The financialization of remittances and the individualization of development: A new power geometry of global development

Abstract

The article argues that the increasing financialization of remittances produces an enormous shift in the political economy of development and contributes to a new power geometry of development. Exploring this power geometry, the article focuses on three main issues: First, migrants intend to support their friends and families on an individual level as remittance senders, and together with the corresponding recipients they form a translocal moral economy. On a macro level, the value of these transactions is high when currency hierarchies remain strong. Financialization of remittances amplifies this micro–macro divergence inherent to remittance flows. Deepening the financial “development” impact of remittances then goes hand in hand with cementing global inequality. Second, economic and political elites in remittance-receiving societies who are able to organize direct and indirect access to remittances with the help of financial instruments and through financialization are able to emancipate from national political control. This indirectly contributes to fostering elite rule in remittance-receiving societies. Third and finally, development is no longer a “national” objective but has become the individual risk of migrants and their relatives and friends. Financialization of remittances therefore consolidates an individualized notion of development. This paper aims to go beyond the narrow economistic and problem-solving approach on which many studies on remittances and financial inclusion draw. It illustrates how financialization of remittances (re)shapes power relations both within the Global South and between the Global South and the Global North.

When Food is Finance: Seeking Global Justice for Migrant Workers

“…At the University of California, Irvine, the Institute for Money, Technology and Financial Inclusion (IMTFI) funds scholars in developing countries to study emergent financial practices. While greater access to capital may mean the "individualization of development" (Warnecke-Berger, 2022), it may also be a source of monetary innovation and political agency within shifting global assemblages of material, collective and discursive relations (Schwittay, 2011;Collier & Ong, 2005). Approaching materially poor people as financial subjects who act in culturally grounded ways, IMTFI gathers, analyzes and disseminates ethnographic knowledge as an alternative to the quantitative data that informs economic governance (Maurer, 2010).…”

Diasporic capital and the financialisation of housing in Ho Chi Minh City

“…Scholars have only recently taken an interest in studying the intersection between remittances and global financial accumulation (Kunz et al, 2020; Warnecke-Berger, 2022). The financialisation of remittances (FOR) literature extends existing financialisation research by proposing a unique way of researching and talking about remittances as a distinct resource category with analytical insights.…”

“…A number of new financial instruments like securitisation mechanisms and diaspora bonds have since emerged (Hudson, 2008; Kunz et al, 2020; World Bank, 2019; Zapata, 2018), including new measurements to improve the reporting of remittance inflow (Hudson, 2008). Now a ‘multi-billion industry’ with significant stakes for people, businesses and institutions, the growing complexity and multitude of mechanisms that support the remittance landscape have been referred to by scholars as the ‘financialization of remittances’ (Guermond, 2022: 372; Warnecke-Berger, 2022).…”