Institutions and Policies for Maximizing the Impact of Remittances in Albanian Economy
Institutions and Policies for Maximizing the Impact of Remittances in Albanian Economy

Author(s): Altin Idrizi
Subject(s): Economy, National Economy
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: Remittances; Albanian Emigrants; Financial Products; Economic Growth
Summary/Abstract: The aim of this paper is to present some proposals on how to maximize the impact of remittances on the economic development of Albania. Over 25% of the Albanian population and over 35% of Albania's labor force lives and works abroad. Over 190 000 Albanian families receive remittances from emigrants abroad. Part of the money that is transferred through the financial system, represent an important source of funds for financial institutions and create opportunities for development of new financial products that meet the needs of emigrants and recipients of money from abroad. These transfers may create a greater multiplying effect with more bank deposits and more bank loans. Actually the best way to maximize the impact of remittances on economic growth of developing countries is to implement sound macroeconomic policies and good management practices and strategies, including all economic entities. Good governance, stable banking system, respect for private property, outward-oriented trade strategy and foreign direct investment are some of the prerequisites for increasing the efficiency of the use of remittances in order to achieve faster economic development. The state plays a major role in the development of these key pillars of economic growth, which is supported by the international community. Remittances are interchangeable neither with official development assistance or direct foreign investment.

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