The USV Annals of Economics and Public Administration, Vol 15, No 2(22) (2015)

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HOW IMPORTANT ARE REMITTANCES FLOWS FOR ROMANIA?

Dan Florin Hreban

Abstract


By all analyses, the remittances flows describe a trend of significant growth worldwide, over the past two decades, currently representing an extremely important component of capital for the poor and developing countries. Compared to other capital flows (foreign direct investment, development aid or other types of private capital), the remittances size is positioned, generally, only behind FDI, causing direct and indirect socio-economic effects, far more profound than other types of capital. Moreover, studies show that remittances flows tend to a much greater stability over time as compared to other balance of payments flows, especially the exports and the private capital.

Romania is an important recipient economy. If in 2000, the value of the entries was 96 million USD, in 2008, the amounts remitted from abroad reached a peak of over 9.2 billion USD, after which, during the global economic crisis, they declined, reaching a value of 3.5 billion USD, in 2013.

Over the years, along with FDI, the capital flows from remittances have significantly contributed to the economic growth and to the increase of the welfare of an important part of the population by improving economic and social status. However, how important have the remittances flows proved to be for the economy as a whole? Is there any influence of these amounts on the inflation, labour market, education, or entrepreneurship? How much is Romania losing by dispatching such an important part of its population to work abroad, and how much does it earn from the money remitted home?


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                     Ştefan cel Mare University of Suceava                   Faculty of Economics, Administration and Business
 

 

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