An IOM survey on the impact of remittances on households and communities reveals that more than 35% of families benefit from remittances sent by family members working abroad and that remittances continue to be used to fund basic household consumption, consumer durables, purchase of housing, and debt repayment.

According to the data, which was collected among 3,914 households living in rural and urban areas, the total amount of annual remittance per migrant increased from US$ 1,296 in 2006 to US$ 1,848 in 2008.

Data collected by CBS-AXA and analyzed by the experts from the Kiel Institute for the World Economy also shows that more than 60% of migrants send their money home through formal banking channels with less than 12% relying on informal services or personal transfers. This is partly due to the fact that the share of households with a bank account has grown to 12% of families with a family member abroad.

The survey states that Moldovans abroad remain committed to funding community projects at home, with more than 15% making donations to help education and infrastructure projects.

According to the survey, a third of the estimated 340,000 Moldovans in the CIS and EU countries reside illegally, which puts them at higher risk of exploitation and arbitrary treatment by local authorities.

According to World Bank data, Moldova ranks first in Europe in terms of the ratio of remittances compared to GDP, constituting more than 38.3% in 2007. The recent data from the National Bank of Moldova show that Moldovan migrants remitted US $1.4 billion in the first ten months of 2008, compared with 1.2 billion in 2007.

"Moldova is among the most impacted countries through the migration phenomenon, having a significant part of its labour force working abroad, and their remittances substantially contributing to the country’s GDP," says Martin Wyss, IOM’s Chief of Mission in Moldova. "Although there is currently little data available, a recession in Europe and a slowdown of the construction sector in Russia would reduce the volume of remittances and negatively impact families and their savings."

The report recommends that remittances should not be relied on as the main source for sustainable economic growth. Instead, policies should be implemented to stimulate productive investments based on improvements of Moldova’s regulatory and business climates along with comprehensive measures for the socio-economic reintegration of returning migrants.

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