SP parliamentary motion urges lower charges for transfer of money to developing countries

29 November 2005

SP parliamentary motion urges lower charges for transfer of money to developing countries

The Dutch National Parliament's main legislative chamber today backed a joint SP-Christian Democrat motion which could lead to a lowering of costs for immigrants transferring funds to their countries of origin. The motion was proposed by SP Member of Parliament Harry van Bommel. A recent World Bank study showed that last year developing countries received $167bn dollars from migrant workers sending money to their families. Charges imposed on such payments should be set as low as possible.

The sum has risen 73% since 2001 and is twice as much as these same countries receive in development aid. This is no panacea for the problems of development, but it has been proved that it is of importance in the struggle against poverty and that it acts as a safety-net and can serve as security for microcredit.

These positive results notwithstanding, there is certainly a downside, because there is little competition in a market for monetary transfers which is sewn up, there being in fact only two banks active in this trade, MoneyGram and Western Union. 10 to 15% is raked off from every transaction. As Mr Van Bommel explains, “We have therefore asked the government to look into whether they could, together with the authorities in the countries affected, develop a shared network in order to drive down these costs.”

The support of Parliament's lower house means that the government can no longer prevaricate. A further motion proposed by Van Bommel, concerning support for the social sector in developing countries and in particular adequate staffing levels, unfortunately failed to win a majority. Nevertheless, the minister did promise, in his presentation of the foreign affairs budget, to raise the matter with the IMF and World Bank.

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