Send Money Pacific reports that between January 2009 and July 2011, costs to send money to the Pacific islands from Australia have fallen by 6.3 percent and from New Zealand by 3.8 percent. In some cases they have seen dramatic drops in money transfer operator costs — Australia-to-Fiji costs have gone from 18 percent to 7 percent.
Online sites such as Kick Ex and Money Move It have provided simple pages with clear directions and low prices for people to transfer money.
Two of the biggest mobile companies in the pacific, Digicel and Vodafone, have launched a "wallet service" enabling those covered by a participating network to receive money transferred abroad instantly to their cell phone. Those on the islands can withdraw cash from a street kiosk or even pay bills using their cellphone.
It's not only more convenient, it's also safer. Cellphones leave an electronic trail for everything and transfers are reported to authorities.
Obstacles to giving
Lakai's brothers and sisters in Tonga are lucky in a way. With the downturn in the economy, many migrant workers in the United States have had trouble finding the spare funds to send back to their family.
Sione Kivalu, who lives in Salt Lake and has done concrete work for the last 10 years, came to the United States from Tonga in 1994. He married in Hawaii and after a cousin told him it was a good place to raise a family, moved to Utah with his 2-year-old daughter.
In the past, his sister or brother still in Tonga would ask for help to pay for their children's schooling, various bills, or a funeral.
"I would send whatever was left over after taking care of my children here," Sione says. "It was usually around $100 once or twice a year.
He now has two girls and two boys ranging from ages 8 to 15.
"I have not been able to send anything in the last two years," Kivalu said. "We are struggling here."
In 2008, remitted funds from the United States were at a high of around $54.4 billion. But by 2010 they had dropped below $52 billion.
Immigration slowed with the economy as well, providing fewer workers to help their families abroad. The Organization for Economic Co-Operation and Development estimated that 2009 saw a net increase of 2 percent in legal immigration, down in the United States from 5 percent a year earlier. Illegal immigration has dropped off, too. The Pew Hispanic Center reported 300,000 annually came to the U.S. illegally from 2007 to 2009, compared to 850,000 between 2000 and 2005.
Barriers to sending cash
From anti-money laundering laws to the Patriot Act, barriers in the United States keep the price of sending money to families abroad high. For Tongans in the United States, the low-cost money transfer website Money Move It is unavailable. Hamlin says that when his company researched operating in the United States, they decided the rules and regulations were too formidable a barrier.
"Regulations have made it harder and harder for my company, but not for the banks," Hamlin says.
"Ironically, the biggest barrier to immigrants using remittances could come from looming regulations intended to help them," says John Berlau, director of the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute.
"The Dodd-Frank financial overhaul of 2010 imposes multilingual mandates for providers of remittances," Berlau said. "The forms must be in the language of the community. These costs could be astronomical in neighborhoods where many languages and dialects are spoken. So the unintended consequence may very well be less outlets that serve immigrant communities with remittances, driving up consumer costs and limiting choices."
Alex Nowrasteh, at the Competitive Enterprise Institute, says things like ID requirements and background checks can be quite burdensome for migrants.
Efficient foreign aid
Lowering costs for sending remittances encourages a very efficient and voluntary form of foreign aid, experts said.
"The benefit of remittances compared to foreign aid and some charity is that it goes directly to the person for whom it is intended — there is no intervening authority involved, no government agency, no implementing organization — just resources from one person being directed to another person who has a need," says Karol Boudreaux, Africa Land Tenure Specialist at USAID.
Also, cash can be used on anything the receiver sees fit.
"Aid projects may do good on the ground," she said, "and may reflect what beneficiaries want and need (for example, an aid project that provides for clean water or better sanitation services may meet the needs of local communities and reflect their preferences), but sometimes these projects reflect what agencies determine is best and may not reflect what households truly want."
"Immigration is a huge net benefit for Utah," Nowrasteh said. "And remittances can come back to the U.S. in form of investment or trade.
"It is a great way for poor people in poor countries to build capital, save and spend on education, so in the future they won't need to send migrants."
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