Ladies and gentlemen,

It is a great pleasure for me to open this seminar on remittances. Before getting to the issue itself, please allow me to reflect a little on migration and what it has meant to people in Norway.

The board game Monopoly is known and played all over the world. Monopoly includes a deck of chance cards. Drawing the wrong card can send you directly to jail or turn all your houses and hotels into ashes. In the earlier Norwegian version of the game, there was a chance card that is not included in the original American version. It read: Receive from uncle in America NOK 1000.

This is testimony to the importance migration has had on the Norwegian society. Everybody growing up in the first half of the last century had an uncle in America. The period from 1820 to 1920 is called the century of migration. Close to 900.000 Norwegians emigrated to North-America during that period and only Ireland saw a larger share of its population depart for the Promised Land. All in all around 50 million Europeans left during those 100 years.

It is important to keep this in mind when we are discussing the 200 million people that today are considered migrants. There is nothing new in this. People have always looked for a better life and the right to pursue your dreams and hopes should be considered fundamental.

Migration is an important mechanism for alleviating poverty, perhaps the single most important. And just again to remind ourselves about our own past: A little known aspect of Norwegian migration is that it was partly used as state organized social dumping. The Norwegian public poor relief system actually paid the passage to America for many poor people in order to get rid of the burden they represented on society.

Remittances account for more than twice as much as the world’s total official development aid.

However, it is not going to the poorest countries. Three quarter of the world’s remittances are going to middle income countries. And it is also the above average well off urban families that tend to send someone abroad.

Most of us probably first came to associate remittances with Hispanic migration to the US. Especially Mexico, Caribbean states and Central-America has seen large amounts of remittances flowing in from the north.

But remittances are becoming increasingly important for the economies of Eastern and Central European countries. In some countries it has become the back bone of the economy. In Moldova remittances account for more than a quarter of GDP, in Bosnia more than 20 percent of GDP.

But the migrants are also of great value to the host countries. They are carrying out important tasks in countries with declining work forces. Many migrants are employed in the informal sector where they easily become victims of exploitation. It is therefore important to improve the rights and protection of migrant workers.

We also have to face the problem of brain drain in the countries of origin. I believe that the only long term, permanent solution to this is to create economic growth and development in the countries of origin. But we can improve the situation buy stimulating to circular migration and to avoid aggressive recruitment from key sectors.

This government has taken steps to face the many challenges represented by migration. Our migration-project - led by Manuela Ramin-Osmundsen – will contribute to a better understanding and hopefully better policies in this field. But our approach has to be multidisciplinary and involve interior ministries, law enforcement, immigration authorities, NGOs and the immigrant communities and other relevant stakeholders.

Until recently little attention had been paid to remittances in development thinking. This is now changing and there is increasing awareness of its importance.

We are considering the funding of studies into the flow of remittances from immigrant communities in Norway to countries of origin.

Remittances are mostly going directly to household consumption; hence it has an important poverty alleviation effect. It can also contribute to micro-growth, as it is often going into investments in the private sector. But there is no precise answer to the question on migration’s development impact.

We know the important scale of remittances; we know some of the problems like high transaction costs and lack of well functional banking systems in recipient countries. We also know that remittances are associated with drug money and general criminal activities and that it is also used for fuelling civil wars. This can lead to stigmatization of the great majority of our immigrants who are honest hard working people.

It is therefore important to increase transparency and make it easier and more cost effective to use legitimate channels. In order to achieve this we need to get a better understanding of remittances and how they work. This seminar and the conference on innovative financing mechanisms will make important contributions to improving our understanding.

We would like to challenge the immigrant communities in Norway on this issue. We should sit down together and discuss remittances on a broad basis. But it is of course important to keep in mind that remittances are private money and should not be considered as a potential substitute for official development aid.

We believe it would be very interesting to explore - together with the immigrant communities - how we can use remittances more systematically as a tool in our development efforts. One model could be a partnership between immigrant communities and the government, based on a mixture of remittances and official development aid. It would be interesting to explore the idea of matching contributions from immigrant communities to development projects with official development assistance.

Thank you