Remittances have a number of economic and socio-political benefits relevant to development. We have analysed the range of direct, indirect, micro and macro-economic benefits, but have also identified the negative effects inherent in diaspora and migrant remittances. Consequently, we have designed a scheme (i.e. RemitAid™), which mitigates the negative impacts and structural imperfections, whilst optimising the positive impacts of remittances. RemitAid™ proposes that actual remittances sent to Less Developed Countries (LDCs) for activities falling within Millennium Development Goals (MDGs) and charitable activities, should trigger government co-funding in OECD countries. The co-funding can be in the form of match funding and/or community (i.e. pooled) tax rebates – managed by a new agency RemitAid™ Development Fund (RDF). The funds shall be treated as endowment capital to generate income for grants and investment in diaspora and development activities in LDCs.
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