemic, these flows were predicted to decrease to USD445 billion in 2020, with far-reaching effects on the globally most vulnerable regions of the Global South (World Bank 2020). This will result in a decline in the consumption of goods and services, which will strongly affect the remittance economy.

During 2020 and 2021, lockdowns, travel bans, and closed borders have shut down economic and social life around the globe. Migrants have found themselves stranded and unable to return to their places of work or origin. Even more problematically, without adequate access to housing or social safety nets, international workers have faced the risk of a COVID-19 contagion and of losing employment, wages, and health insurance coverage (World Bank 2020). The global lockdown also affected banks and money service providers, increased the costs, and decreased the possibilities of sending and receiving remittance money. Closed borders deadlocked informal channels of pocket remittances. Thus, the pandemic impaired remittances as the biggest safety net in the world, increased the pressure on migrants, and amplified the hardships for their families and communities of origin. The fear of a decrease in private money transfers led to a call to action called “Remittances in Crisis: How to Keep Them Flowing,” by multiple international organizations like the International Organization for Migration (IOM), the World Bank, and the United Nations Development Programme (UNDP) (Call to Action 2020). However, migrants’ remittances turn out to be much more stable than expected and more resilient than other forms of financial flows like foreign direct investment (FDI) or portfolio debt and equity flows (see Fig. 19.1).

Fig. 19.1
A line graph plots remittance flows. The line for F D I reaches 720 between 2010 and 2012, and the line for remittances reaches 520 around 2018. The line for debt and equity goes below 0 in 2008, and reaches a peak value of 300 between 2016 and 2018, and the line for O D A increases throughout.

Remittance flows to low- and middle-income countries expected to decline in 2020. (Source: World Bank 2020)

Full size image

A nuanced analysis is needed to understand the development and roles of remittances in the pandemic situation. Recent studies on Latin American countries and the Caribbean show that remittances took a hit from March to May 2020, but then picked up through the summer, ending the year even with a growth compared to 2019. Similar trends have been noticed in Sri Lanka. One important reason for these particularly resilient figures—in a global comparison—is the increased availability of mobile money apps and services (López-Calva 2020; Welsh 2021). Contrarily to these results, Kalantaryan and Mcmahon (2020) showed that in eight of 33 researched African countries, more than half of the people who depend on remittances have no access to the internet through mobile phones. The families left behind, who are most in need of incoming money flows, cannot receive digital remittances in times of closed borders. Similarly, migrants and their families were the ones most affected by the financial crisis in 2007/08, confronted with layoffs and anti-immigrant discourses pressuring them to return to their countries of origin (Orozco 2013). Globally, remittances in 2007/08 decreased by only 6 percent, an insignificant drop compared to other external financing like FDI and portfolio debt and equity flows, which declined between 40 and 80 percent (Bisong et al. 2020; see also Fig. 19.1). Ratha and Sirkeci (2011) pointed out, as most currencies in developing countries depreciated, migrants tended to send higher amounts of remittances in order to invest or even to return, and start businesses using the remainder of their savings carried with them.

Global crises have thus had multifaceted effects on the remittance economy, both unveiling and fueling global inequality. Facing one of the most pressing questions of our generation, the incoming Biden administration released an executive order on February 4, 2021, instructing the assistant to the president for National Security Affairs (APNSA) to prepare a report on climate change and its impact on migration (The White House 2021). The choice of institution commissioned to compile the report suggests that the movement of people is increasingly viewed in terms of a “securitization of migration” (Bourbeau 2013). Furthermore, simplistic future scenarios suggesting that the effects of climate change like rising sea levels will lead to a massive out-migration have been questioned by migration scholars, who have pointed out that people’s decisions to move are shaped by multiple factors, while adaptation strategies like flood defenses, changes in livelihood patterns, and short-distance mobility are often overseen. However, migration can be a transformational adaptation to environmental change and may be an effective way to build resilience (Castles et al. 2014, pp. 209–213).

It will be a striking issue for future research to carve out the multilayered functions and effects of green remittances in the context of transformation. For example, Musah-Surugu and Anuga (in this volume) point out how remittances finance climate change adaptation among smallholder farmers in Northern Ghana on the local level. While remittance money is used for technological innovations to adapt to the effects and reduce the threats of climate change, the smallholder farmers also invest remittances in chemicals and fertilizers that might contribute to global warming. Furthermore, some remittance recipients increasingly look for jobs and future livelihoods beyond farming. We need such detailed analyses of transformative effects in order to oppose populist debates and visions of migrating masses. On the other end of the argumentative spectrum, such analyses help to avoid establishing the position of the “resilient migrant who engages in successful adaptation to climate change” (Faist 2018, p. 202), thereby fueling the neoliberal agenda of migrants who anticipatorily take responsibility and thereby relieve states and industries from the duty to clean up their own mess.

Conclusion and Outlook: The Social Question and the Future of Transnational Society

Migration is a global phenomenon and shows many forms: internal, cross-border, and transcontinental mobility is structured in different ways, regular and legal migration obviously differ from flight and human trafficking. Almost all forms of migration, however, are accompanied by remittance transfers. These transfers aim to alleviate and compensate economic and social inequality, but they can also create new inequalities. This is particularly true for remittance exchange between the Global South and the Global North. Here, the private transfer of money, objects, knowledge, and symbolic capital appears in a “Western” currency (Bönisch-Brednich in this volume) and follows the historical tracks of global inequality and colonial imperialism.

Milanovic (2012) reminded us that in order to understand inequality in the twenty-first century, we need an empirical and mental shift from questions of class to questions of location—that is a shift from proletarians to migrants. While in the nineteenth and twentieth centuries, the class/capital divide determined inequality, Milanovic used today’s global Gini coefficient to show that 85 percent of inequality is attributed to differences in mean country incomes, and only 15 percent to class (Milanovic 2012, p. 127). Against this backdrop, transnationality—conceptualized as migration-driven cross-border belonging, social relationships, and networks—has to be seen as an axis of inequality, enabling or disabling access to resources and intersecting with categories like ethnicity, class, gender, age, and citizenship. The unequal cross-border access to resources can lead to divisions into a small capital-intensive and highly skilled transnational elite and a larger transnational precariat (Schäfer 2021).

Location-based privileges and discrimination are produced and reinforced through migration regimes, spawning new social and cultural heterogeneities. Thus, the social question has to be transnationalized, as cross-border migration can become an issue of inclusion and exclusion in every existential field like education, work, health, and housing (Faist 2019). Remittances can here act as cross-border social protection strategies that improve the livelihoods of individuals and families when invested in education, healthcare, and consumer goods. However, inequalities between the regions of origin and settlement tend to persist, as institutionally embedded forms of public social protection in the regions of origin are often exposed to additional pressures (e.g. brain drain). Remittances can moreover induce new inequalities between households who do or do not have family abroad, or in terms of a gendered inequality in the remittance-sending countries, where the emancipation of women results in women from peripheral countries taking over the vacant positions for care work in the household (Faist 2014, pp. 218–219).

Dependencies created along remittance pathways are certainly fragile, and threatened by global economic, environmental, and health crises, as shown above. Moreover, remittances are dependent on border regimes and thus decline when migrants acquire permanent residence in their countries of settlement (Mahmud in this volume). Thus, powerful global actors like the World Bank, development agencies, nation states, and multinational companies enforce a restrictive temporary migration management that keeps people and money on the move (see Bailey in this volume with specific regard to seasonal worker programs). Against this backdrop, the response of the nineteenth and twentieth centuries to growing inequality, namely the welfare state, is not seen as responsible for temporary migrants, who are mostly not represented by trade unions, either (Faist 2019). Hence, voices demanding a broader system of “transnational social protection” of labor, education, health, and senior care (Levitt et al. 2017) or a “European citizenship” (Bauböck 2019) are growing louder.

When we aim to conceptualize the future of transnational society, we have to keep in mind that migration between the Global South and the Global North is a result of European colonialism and imperialism and constitutes “a post-colonial counter flow” (Faist 2019, p. 8). Remittances mirror this asymmetrical relationship: They can be seen as postcolonial money flows. At the same time, migration can serve to mitigate social and economic inequalities. However, border regimes and migration management obstruct these forms of global reallocation of income and produce new inequalities: Without the legal right of residence and of work, a social and cultural right to belong is rendered impossible. Migration is still class-specific and selective, and it is not the same as mobility in the utopia of a cosmopolitan and borderless world.

By looking at the transformative effects of the most striking cross-border transactions made by migrants, namely remittances, we can generate a lens for inequality and a spotlight for the previously marginalized and unseen contributions of migrants to transnational society. Given the development of digitalization, crises like the COVID-19 pandemic, and the new transnational social question, we can conclude that we will witness several simultaneous trends: Digitalization will enhance and upvalue the position of remittance actors, while a new focus on their demands will result in cheaper and faster transactions. This will, on the one hand, broaden access to remittance transactions but, on the other hand, will exclude people without the means, knowledge, and infrastructure from participating in digital remitting. In the course of the COVID-19 pandemic, remittance flows are estimated to have declined by 20 percent in 2020—varying significantly in different remittance corridors, as the comparison of African and Latin American countries have shown. Globally, the numbers have probably plummeted considerably, compared to other crises, when remittances acted as shock absorbers (e.g. during the financial crisis in the Sub-Saharan region, Singh 2014). At the same time, studies from Latin-American countries and Sri Lanka indicate that remittances tended to be also countercyclical during the COVID-19 pandemic, that is remittances increased when the situation in the countries of origin deteriorated (López-Calva 2020). Remittance research will need to open a new chapter in exploring the transformations and limitations of remitting in the aftermath of the pandemic.

Finally, remittances will play a decisive role in cross-border inequality. Along with financial remittances, transnational social, cultural, and symbolic capital will continue to shape migrant economies and identity politics. A growing transnational entrepreneurship will go hand in hand with migrants’ social upward mobility based on transnational capital like language skills, comparative knowledge, and networks. Remittances, though originating from asymmetric global power relations, could thus function as multifaceted practices of cross-border social redistribution. At the same time, remittances tend to privilege individuals with diaspora connections. At the extreme end, it does not matter anymore who you are or what you do, but only whether you have family abroad. Apart from this inner-societal divide, remittances can fuel a global divide into a transnational elite and a transnational precariat. On which side the pendulum is more likely to fall depends on global politics: Will we observe policies of renationalization, protectionism, and restrictive migration regimes, or transnational forms of social protection, global/dual citizenships, and sustainable economies? We hope for the latter.