The Indian government issued orders withdrawing the validity of existing high denomination (Rs. 500 and Rs. 1000) currency notes on 8th November 2016. Newer currency notes (Rs. 500 and Rs. 2000) were issued subsequently. The move was aimed at tackling counterfeit currency notes and those hoarding untaxed or illicit income. The impact on formal international inward remittances was minimal. MTOs doing cash payouts were impacted in the short run due to unavailability of large denomination currency. Families of migrants also reported problems in withdrawing remittances from ATMs. Formal international outflows were not affected since these are usually made out of bank accounts.
Recent attention has shifted from analyzing the impact of skilled migration on sending country labor markets to a broader agenda that also considers the channels by which diasporas promotes trade, investment, innovation and technological acquisition. Several developed and developing countries are increasing their ties with their Diasporas to take advantage of these transfers beyond remittances. It will be important to assess what could be the potential of strengthening the linkages with their Diasporas for countries in the Middle East and North Africa. Can these countries tap into their Diasporas as a source and facilitator of innovation, research, technology transfer, trade, investment and skills development?
Nolland and Pack (2007) have analyzed whether Arab-communities in North America and Europe can play a similar role as countries in Asia (China, India, South Korea and Taiwan, China) in revitalizing the Middle East. The authors also indicated that “given the limited extent of manufacturing activity in the Middle East and the lack of equivalents to the Indian Institutes of Technology, it would make difficult to benefit from this option.”
For 20 years, BP Agrawal led research and development at such companies as General Dynamics, ITT, GTE, and Hughes, helping take new technologies from lab to marketplace. US-based Agrawal and his diaspora peer had a number of discussions on how they can make an impact in home country (India), and concluded that it is not their financial contributions that would make a difference but rather new commercial models of public service provision. In 2006, he won Development Marketplace awards for River from the Sky, a system of community water provision in draught-stricken areas and in 2007 for, Clinics for Mass Care, a system of mobile, kiosk-based clinics.
Recognition of the poor as a major market opportunity has produced bottom-of-the-pyramid innovation, the hallmark of which is global search for home-grown solutions. Diaspora members are natural vehicles for both global search and diffusion in the local context. In reality, diffusion is all that matters. Thanks to Agrawal’ patience, perseverance and persistence, he was able to enter into partnership with a local government which significantly speeded up the diffusion.
On September 16 Greece announced that it plans to issue a diaspora bond. In the past the governments of India and Israel have raised over $35 billion dollars, often in times of liquidity crisis. Preliminary estimates suggest that Sub-Saharan African countries can potentially raise $5-10 billion per year by issuing diaspora bonds. Countries that can potentially consider diaspora bonds are Bangladesh, Colombia, El Salvador, Ghana, India, Jamaica, Kenya, Mexico, Morocco, Nepal, Nigeria, Pakistan, Philippines, Romania, Senegal, South Africa, Sri Lanka, Uganda, Zambia, and Zimbabwe (and also Greece, Ireland, Italy, South Korea and Spain).
The very name “brain drain” suggests that high-skilled migration can be nothing but bad for developing countries. Indeed, the prospect of a harmful effect of brain drain is often one of the first concerns raised in policy discussions around migration, and every day the news is filled with statements such as “the Philippines is suffering a crippling brain drain”, “brain drain still a big concern” in India; and that Bangladesh “must stop brain drain to take the country forward”.
However, recently there has been a surge of more optimistic views of highly skilled migration, ranging from theories of “brain gain” in which the prospect of migration in the future induces people (including those who end up not migrating) to get more education; the idea of “brain circulation”, in which migrants are meant to do wonders for their home countries once they return with knowledge and ideas from abroad; and the “create-your-own Silicon Valley” view of diaspora as a source of trade, investment funds, and inspiration.
“Name’s John. Hi!” he said.
“Thanks. Glad to meet you. My name is Dilip,” I replied as I put my carry-on bag on the seat and moved aside the pillow and the blanket to make space for myself. After a hectic week at Dakar, I was hoping the seat next to me would be empty. But it wasn’t.
John, my co-traveler, was short, brown, and middle-aged. There was a nondescript baseball hat on his head through which his pony tail hung behind him, long, more pepper than salt. He was wearing brown jeans and blue shirt. He had taken off his shoes and was wearing socks from the travel kit provided by the airline.
“Yes. And from Washington DC, to New Mexico.” He said he lived in the Navajo Nation just south of Colorado.
“Are you returning from the game in South Africa?” I asked.
“Yeah. The first time I saw a soccer game in my life. It was great. I’m a coal miner, in New Mexico. My company sent me to watch the World Cup. We were 150 of us from all over the world. We were there for 5 days.”
I opened the overhead locker to put my bag in before the take-off. “Is that your vuvuzela?” I asked.
“No. Probably belongs to the lady over there.”
“Football, or soccer, is the number one game in the world,” I said.
|Photo © Simone D. McCourtie / World Bank|
India’s Ministry of Statistics and Programme Implementation has just released the “Migration in India 2007-08” report (June 2010) based on the 64th round of the National Sample Survey (NSS). This nationally representative survey includes 125,578 households (79,091 households in rural areas and 46,487 households in urban areas) which together have 572,254 individuals. The report has many interesting findings on internal and international migration and remittances in India, which you can read in the press release. I have highlighted a few that I found interesting:
Almost a third of Indians, or over 300 million people, are migrants. 28.5 percent of Indians (some 325 million people, out of a population of 1.14 billion in 2008) are migrants, according to the survey. 35 percent of people in urban areas and 26 percent of people in rural areas have moved from their place of usual residence.However, migration in India is largely confined to within the same state. 72 percent of migrant households in urban areas and 78 percent in rural areas have migrated within the same state.
The latest March 31 balance of payments data from India’s central bank, the Reserve Bank of India (RBI), shows that India received $50.6 billion in private transfers in the 2009 calendar year. This represents a modest decline (-1.4 percent) compared to private transfer receipts for the 2008 calendar year.
Perhaps more importantly, the data on private transfers - which comprise mostly remittances from Indian migrants - shows that remittance flows to India declined sharply in the first quarter of 2009, but then have picked up in the remaining quarters, with a clear upward trend in the fourth quarter of 2009. Whether this recovery will continue into 2010 is still an open question. Look out for our forthcoming Migration and Development Brief for some answers!
The Economic Times erroneously reported last week that inward private transfers to India reached $55 billion in 2009. The correct figure is $50.6 billion.
|Photo © iStockphoto.com|
In the last few years, many Indian migrants (non-resident Indians or NRIs) have experienced strangers and even relatives taking over their land, tenants refusing to vacate their apartments, and sometimes being cheated by real estate developers. Complex and long judicial procedures have not helped matters. The Ministry of Overseas Indian Affairs, which has been flooded with complaints, organized a session on this issue at the Pravasi Bharatiya Divas, an annual meeting of NRIs in New Delhi this January (see session description and story). India’s buoyant real estate market prior to the current financial crisis appears to have contributed to this phenomenon (see story).
The extent of these problems in the Indian state of Punjab and effective advocacy by NRI Punjabi migrant associations led Punjab’s government to designate certain police stations for NRIs in six districts, set up special revenue counts, and more recently, to create a State Commission, to speed up the resolution of their land and property disputes. Punjab’s Rent Act has been amended to make it easier for NRIs to evict tenants. India’s central government has asked states to appoint nodal officers for civil, judicial and police matters to respond to similar complaints. Although the effectiveness of these measures remains to be seen, these steps are a welcome recognition of the contribution that India’s emigrants make to its economy.