Developing countries can also diversify their economies to become less dependent on UK aid, trade, remittances and investment.
"Official development assistance represents only 13 percent of capital flows to developing countries today, compared to 70 percent in the 1960s, and that's because of the growing role of the private sector, trade, remittances and the like".
The LICs' exposure to Europe comes through four channels -- trade, remittances, aid, and finance.
Strong trade, remittance, and banking sector ties with Greece and Italy make Albania vulnerable to spillover effects of debt crises and weak growth in the euro zone.
Peking is in no hurry to take over either of the colonies-whose fortunes, both economic & political, are closely linked-because trade & remittances of funds from overseas Chinese funnelled through Communist banks in the British crown colony and, to a lesser extent, through brances of those banks in Macao, provide it with almost half of its foreign-exchange income of 3 billion dollars a year.
High volumes of cash and electronic funds flow both to and from Afghanistan and Pakistan, the vast majority of which is derived from legitimate trade and remittances.
This compares with an average growth rate of 5.6% between 2004 and 2007, when the region's income was boosted by an improving terms of trade, high remittances from migrant workers and a strong global economy.
However, the Central Asian economies remain tied to Russia - both in terms of trade and remittances from migrants working there.
They should also attempt to lower the lending interest rate and inflation, and increase trade and remittances received to increase investment.
Financial innovation expands economic activities through promoting financial inclusion, facilitating financial transactions in international trade, enabling remittances, and increasing financial efficiency, which eventually plays fundamental roles in economic growth.
Based on the common perception that poverty and income gaps between poor and rich countries are the 'root causes' of migration, and faced with the ineffectiveness and perverse effects of increased border controls, the frequently proposed long-term 'solution' to this phenomenon is to stimulate development in origin countries through aid, trade, or remittances (De Haas, 2007).
