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Global Poverty Research Group

Remittances, poverty reduction and the informalisation of household wellbeing in Zimbabwe

Sarah Bracking and Lloyd Sachikonye

Global Poverty Research Groups

June 2006

SARPN acknowledges the ESRC Global Poverty Research Group as a source of this document: www.gprg.org
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Introduction

"The poor shall remain poor and the rich shall remain rich"... She said, "we in the high density areas are leading a "001" type of life. This meant, "0" breakfast, "0" lunch and "1" dinner.
(Mubaiwa B, Fieldwork Notes, 3 November 2005)


This report is a summary of the data collected in fieldwork for an overall research project on the poverty reducing effects of migrant remittances, and their effects on the informalisation of economy and society1. The research seeks to explore the extent to which migrant remittance transfers affect poverty with particular reference to the medium of the informal economy. In particular, it is concerned to identify the forms and extent of informal market relationships which are liquidated by remittance income, and which are the medium of travel for its economic circulation. As a corollary it seeks to also estimate the 'in-kind' transfers which substitute for pecuniary transactions. The research thus adds to the growing literature on the importance of migrant remittances in terms of deepening our understanding of the importance of informal and in kind transfers to poverty reduction.

A key challenge of this research is to establish an appropriate methodology for mapping a morally ambiguous, hidden and sometime illegal economy. While there have been attempts before to estimate the volume and scope of informality in African economies, the methodology used is near exclusively in terms of showing macroeconomic indicators at a national level, or tracking errors in the balance of payments. This research begins to model the informal economy, and the horizontal transfer of resources from a household level. The initial results suggest that much more work is required in new methodological approaches like this, since the magnitude of informality dwarfs formal sector indicators. In short, the error in calculation could prove to be larger than the calculation itself.


Footnote:
  1. This research, funded under the ESRC-funded programme of the Economic and Social Research Council (UK), is headed by Dr Sarah Bracking at the Institute of Development Policy and Management (IDPM) at Manchester University, and by Prof Lloyd Sachikonye at the Institute for Development Studies (IDS) at the University of Zimbabwe. The fieldwork researchers were Mr Batsirai Mubaiwa and Mr Fortune Nhengu (both from IDS), who conducted an intensive period of surveying in four field sites, two suburbs of Bulawayo (Nkulumane and Bulawayo East), and two suburbs of Harare (Highfield and Mabelreign) during October and November of 2005, involving 300 households. The database design and data analysis was conducted by Mr Daniel Neff of IDPM, while the data inputting was completed by Ms Francisca Kern (freelance).


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