Labour migration is one of the key forces of socioeconomic development. Relationships between migration and development are complex and multidimensional. Migration of people endowed with high levels of ‘human capital’ is beneficial and it helps the economic growth and development of many countries in the developing world such as Bangladesh, China, India and the Philippines. The emigration in labour surplus in developing countries provides a ‘safety valve’ for unemployed youth and relieves pressure on the labour market. Migration is also seen as one of the major contributors to population changes, which have significant impact on the process of development.

Globalising processes have prompted a ‘brain drain’ through large-scale emigration and also a ‘brain gain’ through returned skilled migrants. Some Asian countries, such as China, India and the Philippines, for example, see a shift from ‘brain drain’ to ‘brain gain’ as a result of their proactive policies to attract back emigrants with acquired skills and education (International Organisation of Migration 2005: 19). Hugo et al. (2001: 9) also found that countries such as China, India and Korea were witnessing ‘hyper mobility involving remigration and return’. The outflow of human capital resources is seen to be beneficial to some developing countries due to the foreign exchange earnings generated through remittances. In many developing countries, remittances constitute a more important source of income than the Official Development Assistance (ODA) and Foreign Direct Investment (FDI) (Global Commission on International Migration 2005: 85).

Globally, the formal transfers of remittances were about $A202 billion in 2004 and another $A404 billion were transferred informally (Global Commission on International Migration 2005: 85). Remitters use informal channels because they are cheaper and better suited to transferring funds to remote areas where formal channels do not operate (Ratha 2004). The formal transfers of remittances almost tripled the value of ODA and were the second largest source of external funding for developing countries after FDI (Global Commission on International Migration 2005: 85). According to the report of the Global Commission on International Migration, the three leading remittance-receiving countries in 2004 were Mexico ($A21.5 billion a year), India ($A13.4 billion) and the Philippines ($A12 billion).

Remittances, Internet communication and access to travel, together with the support of migrant communities within the diaspora and hometown associations all provide the conditions for the transnational migrants to reside abroad and maintain ties with their country of origin, and are creating powerful tools for development (International Organisation of Migration 2005: 15). The role of remittances in economic growth and development is debatable, but many agree that remittances can help alleviate poverty and play a critical role in economic growth and development.