Dynamics of Remittances towards Romania after EU Adhesion

Abstract

The remittance industry, that is experiencing some positive structural changes with the advent of cell phone and internet‐based remittance instruments, included Romania, since certain reforms concerning the openness of the economy were implemented. In general, the diffusion of these changes is slowed by a lack of clarity on key regulations (including those relating to money laundering and other financial crimes). Also remittance costs have fallen, but not far enough, especially in the South‐South corridors. Recorded remittances to developing countries were estimated to reach $ 240 billion in 2007. But the true size of remittances including unrecorded flows could be even larger. However, a severe stagnation in remittance flows to some important developing countries (up to a visible deceleration in others countries) contributed to a slowdown in the rate of growth of remittances in Romania as well. Nevertheless, the growth of remittances to developing countries remains robust because of strong growth in Europe and Asia. This paper aims at highlighting a series of mutations that Romania knew and which are felt as a consequence of the general context and of its efforts and involvement from the international flow of money transfers. The most important contribution contained by this article refers to the impact of some national policies and of the global financial turmoil as well exerted upon the remittances that the Romanians sent home from abroad.