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Can migrant remittances build resilience to natural disasters?

Sanket Mohapatra's picture
   Photo © iStockphoto.com

Floods, earthquakes and hurricanes cause significant loss of life and destruction of property in many countries. The incidence of such disasters has increased in recent years. There is a growing consensus, however, that being better prepared against natural disasters can be equally or more effective than immediate aid and relief.

Several studies have shown that migrants send additional remittances after severe shocks. However, there is little evidence of whether and how they help households prepare for natural disasters. In a recent paper for a forthcoming World Bank-UN assessment of the economics of disaster risk reduction, we analyze cross-country macroeconomic data as well as a number of household surveys to examine the "ex-post" response of remittances to natural disasters and their contribution to "ex-ante" preparedness. 

Remittances to East Asian countries now expected to fall 6 to 8.8 percent in 2009

James I Davison's picture

A few weeks ago, the World Bank’s migration and remittances team released its latest forecast of global remittance flows, indicating that even fewer migrants from developing East Asian and Pacific countries may be sending home money this year than they predicted in an earlier report. Remittances flowing to countries in the region are now forecast to fall by 5.7-8.8 percent in 2009, according to the report (pdf). Revised 2008 data show China, the Philippines and Vietnam are in the top 10 recipients of remittances among developing countries.

Interestingly, despite indicating falling remittance flows to the East Asia and Pacific region, the outlook states that South and East Asian countries have been relatively strong. There is, of course, a risk of a further slowing down. For example, remittance money flowing to the Philippines appears to still be growing this year. But such positive flows went from 14 percent year-on-year growth in 2007-08 to just 3 percent growth so far in 2009, according to the report.

The report’s authors write that there may be key risks that further threatening global remittance flows to developing countries – including a longer-than-projected financial crisis threatening jobs and income for immigrants in developed countries. However, they write, recovery may come by next year: “We expect that remittance flows to developing countries could decline by 7-10 percent in 2009, with a possible recovery in 2010 and 2011.”

What’s the significance of remittances? One notable example came from blogger Eric Le Borgne last April. Eric pointed out that remittances are a key factor to the economic health of the Philippines, as well as the country’s resilience so far during the global financial crisis.

Climate dilemmas in Central Asia

Rasmus Heltberg's picture
    Photo © Rasmus Heltberg/World Bank

How should climate change be addressed in Tajikistan, the poorest and—according to a World Bank regional assessment, most climate-vulnerable—country in Eastern Europe and Central Asia?1  On a recent visit to this scenic nation to assess the poverty aspects of climate change, we struggled with this seemingly simple question. Answers remain elusive, given the country’s daunting climate dilemmas. So, while in Dushanbe, I attempted to write about the range of the challenge.

First, consider Tajikistan’s thousands of glaciers, many of which are receding. As they melt, farmers downstream enjoy plentiful water supply and see no need to take action. However, once the glaciers are gone, dry rivers and extreme water scarcity could mean the end of farming livelihoods in some areas.

India is the top recipient of remittances

Dilip Ratha's picture

With Sanket

Newly available data show that remittance flows to developing countries reached $328 billion in 2008. In India, flows were stronger than expected in 2008 reaching $52 billion, up 34% compared to a year ago, and higher than our earlier estimate of $45 billion. India retains its position as the top recipient of migrant remittances among developing countries, followed by China, Mexico and the Philippines (figure 1).

Figure 1. India was the top recipient of migrant remittances among developing countries in 2008
 

"Guest Worker" - an oxymoron?

Dilip Ratha's picture

In many cultures, the term "guest worker" would be an oxymoron. Yet policy makers in both receiving and sending countries seem to like guest worker programs. The hope is that guest workers will fill labor shortage in the receiving countries, and at the end of an employment contract go back home with money and some new skills. There is also a belief that temporary migrants will remit more of their savings back home than migrants who plan to stay on in the destination country (often called the "host country", another oxymoron?).

Announcing the International Conference on Diaspora for Development, July 13-14, 2009

Sonia Plaza's picture

The Migration and Remittances team of the Development Economics and Prospects Group (DEPG) of the World Bank is organizing an International Conference on Diaspora and Development on July 13-14, 2009 in Washington D.C. You are invited to participate in this conference and join economists, policy makers and other colleagues in the discussions. 

The diaspora of developing countries can be a potent force for development for their countries of origin, through remittances, but more importantly, also through promotion of trade, investments, knowledge and technology transfers. The conference aims to consolidate research and evidence on these issues with a view to formulating policies in both sending and receiving countries.

EU just approved the Blue Card: Are there advantages for developing countries?

Sonia Plaza's picture

On May 25th, 2009, the European Council adopted the EU Blue Card directive which was initially agreed upon by the European Union’s interior Ministers under the European Pact on Immigration and Asylum in September 2008.

According to the directive, the Blue Card will attract high skilled workers from a third-country into the EU- member states’ labor market and will have a period of validity between one and four years depending on the contract.  The directive rules state that EU Blue Card holders will be treated equally with nationals of the member state issuing the Blue Card in certain areas such as working conditions, education, and a number of provisions in national law regarding social security and pensions. The card will also allow the visa holder to bring in family members with him or her in the EU country where the job is located.

International migration by men affects labor market participation by women at home

Gero Carletto's picture

While the beneficial impacts of migration and remittances on social welfare have been well documented, we know very little about the effects of migration--mostly by men-- on the local labor market behavior of women. To help address this gap, Mariapia Mendola (of the University of Milan) and I explored the gender aspects of migration and economic development in Albania over the past fifteen years. We decided to examine Albania during this period in greater detail because economic hardship during transition fostered massive migrant outflows, mostly to neighboring Greece and Italy. Also, male migration is an ordinary and widespread phenomenon in Albania.

Using unusually detailed international migration histories from the 2005 Albania Living Standards Measurement Survey, we found that Albanian households with family members (mostly sons and daughters) living abroad are less likely to have women in paid employment. However, male spouses with past migration experience exert a positive influence on female self-employment. The same effect is not seen for men when women migrate. Our findings suggest that over time, male-dominated, shorter-term migration may increase the income-earning opportunities for women at home.

Our working paper based on this research was published last month in the World Bank's Policy Research Working Paper series.

Finding ways to improve migration data

Ani Silwal's picture

A constant struggle facing researchers and policymakers tackling migration issues is a lack of good data. The Center for Global Development recently released “Five Steps Toward Better Migration Data,” an excellent report on concrete steps governments and non-governmental organizations can take in the short run to fill this gap. 

This report is particularly important in the context of a new round of census taking in 2010. The five recommendations are to: 

  1. Ask basic census questions and make the data publicly available; 
  2. Compile and release existing administrative data;
  3. Centralize labor force surveys; 
  4. Provide access to microdata, not just tabulations; and 
  5. Include migration modules on more existing household surveys.

Given the abundance of recommendations in the development industry, a laudable effort is the accompanying report card (PDF) which tracks countries’ progress with respect to the recommendations.

Event Announcement: The Impact of the Economic Crisis on Migration and Remittances, June 1, 2009

Neil Ruiz's picture

The Migration and Remittances Team of the Development Economics Prospects Group (DECPG) of the World Bank is organizing a brown bag lunch seminar on "The Impact of the Economic Crisis on Migration and Remittances" on Monday, June 1, 2009 from 12:00pm-1:30pm, at the Main Complex of the World Bank, 1818 H Street NW, Room MC5-100.  Two eminent scholars, Bimal Ghosh (Colombian School of Public Administration)  and Manuel Orozco (Inter-American Dialogue) will present their views on how the economic crisis is effecting migration and  remittances world-wide.  The event will be chaired by Dilip Ratha, Lead Economist, DECPG. 

This event is open to the public.  If you would like to attend the brown bag lunch seminar, please RSVP by emailing Claudia Carter at: ccarter@worldbank.org

 


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