Remittances as one of the main benefits of international migration have a great and important
impact on the countries of origins and make migration a topic of special interest for many
researchers. Workers’ remittances represent an important financial flows and a major source of
private external finance for many developing countries, which they receive them in large
quantity. For many economies, remittances represent a sizable and stable source of funds that
sometimes exceed official aid or financial inflows from foreign direct investment. One substantial
drawback of remittances is that it means developing economies lose their best, most skilled
young workers. It can lead to a situation where so many adults have migrated to a richer country;
children are being brought up by grandparents. This has both an economic and social cost. The
economy loses because young workers are not available; society loses out by the displacement
effect of young adults not being there. On the other hand, people wouldn’t undertake the
upheaval of moving to other countries, if they didn’t think their families would benefit and the
country benefits too. The free movement of labor enables greater opportunities for people in
developing economies and also helps developing economies gain important foreign currency
revenue. Developed countries benefit from a more elastic supply of labor, enabling greater labor
market flexibility. Remittances may increase consumption and enhance investments and have a
significant impact to finance economic growth in receiving economies. In particular, migrants’
transfers of funds, being inflows of foreign currencies that can be used to repay foreign debt, are
less volatile compared to other financial flows. For some countries money sent back in the form
of remittances from migrant workers are mostly used for consumption and investments and
comprise a substantial portion of GDP and their balance of payments. This paper examines the
impact of remittances as an income source to finance the balance of payment deficit. First, it
documents the increasing share of remittances relative to other foreign capital flows to Albania
and Southeast countries, distribution of remittance inflows across countries. This is followed by
some analysis of the potential benefits and costs of remittances in recipient countries. The paper
drawing on the case of Albania, Serbia, Bosnia Herzegovina, Moldova, Bulgaria, Romania and
Republic of Macedonia, the paper shows the positive impact that rising remittances can have on
the improvement of current account balance. Finally, also examines the role of remittances in
funding decreasing Albanian National Debt.