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Migration and Remittances

Closing of bank accounts of money transfer operators (MTOs) is raising remittance costs

Sonia Plaza's picture

As I mentioned in my previous blog, a renewed focus on Anti Money Laundering and Combatting the Financing of Terrorism (AML-CFT) regulations in Australia, the UK, and in the USA are impacting banks and MTOs.

Three effects on the remittance markets are observed. First, Banks stopped offering low cost remittance services. Second, banks closed accounts of MTOs. Two major banks, the Commonwealth Bank and the National Australia Bank, have closed already the accounts of MTOs in Australia. Recently, Westpac announced that it will close the bank accounts of MTOs serving Somalia by the end of this month. And third, small MTOs also closed since they could not any longer operate without bank accounts.  

Migration and Development in the East Asia and Pacific Region: Potential to gain from boosting regular migration

Soonhwa Yi's picture

Remittances to EAP remain buoyant and continue to support macroeconomic stability - projected to increase by 7.0 percent to US$122 billion and to US$127 billion in 2015, as the World Bank’s Migration and Development Brief 24 (Oct 2014) reports.

While steadily declining, the cost of remittances to EAP remains close to 8 percent in 3Q2014, according to the report. Money transfer operators (MTOs) contribute to lowering the cost; and cash-to-cash transfers are likely to cost higher than cash-to-account transfers for receiving countries in the region, highlighting the importance of deepening financial inclusion of migrant families in remittance-receiving countries.

Webinar/Seminar on Migration and Remittances: Recent Developments and Outlook 2014-2017

Dilip Ratha's picture

The Migration and Remittances team at the World Bank is pleased to invite you to the following Seminar/Webinar:

Migration and Remittances: Recent Developments and Outlook 2014-2017

Monday, October 20, 2014
9:00 a.m.-10:00 a.m.
Room MC 8-100
World Bank Main Complex
1818 H Street, N.W., Washington, DC 20433

Presenter: Dilip Ratha, Lead Economist, Head of KNOMAD, Development Prospects Group, Worlld Bank

Long Absence Does Not Necessarily Kill Love

Zahid Hussain's picture



It is said short absence quickens love, long absence kills it.  This is not always true in reality. One case is remittance behavior of long-term migrants. The remittance literature argues that the amount of remittances sent by migrants to their countries of origin declines through time. Reunification of families or breakdown of family ties underpins such behavior. However, the empirical evidence is not all supportive. The passage of time does not significantly influence migrant remittance behavior. Remittances are maintained at high levels over long periods. This allays concern that economies dependent on remittances will face foreign exchange shortages and falling living standards as remittance levels fall because of reduced migration rates and decline in migrants' willingness to remit over time.

What is the Bangladesh experience?  One way to judge is to look at the remittance behavior of Bangladesh diaspora abroad. There is no reliable data on the number and location of Bangladeshi diaspora members. A recent ILO report–Reinforcing Ties: Enhancing contributions from Bangladeshi diaspora members--estimates the number of Bangladeshi migrants living permanently in the United States and Europe at around 1.2 million.

Rural jobs allow people to escape poverty; urban jobs are a ticket to the middle class

Yue Li's picture
South Asia is sometimes known as the land of extremes with opulence surrounded by poverty.

How much social mobility is there in South Asia? The intuitive answer is: very little. South Asia is home to the biggest number of poor in the world and key development outcomes – from child mortality to malnutrition – suggest that poverty is entrenched. Absence of mobility is arguably what defines the caste system, in which occupations are essentially set for individuals at birth. Not surprisingly, the prospects for people from disadvantaged backgrounds to prosper are believed to be gloomier in this part of the world.

And yet, our analysis in Addressing Inequality in South Asia, reveals that economic and occupational mobility has become substantial in the region in recent decades. In fact, it could even be comparable to that of very dynamic societies such as the United States and Vietnam. The analysis also suggests that cities support greater mobility than rural areas, and that wage employment – both formal and informal – is one of its main drivers. 

​When splitting the population into three groups—poor, vulnerable, and middle class—upward mobility within the same generation was considerable for both the poor and the vulnerable. In both Bangladesh and India, a considerable fraction of households moved above the poverty line between 2005 and 2010. Meanwhile, a sizable proportion of the poor and the vulnerable moved into the middle class. In India, households from Scheduled Castes and Scheduled Tribes – considered together – experienced upward mobility comparable to that of the rest of the population.  

Beyond Remittances: How 11 Million Migrants from the Arab World can Impact Development

Mariem Mezghenni Malouche's picture
Arne Hoel l World Bank

The Middle East and North Africa region has a large diaspora. According to the latest United Nations estimates, 11 million citizens from the MENA countries lived abroad in 2013. Many of the members of this group hold prominent positions in their adopted countries. They have the potential to contribute to the development of industries in their countries of origin. Executives in multinationals can influence the choice of locations abroad in increasingly defragmented supply-chains. This is especially relevant for members of the diaspora.  Seddik Belyamani, originally from Morocco, was Boeing's top airplane salesman, and was instrumental in converting an initial push-back by Boeing’s executives into an interest and a first mover investment in Morocco. 

Weekly Wire: The Global Forum

Roxanne Bauer's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

Focus on Migration: Rising migration is a myth
SciDevNet
Hardly a week goes by without media coverage of the fears, in developed nations, that immigrants from poorer countries are overwhelming them. A recent story in the British newspaper The Telegraph — describing how open borders, the “ravages of globalisation”, and a welfare economy have given rise to social resentment — is just one example. [1] Such narratives tap into the popular myth that globalisation has led to a one-way, free flow of migrants from poorer countries — making migration a political issue almost everywhere in the industrialised world.

Facebook is more important to news distribution than you think, and journalists are freaked out
Poynter
Facebook’s Liz Heron answered for a litany of perceived sins and slights last week during a conversation with The Atlantic’s Alexis Madrigal and attendees at the Online News Association conference in Chicago. Journalists are anxious about being left out of the loop about how Facebook works, and they want answers. Does Facebook play favorites in the News Feed Algorithm? Nope, according to Heron, the company’s head of news partnerships. In other words: If you want to be successful on Facebook, don’t get caught up in the nuts and bolts of what it favors or disfavors about posts (and it won’t tell you much about those nuts and bolts anyway, so that works out).

Voting with their feet? Access to infrastructure and migration in Nepal

Forhad Shilpi's picture

Do migrants respond to differences in access to public goods and services in addition to income prospects of potential destinations?  This issue is important in developing countries where provision of basic public goods affects not only income prospects but also quality of life. And in these countries, provision of public goods tends to vary widely across areas.  In a Tiebout (1956) sorting model, such disparity in the provision of public goods such as roads, electricity, schools, hospitals, etc. should induce people to "vote with their feet" and to migrate to areas with better access to these infrastructures and services.

Will South Asia Take Advantage of its Export Opportunity?

Markus Kitzmuller's picture
The Port of Chittagong at night in Bangladesh. South Asia has a great opportunity to increase exports to realize greater growth and prosperity.
​Photo by: Shahadat Rahman Shemul 

Watching export growth across South Asia surge in the recent past leads one to ask the obvious but crucial question: Will this trend continue in the longer term and is South Asia on its way to become an export powerhouse, or has it just been a short term, one-off spurt provoked by external forces?

Clearly, the rupee depreciation following tapering talk in May 2013 and the recovery in the US constituted favorable tailwinds; however, our analysis in the fall 2014 edition of the South Asia Economic Focus finds that there are more permanent factors at play as well. South Asia is no exception to the trend across developing countries of increasing importance of exports for economic growth. While starting from a low base, the region saw one of the starkest increases in exports to GDP, pushing from 8.5 percent in 1990 to 23 percent in 2013.


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