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Daily Maverick
13 hours ago
- Business
- Daily Maverick
Foreign transfers are now flowing mostly North to South via remittances — World Inequality Lab report
A new study from the World Inequality Lab covers a lot of ground but one of the things that sticks out is that financial transfers are now moving mostly in a North-South direction – because of remittances. This is a striking contrast to the colonial era that defined the 19th century. The World Inequality Lab, a think-tank fronted by the economic historian Thomas Piketty, has produced a new study that looks at the unequal North-South wealth exchange through the prism of global trade flows and balance of payments over the longue durée from 1800 to 2025. Piketty is a prolific author and public intellectual whose work is focused broadly in readable and insightful ways on the history of inequality. Piketty's latest effort is typically trailblazing and is erected from the foundations of a vast new database on global trade flows and the world balance of payments from 1800 to the present. The study, co-authored by Gastón Nievas, covers a lot of ground but one of the many things that stands out is how financial transfers are now moving in a North-South direction – largely because of remittances. This is a striking contrast to the colonial era that defined the 19th century. 'No country or world region has ever received foreign income inflows approaching the magnitude of Europe's in the 19th century,' the study says. This accumulation of foreign wealth to the European colonial powers – an extractive process – had many taps: France imposed a large debt in Haiti in 1825 to compensate former French slave owners for the loss of their property(!), Britain saddled China with a debt from the Opium War, and there were also massive transfers of tax revenues from colonies to the metropolis. 'Today, financial transfers mostly flow from North to South, particularly through private remittances, rather than from South to North, via colonial transfers. For instance, sub-Saharan Africa received very large cumulated net transfer inflows between 1970 and 2025 (the equivalent of +64% of its 2025 GDP), approximately as much as the cumulated foreign income outflows (-55%),' the authors write. So one of the many trends the study has unearthed is that Africa's inflow of financial transfers since 1970 has exceeded its outflows, and this is mostly explained by wage and salary earners from the continent working abroad and sending part of their income home – and in a big way. These findings come against the backdrop of a rising tide of xenophobia and racism in Europe and North America, fuelled on the far right by the 'Great Replacement' conspiracy theory which holds that white folks up North are being 'replaced' by a tsunami of dark-skinned migrants from the South. Of course, there has been significant migration in recent decades from South to North, not least because of the labour market needs in advanced economies with ageing populations. Far-right shrills in the US and France who want to shut down such migration will shut down their own economies in the process. The findings also underscore the importance of remittances to regions such as Africa. For families these can be literal lifelines of income support, and multiplied many, many times they amount to vast inflows of capital which are at odds with perceptions of capital flight. Remittances, of course, can also create a dangerous economic dependency for the countries on the receiving end that can evaporate if the needs of the labour market change or an isolationist regime builds a wall. Lesotho offers an arresting example on this front. As this correspondent has previously reported, during the peak of South Africa's gold production under apartheid – which relied on a ruthlessly exploited pool of migrant, rural labour – remittances from the wages of Basotho working underground here amounted in 1987 to an astonishing 236% of the mountain kingdom's GDP. They now equal 21% of GDP, according to World Bank data – a 'remittance shock' without parallel in modern global economic history. South Africa's mines once employed almost 500,000 foreign workers. That number, according to the last available data, stood at 35,000 in 2022. This explains why so many Basotho are now 'zama zamas' at the bottom of the exploitative and transnational criminal pyramid of illicit gold mining. Lesotho's economy has not developed or industrialised in meaningful ways to provide jobs and domestic economic opportunities for its labour force. Exploited by the legal gold industry in the past, many of its young men are now exploited by the illicit sector in the precious metal. Does that stand as a warning for Africa more widely? Certainly there is a lot of talk these days about industrialisation and the 'beneficiation' of minerals and stuff like that. And remittance inflows to Africa are clearly important and at a scale larger than many have perhaps assumed. Africa notably between 1970 and 2025 had a cumulated trade surplus from primary commodities that equalled close to 200% of its GDP, but a trade deficit in manufactured goods equal to 169% of its GDP. It is surely no bad thing to develop your economy and raise the living standards for most of your population through processes such as industrialisation, and not just as a precaution if the remittance flows are suddenly staunched. But for now, remittances are flowing one way, and that in itself speaks to enduring global disparities in economic opportunity. DM
Mint
27-04-2025
- Entertainment
- Mint
When we mock the working class, the joke is on us
I am constantly filled with admiration for people's inventiveness online—the complex dance routines, the sketches where you play four different people, the straight-faced delivery of the world's worst (by which I mean the best) jokes. I have a big deadline next month and I have done that thing that never helps anyone's productiveness—I have deleted the apps that suck me in. And in there lie the clever people. Sadly, the last two 'bits" I saw were the opposite of inventive. To be honest, they were kind of the worst (by which I mean the worst). In video No.1, we first see a young woman in a sari, making a tired gesture as she leaves an apartment, apparently after cleaning up. What we see next is a montage of apparent martyrdom—the woman's employer putting things away (rugs, mats and so on) and adjusting other things to an exact angle (bins, buckets and so on). I have to admit I didn't watch the whole thing because my eyes had rolled out of my head and fallen on the floor. Perhaps the video was rage-bait, content created deliberately to make viewers bang out 'are you a crazy person?" over and over again in the comment section. I certainly wanted to type, 'you have so much free time! You have so much free time to make this evil video because that woman cleaned your house, including under the bins and buckets." I didn't because only typing when I have a hope of getting paid is the new secret to my productiveness. Sort of. In video No.2, we are shown various people looking important in an office/house under construction and then we see a painter sitting on the floor with a brush in one hand asking someone on the phone: Do you love me or don't you? The comment section was almost entirely 'hahaha so funny they are like that only." Both these videos are the opposite of inventive, leaning so hard as they do on ye old 'lazy servant" gag. At this point, making fun of the working class in India as lazy can only indicate your being on hallucinogens. According to the World Bank in 2024, almost 129 million Indians are living on less than ₹ 181 a day, that is, in extreme poverty. Also, in 2024, we learnt from the World Inequality Lab that the gap between India's rich and poor is now wider than it was under British colonial rule. In case all of that sounds abstract, most low- and middle-income families are only one hospital admission away from being cleaned out financially. Should we be surprised that white-collar workers are still so, let's say, clueless about where their position in the world is? Do they not see yet another CEO demanding that they work 100 hours a week, not smile at their wives, take less holidays and understand that they are cogs in a wheel that is merely enriching someone else? If CEOs had a private social media network of their own (as opposed to public podcasts), for sure they would be posting videos of you calling your girlfriend and their CEO pals would be commenting 'hahaha so funny they are like that only." For sure they would be posting martyrdom videos of them changing the fonts on the Excel sheets you made. White-collar workers imagining they are special is what stands in the way of labour rights. We squeeze the working class and congratulate ourselves for being the most hardworking everywhere, for our hustle—as if we don't have a little mattress top, memory foam cushion to fall into. A cushion that can be depleted in three hospital admissions but never mind. Historically, every single right that the white-collar worker possesses has come from a working-class fight, including the 8-hour workday that gives CEOs a rash. In many countries, a multinational would have to work hard to achieve the dystopic state where they can allegedly make workers pledge (in a heatwave) that they would not take any breaks to drink water or go to the loo. But in India, we have decades of practice in making workers get kidney disease—across sectors. We live in a country where the government recently announced that it is not practical for locomotive drivers to take breaks to eat or use restrooms. Train drivers have to wait till the end of their shift. The railway ministry told The Hindu that since 2016 the 'duty hours of loco pilots were reduced from 10 hours to nine." Or they have to wait till the government manages to fit a loo into the locomotives. They have managed to fit 883 out of 15,000 since 2018 so that's going to be a long time to hold it in. And while we white collar-workers are making evil videos and drinking the hustle Kool-Aid, the working class is fighting to get labour rights back. Human rights lawyer Sudha Bharadwaj wrote in Frontline a few months ago, that even though labour rights have been shredded in India, 'the working class does not stop fighting—be it anganwadi workers pouring into Mumbai's Azad Maidan to demand better wages, the workers of the Samsung factory in Chennai insisting that their union be recognised, the tea estate workers of West Bengal demanding minimum wages, or the workers of Maruti Suzuki demanding reinstatement after 12 years of incarceration. Even if they are ignored by the media and the powers that be, they are very much there, everywhere, invisible like the dust, and just waiting for a storm to enter our eyes." I wondered if other countries have the same no loo in the locomotive problem. Apparently they do in the UK and there the procedure is that you call the signaller, ask for what is known as a personal needs break and the controller holds the train for a few minutes. Because human beings have personal needs. And calling your girlfriend to ask if she really loves you is a personal need. Nisha Susan is the author of The Women Who Forgot To Invent Facebook And Other Stories. She posts @chasingiamb.
