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This year marks a major milestone in terms of the cash flowing to low- and middle-income countries: Remittances are now significantly larger than any other source of funds.

Expand chart
Adapted from KNOMAD's "Migration and Remittances Recent Development and Outlook," April 2019; Chart: Axios Visuals

The big picture: Remittances generally arrive in small chunks, maybe a couple of hundred dollars at a time, but there are a lot of them, and they add up. Today, they're bigger than foreign direct investment, they're much bigger than flows from bond and stock markets, and they're about three times bigger than flows from official sources like the World Bank.

  • The development impact of remittances is enormous, for two main reasons. First, remittances disintermediate most government bureaucracy and go straight to poor individuals. Second, and more importantly, they are the only major foreign-currency flows that do not need to be repaid.
  • In Venezuela, remittances are a literal lifeline — many Venezuelans would die without them, according to World Bank remittances expert Dilip Ratha. And those flows aren't even measured in the chart above, since they take place in the grey market, out of sight of the authorities.

Why it matters: Remittances are a form of decentralized, distributed power — and they amount to more than $700 billion per year, most of which goes to poor people in poor countries. By comparison, total World Bank disbursements in 2018 were $46 billion.

Go deeper

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U.S. intelligence expects a stormy year in the Middle East

A technical team explodes remnant ammunition near Sirte, Libya. Photo: Mohammed Ertima/Anadolu Agency via Getty

Ongoing conflicts, economic crises and the fallout from COVID-19 will likely destabilize several countries in the Middle East in 2021 and could even put some on the brink of collapse, according to the U.S. intelligence community's annual Threat Assessment Report, released on Tuesday.

Why it matters: The report is the most comprehensive assessment the intelligence community produces every year. It paints a portrait of conflicts, insurgencies, terrorism and protest movements across the Middle East.

Updated 7 mins ago - Politics & Policy

Officer Kim Potter arrested, charged with manslaughter in Daunte Wright's death

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Kim Potter, the former police officer who fatally shot Daunte Wright outside Minneapolis on Sunday, was arrested and charged by Washington County Pete Orput with second-degree manslaughter on Wednesday.

Why it matters: The shooting of the 20-year-old Black man in Brooklyn Center, Minn., just ten miles from where George Floyd was killed by a Minneapolis police officer last year, has reinvigorated Black Lives Matter protests and led to three consecutive nights of unrest.

Tech dominates highest paying pandemic internships list

Illustration: Annelise Capossela/Axios

In the past year as the pandemic raged on, some of the world's most valuable companies continued to grow and compensate their workers well above national medians – interns included.

Driving the news: Workplace review platform Glassdoor published its 2021 report today on the 25 highest paying U.S. internships.