Monday, November 26, 2007

Remittances and the role Western Union

Anyone familiar with the UAE knows that a majority of the population (working and nonworking) are foreign guest workers. The guest workers send much of what they earn to family in their home country.

Last week the New York Times published a major piece on remittances and about Western Union in particular.
To glimpse how migration is changing the world, consider Western Union, a fixture of American lore that went bankrupt selling telegrams at the dawn of the Internet age but now earns nearly $1 billion a year helping poor migrants across the globe send money home.
Migration is so central to Western Union that forecasts of border movements drive the company’s stock. Its researchers outpace the Census Bureau in tracking migrant locations.
With five times as many locations worldwide as McDonald’s, Starbucks, Burger King and Wal-Mart combined, Western Union is the lone behemoth among hundreds of money transfer companies. Little noticed by the public and seldom studied by scholars, these businesses form the infrastructure of global migration, a force remaking economics, politics and cultures across the world.

Last year migrants from poor countries sent home $300 billion, nearly three times the world’s foreign aid budgets combined.
While some migrant groups still complain of predatory pricing, the company has won unlikely praise.

“Western Union has become a company that values and protects its customers,” said Matthew J. Piers, the Chicago lawyer who sued the company over its fees. “Nobody was more surprised at the change than me, because I was Western Union critic Numero Uno.”

This is a story of how a goliath fell when the telegraph market collapsed and how it reemerged on the strength of its existing network of outlet around the world and grasped the market opportunity in the growth of remittances. And how it remade itself again in response to criticism - and I think more likely, the threat of competition - with a focus on customer service.

Here are the other stories in the NYT series on migration by Jason DeParle.

Lost Luster - In India, Even Cared-For Populace Leaves for Work - In the Indian state of Kerala, remittances from global capitalism are now a central part of the local economy. (September 7, 2007)

Middle Class Migrants - Rising Breed of Migrant Worker: Skilled, Salaried and Welcome - While many countries are seeking to restrict immigration by low-skilled migrants, they are increasingly working to attract those with advanced degrees and scarce skills. (August 20, 2007)

Building Blocks - Fearful of Restive Foreign Labor, Dubai Eyes Reforms - After several years of labor unrest in the United Arab Emirates, the government is seeking peace with the migrant workers who make local citizens a minority. (August 6, 2007)

The View From Cape Verde - In a World on the Move, a Tiny Land Strains to Cope - The West African nation of Cape Verde, where almost everyone has a relative abroad, is a microcosm of the forces of migration that are remaking societies across the globe. (June 24, 2007)

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Anonymous Amurrican Abroad said...

Western Union may be awesome when it comes to sending money to any country other than _to_ the U.S. For that, it's terrible; it requires far more hassle and problems than any other system I've run across, and it's bloody expensive.

I'd recommend Paypal.

6:03 PM  

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