Europe and Central Asia
Remittances to developing countries decreased by 2.4 percent to an estimated $429 billion in 2016. This is the second consecutive year that remittances have declined. Such a trend has not been seen in the last 30 years. Even during the global financial crisis, remittances contracted only during 2009, bouncing back in the following year.
Photo: Gennadiy Ratushenko / World Bank
My colleague Victoria and I had an opportunity recently to meet with students at the Tajik-Russian Slavonic University in Dushanbe, Tajikistan, as part of our research and preparation for a new report called Tajikistan Jobs Diagnostic: Strategic Framework for Jobs.
Curious to learn about their future professional ambitions, we asked one class of students how many of them would like to work in the private sector after they graduate. Only about 10% of the students raised their hands. We also asked them how many would like to work for the government. This time, around 20% raised their hands.
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In 1964, I came to the United States from South Korea, then an extremely poor developing country that most experts, including those at the World Bank, had written off as having little hope for economic growth.
My family moved to Texas, and later to Iowa. I was just 5 years old when we arrived, and my brother, sister, and I spoke no English. Most of our neighbors and classmates had never seen an Asian before. I felt like a resident alien in every sense of the term.
I am the World Bank’s Director for the Western Balkans, and I live in Vienna, Austria, where thousands of refugees, mostly fleeing from conflict in Syria and Afghanistan, are now straggling across the border from Hungary after harrowing trips on crowded boats, uncomfortable stays in makeshift camps, cramped bus rides and long journeys on foot when all else fails.
My father’s parents were refugees to America. They were Jewish peasants from Russia who fled the pogroms of the early twentieth century. My mother’s great-grandparents were economic migrants, educated German Jews who went to Chicago in the mid-nineteenth century to seek their fortune in grain futures and real estate. When my parents married in the early 1950s, theirs was considered a “mixed marriage”: Russian and German; peasant stock and educated elite; refugees and economic migrants. I know the difference between the latter two: refugees are pushed out of their home countries by war, persecution and a fear of death; economic migrants are pulled out of their home countries by the promise of a more prosperous life for themselves and their children.
Thanks to Dilip Ratha and his team at the World Bank, we have an update on global remittance trends. Since it came during Thanksgiving week in the US, some people may have missed interesting highlights from it. I want to draw attention to trends in remittances to ECA*, which have been a source of concern given the continuing crisis situation in the Euro area.
The first good news, which is global in nature but has implications for ECA, is that in 2012 remittances are likely to increase by 6.5% compared with 2011. This demonstrates that global economic trends are better than in 2011, leading to almost $400 billion in remittance flows to developing countries. In addition, the medium term global outlook is that remittances will grow at 8% and 10 % in 2013 and 2014, respectively. This is good news for ECA.