Remittances from a Refugee

Kathy*, originally from Papua New Guinea, fled her home country and arrived in Australia late last year. Living as an asylum seeker in Australia is tough, despite what the media might report. Of the asylum seekers who are not locked away in detention centres few have work rights, access to education or medical services and live a day to day existence, scraping by with the support of charities.  In the eight months before she was granted permanent residency, Kathy received income support from the Red Cross and found some extra dollars working temporary cash in hand jobs.  Despite her hand to mouth existence, Kathy has been able to financially support her cousin Paul*, back in her home country.

Whenever Kathy can save up between $100 – $200, which can sometimes take up to one month, she makes a trip to Western Union and transfers the money. She does not like that they charge between $20 – $40 every transaction, but she knows of no other way to send the money back. Her cousin Paul, waiting at the other end in Port Moresby is 20 years old and is studying an electrical apprenticeship. Paul is two years into a four year course.  The first year he was able to scrape by, paying the school fees with help from family members in PNG. However, since Kathy came to Australia and has been able to send money back, the pressure on Paul’s family to support him is far less. This year Kathy received permanent residency in Australia, having been assessed as a refugee, she can now financially support Paul for the next two years until he is a qualified electrician.

Kathy and Paul’s story illustrates how remittances can fill holes which aid miss.  Over the next twelve months Australia will spend an estimated $482 million on aid projects in Papua New Guinea (AusAid). The aid is targeted at primary and secondary education, HIV prevention, security, maternal health and infrastructure projects. As a young, urban male Paul is unlikely to see or directly benefit from any of these projects. However with the remittances he receives from Kathy, Paul is still able to access education and training, and achieve the end benefits many aid projects strive for.

Their story also demonstrates an example where remittances are being used without creating a culture of dependency, a common criticism of the practice. One could argue further about the benefits of Paul not being reliant on foreign aid projects. Paul is using the money he receives to educate himself and after completing his apprenticeship, he will no longer rely on money from Kathy to live. A secondary benefit is that the financial burden of Paul’s family is eased and they can use their scarce income in other ways. Without the money from Kathy, Paul’s family would still be able to pay for his apprenticeship, however it would leave them wanting in other areas.

After completing his electrical apprenticeship Paul will have a good chance of finding stable work, either as an employee or being self employed. Kathy jokes that he may even be able to send money to her once he is working.