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A blog about migration, remittances, and development

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This blog is hosted by Dilip Ratha, lead economist at the World Bank. Its goal is to leverage migration and remittances for development.  
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August 2008

How remittance securitizations can help developing countries during a credit crisis

Submitted by Sanket Mohapatra on Wed, 08/27/2008 - 17:14

Despite the current economic climate, a recent Standard & Poor's research report found that remittance securitization and securitization of other future flow receivables in emerging markets are performing well, bucking the trend in global credit markets.

In a 2005 paper by Suhas Ketkar and Dilip Ratha, the authors found the securitization of future remittances and trade, tourism, credit card and other future receivables (together called "Diversified Payment Rights" or DPRs) are a useful tool that can help developing countries maintain access to international capital markets especially in times of crisis.

Dilip’s research as well as the World Bank’s 2006 Global Economic Prospects report, emphasizes that one of the reasons for the robust performance of this asset class is the "countercyclical" nature of remittances.

The S&P report backs this up by stating, "Some of these, such as worker remittances, also offer the benefit of countercyclical performance: that is, their flows often increase when domestic economies weaken...Investors often value worker remittances for their countercyclical nature: that is, workers typically send more money home during periods of economic crisis in their native countries."

Making mobile banking affordable

Submitted by Sanket Mohapatra on Tue, 08/26/2008 - 09:49

Adding to my earlier post about card based technologies, m-banking services are far cheaper than brick and mortar banks, but these can be costly compared to a poor person's income.  The Consultative Group to Assist the Poor (CGAP) has a head-to-head comparison of how the prices of the top branchless banking service -- GCash, Smart Padala, M-Pesa, Wizzit and MTN -- stack up against the top four banks in South Africa. The Filipino m-banking services and M-Pesa come out on top in terms of cost and affordability for the poor, while the South Africans providers are relatively more expensive.

New: Teething problems for mobile money transfers? See why Kenyan commercial banks are objecting to the MMT firms such as Safaricom’s M-Pesa which have become enormously popular and grown their customer base exponentially.

Climate change and the migration fallout

Submitted by Sonia Plaza on Mon, 08/18/2008 - 18:19

The impact of sea level rise from global warming could be catastrophic for many developing countries.  The World Bank estimates that even a one meter rise would turn at least 56 million people in the developing world into environmental refugees. 

Negociaciones Comerciales entre la UE y la CAN están afectadas debido a la “directiva de retorno"

Submitted by Sonia Plaza on Sat, 08/16/2008 - 12:21

Según declaraciones de la Presidente del Parlamento Andino, Ivonne Baki, “las negociaciones entre la Unión Europea y la Comunidad Andina de Naciones no se encuentran encaminadas debido a la directiva de retorno”. Algunos países en Europa, como Suecia han decidido modificar la directiva. ¿Es que otros países europeos harán lo mismo?  Ver nota sobre la Directiva de Retorno aprobada por la Union Europea en el blog anterior. 

Trabajadores de construcción latinoamericanos arrestados en Estados Unidos por no contar con permiso de trabajo

Submitted by Sonia Plaza on Thu, 08/14/2008 - 17:29

El Servicio de Inmigración y Control de Aduanas de Estados Unidos (ICE) detuvo a 42 trabajadores bolivianos que estaban trabajando en el aeropuerto de Dulles en Washington D.C. sin contar con el permiso de trabajo necesario el 13 de Agosto del 2008. El operativo se llevo a cabo a través de puntos de control en las cuales los agentes verificaron le identidad y el estado migratorio de los trabajadores que ingresaban a sus recintos de trabajo.  Cerca de 200 trabajadores fueron entrevistados en los puntos de control. Alrededor de 42 trabajadores no pudieron probar su presencia legal en los Estados Unidos y fueron llevados a los centros de detención en Virginia. Diferentes asociaciones de inmigrantes, abogados de inmigración, familiares y el Embajador de Bolivia han solicitado que los trabajadores tengan la oportunidad de contar con un abogado que los represente en este proceso de detención e inmigración. (Ver communicado del ICE)

 

 

Remittances go beyond snail mail - Card based technologies promise to revolutionize micro payments

Submitted by Sanket Mohapatra on Wed, 08/13/2008 - 10:24

New card-based remittance technologies are now starting to be used for a variety of payments, including the delivery of public assistance to those in remote rural areas.

The use of prepaid/reloadable “smartcards” and “cash cards” promises to revolutionize the delivery of both private and public payments at the micro-level. Smartcards that use biometric technology for identification have been distributed by a card-provider FINO to nearly half-a-million people in rural areas in India receiving payments under the Indian government’s National Rural Employment Guarantee (NREG) scheme. Salaries of some Ghanaian government workers will be deposited directly into their e-zwich Smartcards which also uses a similar biometric technology, in a scheme piloted by the country’s central bank.

The Indonesian government is distributing cash payments through the national postal system to help poor families weather the shock of rising oil prices, according to an FT article. A previous attempt using this method reportedly reached more than 90 percent of the target audience. And in Malawi, schemes in the UN-supported Millennium Villages development project have distributed cash-cards to local people. Card-based remittance technologies can also be used for conditional cash transfers (CCTs) where families get assistance in return for socially beneficial behavior. 

¿Será que el nuevo programa de la Agencia de Inmigración y Aduanas de los Estados Unidos dejara a muchos en el aire?

Submitted by Sonia Plaza on Fri, 08/01/2008 - 11:43

¿O será que los extranjeros y sus familias se beneficiaran de esta medida coordinada para la salida del país una vez que se ha otorgado la deportación a algún miembro de la familia?

El Servicio de Inmigración y Control de Aduanas de Estados Unidos (U.S. Immigration and Customs Enforcement o ICE) anunció el 31 de Julio de 2008 un nuevo programa piloto: "Salida Programada", que comenzará la próxima semana en cinco ciudades del país. El programa tendrá una duración del  5 de Agosto al 22 de Agosto. El programa piloto podría ser ampliado según los resultados del piloto.

De acuerdo al comunicado del ICE, “el programa permite a los inmigrantes que no tienen antecedentes penales y que no representan una amenaza a la comunidad la posibilidad de permanecer fuera de prisión, mientras que coordinar su salida del país con el ICE”. 

¿Funcionara esta nueva iniciativa piloto? ¿Cómo una persona puede estar segura de que él o ella no será detenido?; ¿Qué va a pasar con las familias que tienen familiares que son residentes o ciudadanos de los Estados Unidos y sólo el padre (o la madre), han sido deportados?

Remittances and natural resources: apples and oranges

Submitted by Dilip Ratha on Fri, 08/01/2008 - 10:00

The July/August issue of Foreign Policy has a short feature highlighting the "dark side" of remittances. It cites an IMF study which argues:

"High levels of remittances often lead to greater corruption and irresponsible economic policies; and officials in remittance-rich countries are often let off the hook for failing to provide basic services, freeing them to divert resources for their own purposes. This gives citizens less of an incentive to demand reforms."

I am not persuaded. Is it not the other way around? When governments fail to provide basic services, people are forced to fend for themselves.
 
Remittances can buy only private services like tuition, health care, or water for the family; they cannot build roads, dams, and airports. Sometimes hometown associations or diaspora organizations fund a school or a park or a cemetery back home, but such "collective remittances" tend to be minuscule compared to the needs of the community and to the total volume of personal remittances. (The largest number I have seen for collective remittances to Mexico is about a $100 million, compared to personal remittances of $25 billion.)
 
The title of the Foreign Policy piece, "The Remittance Curse," invokes the idea of "the resource curse" which refers to rent-seeking and governance problems in resource-rich countries. Remittances, however, should not be compared to revenue from natural resources. Remittances are distributed among a large number of people. (In that sense they are akin to distributing oil money from an airplane!) And they are persistent over time, unlike natural resource windfalls. Remittances reduce poverty and lend voice to the people.