Yes, remittances may be used in rural areas for adding to the stock of animals, agricultural equipment, additional land and for investing in housing, properties and educating children.

Broad studies have revealed that remittances have the potential for development, do you think that there are ways in which we (South Africans in the field of developmet studies) can fully explore their potential in helping with development?

I think remittances could be an importance means to remove obstacle for development in many African countries. Many African countries are highly indebted at the moment and running with a vicious cycle of foreign debt. To understand the effectiveness of remittance for development, you may follow the example of Bangladesh. It is still the largest source of our foreign currency earnings and the country has dramatically reduced its debt burden over the past decade. Earnings from remittance is also beneficial for better income distribution, better social growth in rural areas, and makes developing country governments more independent in internal decision making, especially when you do not have a good industrial base to earn foreign currency.

What kind of policies does South Africa need to develop in order to realise the potential that remittances has to promote economic growth?

There is the need to remove barriers that prevent inflow of remittance into the country. Particularly high cost of transfers.

Moreover the government should create enabling environment for the establishment of micro-scale enterprises.

In addition, recipients should be targeted, sensitized and trained to invest these remittance appropriately.

Remittances do play a very important role in the rural economies, world wide including the least developed and developing countries. Taking the example of Bihar, one of the poorest states in India, studies have shown that 40-45 percent of rural household have migrants who regularly send money to their families and the whole rural economy is heavily dependent on the money thus received. Another state though not that poor, Kerala again benefits immensely from remittances it receives from expatriate population working in Gulf countries. Further, when these migrants return the money they invest in there native places gives a further boost to economic activities, including infrastructure development. Removing barriers to money transfer would certainly help these migrants as remitting their earnings would then become easy and trouble free..

True... however im only focusing on internal remittances in South Africa.