2.3 REMITTANCES: their importance and share of a country's GDP
2.3.4 Communal Remittances
In many parts of Africa, unrecorded remittances include domestic urban-to-rural payments that are not captured in official statistics either, (de Haan 2000, as cited in Sander and Maimbo 2003), "Estimates suggest that these domestic remittances could contribute as much as three-quarters of non-farm earnings in areas close to major cities and one fifth of non-farm earnings in more remote areas." In the Eritrean economy, domestic remittances are also far from being quantifiable. As discussed briefly in the above paragraph, this study attempted to obtain data concerning remittances to Eritrea.
Using a survey it tried to get what percentage remittances constitute, what their uses are, what factors affect their flow, etc. but due to time and costs constraints this proved to be impossible. Consequently, secondary data are relied upon to see remittances and their impact on the Eritrea economy. Data from IMF and some other studies are traced to assess these above said contributions of remittances.
Diaspora further illuminates the role of collective or communal remittances. (IOM 2000, as cited in Sander and Maimbo 2003), "Nigerian migrants also make individual or pooled remittances through "home improvement unions."
In Eritrea this is another success story, which extends back to the years of liberation struggle where such community-based associations made headlines in the different renowned world papers. One such association of that time was the Eritrean Relief Association (ERA), which played an important role in alleviating the different natural and man-made hazards in the then liberated part of Eritrea. Today as their legacy, there are many Eritrean Diaspora associations that follow up and participate in the country's reconstruction and development projects.
African migrants' groupings take the form of associations based on cultural or church groups, refugee groups, ethnic professional groups and/or virtual organizations that use the Internet such as Somali Forum (AFFORD 2001 as cited in Sander and Maimbo 2003). With the exception of very minor groupings, the majority of the Eritrean Diaspora associations took the form of an imagined community. The Government of the State of Eritrea mobilises the people to form 'national' associations that constitute people with different religious, linguistic, ethnic, or regional backgrounds.
As Adamson (2002:165) points out, members of trans-national communities if left alone, breed polarised politics and provide material and financial support for armed conflicts within the so-called homeland. As associations based on regional, ethnic, or church groups are deemed to form a polarized minority-thinking that breeds all types of evil spirit and confusion. Furthermore, these latter groups, if allowed to flourish, are the prime cause of widening of the inequalities in a nation. The region of Kayes in Mali is one concrete example of these inequalities.
Thus, the Diaspora Eritrean associations as discussed are broadly defined to include every ethnic, linguistic, religious, as well as regional background within the same group.
The National Union of Eritrean Workers, Women and Students were and are the fore- runners of these imagined communities. Besides, there are other associations that include non-Eritreans from the host countries. Eritrea Development Foundation (hereinafter - EDF) is one whose members are from all races and nationalities from continental America who are volunteers and interested in helping.
For instance, the contributions of these associations for the first quarter of 2004 were remarkable and substantial. Eritrean associations in Britain and Canada donated US
$98,000 and 2,600,000 Nakfa in support of drought victims and to augment the Martyrs' Families Trust Fund (Shaebia, 2004). According to the commissioner for Eritreans Residing Abroad - Mr. Tekeste, the above was only a fraction of what the Eritrean Diaspora contributed. Similar contributions exist everywhere Eritreans reside. Many projects that are co-sponsored by the Eritrean Diaspora and their counterpart stakeholders in the home country (such as government bodies, NGOs, and churches) are flourishing. The successes of these individual projects signify a sense of commitment that Diaspora Eritreans show towards their country.
As it is a common experience in many instances, the sustainability of projects has been exposed whenever returning migrants start projects that do not meet and reflect the needs of villagers. Therefore, to prevent such disasters, the Government of the State of Eritrea provides adequate support and guidelines on how, where, and in what forms they should participate. The people, mobilized under the above associations, were made to contribute to projects that are formulated by the different ministries, which in turn are consulted by concerned villagers. These projects were designed and governed in such a way as to give a sense of ownership to both sides - local villagers and Diaspora Eritreans by participating equally in their implementations. Local villagers confirm their participation by contributing 10 percent of the total cost of a particular project in addition to their personal involvement in its designing and implementation whereas the Diaspora Eritreans cover the larger portion of the total cost.
In short, the potential benefits of remittances whether it is in their macro or micro levels, or whether they are used for the individual household or community uses, can best be summarised as follows:
1. They ease foreign exchange constraints and improve balance of payment and are net addition of resources.
2. They permit imports of capital goods and raw materials for industrial development.
3. They are potential sources of savings and investment of capital formation for development.
4. They cushion effects of international price shocks.
5. They raise the immediate living standards of the recipient households.
6. They have potential to improve income distribution (if poorer and less skilled are migrated).
2.4. REMITTANCES and THEIR ASSOCIATED NEGATIVE DRAWBACKS