Remittances and poverty: the case of the Comoros.

Summary The objective of this study is to measure the impact of external remittances on poverty in Comoros. Remittances to Comoros were estimated at USD 117 million in 2010, representing 24 percent of GDP. Remittances are by far the largest external resource of the Comoros, ahead of official development assistance, which represents about 10 percent of GDP. The vast majority of Comorian migrants who send remittances are low-skilled workers (66 percent). Conversely, almost half of the beneficiaries are from the poor classes. The "Big Wedding" is the main reason for sending remittances. Two methods of analysis were developed in this study: one descriptive and the other econometric. The econometric approach considers remittances as an endogenous data, resulting from an "implicit contract" between migrants and recipients. The conclusion of the study is that remittances contribute to a reduction in poverty indices. The impact on inequality is mixed. The incidence of poverty (P0) decreases by -3.5 percent as a result of remittances. Depth (P1) and severity (P2) decline by -7.4 percent and -5.8 percent respectively with remittances. Remittances have a greater impact on poverty for the following categories of households: those living in rural areas, those living in Grande Comore, those headed by women, the unemployed and the inactive. It can be seen that it is the categories of households that benefit most from remittances in terms of per capita expenditure that have the greatest impact on poverty reduction.