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Remittances

Global Economic Crisis and the Remittance-Unemployment Riddle

Submitted by Jason Gagnon, co-authors: David Khoudour-Castéras on Tue, 12/20/2011 - 10:11

As a consequence of the global economic crisis, 2009 marked a hiccup in the trend of increasing remittance flows to developing countries. In most parts of the world, the growth rate of remittances was indeed negative. But what is striking is that there was an inverse relationship between remittances and unemployment. In other words, the greater the drop in remittances, the higher was the increase in the unemployment rate. In Moldova, for instance, remittances decreased by 36% in 2009, while the unemployment rate increased by 61%. By contrast, in Fiji, remittances increased by 24% and unemployment dropped by 7%.


The scatter plot below illustrates the relationship between changes in remittances and changes in unemployment, both measured as the annual growth rate (in percentage) between 2008 and 2009, for 29 developing countries. The x-axis represents changes in remittances and the y-axis the change in unemployment. The figure shows a negative correlation between the two variables.

Worldwide Remittance Flows updated to $483 billion for 2011

Submitted by Dilip Ratha on Tue, 12/06/2011 - 09:11

We have updated the data on worldwide remittance flows -  including flows to developing countries and high income countries - to $483 billion in 2011. Of this, developing countries received $351 billion in 2011.  Worldwide remittance flows are expected to reach $593 billion in 2014.

Remittance flows to developing countries exceed $350 billion in 2011

Submitted by Dilip Ratha on Wed, 11/30/2011 - 20:05

Officially recorded remittance flows to developing countries are estimated to have reached $351 billion in 2011, up 8 percent over 2010 (See brief).


For the first time since the global financial crisis, remittance flows to all six developing regions rose in 2011. Growth of remittances in 2011 exceeded our earlier expectations in four regions, especially in Europe and Central Asia (due to higher outward flows from Russia that benefited from high oil prices) and Sub-Saharan Africa (due to strong south-south flows and weaker currencies in some countries that attracted larger remittances). By contrast, growth in remittance flows to Latin America and Caribbean was lower than previously expected, due to continuing weakness in the U.S. economy and Spain. Flows to Middle East and Africa were also impacted by the “Arab Spring”.

Consultation on Knowledge Partnership on Migration and Global Development

Submitted by Dilip Ratha on Tue, 11/29/2011 - 16:26

We are planning to initiate a Knowledge Partnership on Migration and Global Development. Please send your comments and suggestions on the consultation draft to migrationteam@worldbank.org.


The Knowledge Partnership on Migration and Global Development will be a global public good. It will seek to highlight the benefits and challenges of migration for sending and receiving communities as well as for migrants. The Knowledge Partnership will:


(i) provide an open, multidisciplinary platform to debate, discuss and exchange knowledge on migration issues;


(ii) generate a menu of policy choices based on evidence and peer-review, and


(iii) will assist sending and receiving countries in implementing a few pilot policy operations and capacity building efforts to evaluate and mainstream a few policy choices.

Infrastructure Projects to fuel GCC Migrant Remittances

Submitted by Y. Sudhir Kumar Shetty on Tue, 11/15/2011 - 13:04

The Gulf Cooperation Council (GCC) states comprising of Saudi Arabia, United Arab Emirates, Bahrain, Qatar, Kuwait & Oman, have gained a unique status from the perspective of migration and the international mobility of labor. What makes the Region distinctive is the fact that migrant population forms a majority of inhabitants.

While the finding of oil resulted in substantial wealth creation for these countries, Governments understood that oil wealth must be used to build a strong post-oil economy. This led to Gulf countries launching ambitious large-scale modern infrastructure projects. A major requirement for implementing this plan was the availability of work force. This was addressed by importing both skilled and unskilled workers from the developing countries, particularly Asia.

Increasing interest in diaspora bonds

Submitted by Dilip Ratha on Mon, 10/03/2011 - 09:02

The side event on diaspora bonds organized during the annual meetings of the World Bank and the IMF attracted significant interest. Senior officials in the Bank considered forming a task force to implement diaspora bonds, while the governors of the central bank of Kenya and that of Bangladesh argued in favor the importance of the diasporas as a source of remittances and investments for their countries. Kenya has issued a new series of infrastructure development bonds and is marketing it to retail diaspora investors until February. The governor of the Bank of Bangladesh also expressed strong interest in issuing a diaspora bonds. Separately, Nigeria's finance minister also issued a press release that Nigeria is going to issue a diaspora bond.


More information on this side event is now posted at http://go.worldbank.org/WC69CPEP60.

Implications of “Nitaqat”, Saudi Arabia's Indigenization Program, Likely to be Modest for Migrants

Submitted by Sanket Mohapatra on Wed, 09/28/2011 - 08:38

Saudi Arabia's recent indigenization effort titled "Nitaqat" came into effect on September 10. Saudi firms have been color coded to four categories - Red, Yellow and Green, and Blue/VIP.  Firms labeled "Red" will not be able to renew their foreign workers' visas and have until November 26 2011 to improve their status by hiring more Saudi natives.  "Yellow" firms have until February 23 2012 to improve their status and will not be allowed to extend their existing foreign employees' work visas beyond six years.  "Green” or “Excellent” firms with high Saudization rates will be allowed to offer jobs to foreign workers that are employed by firms in the Red and Yellow categories and transfer their visas. And firms in the highest “VIP” category will enjoy the ability to hire workers from any part of the world using a web-based system with minimal clearance.

Ethiopia’s new diaspora bond: will it be successful this time?

Submitted by Sonia Plaza on Tue, 08/23/2011 - 08:05

According to the latest issue of the Economist, diaspora bonds an idea worth trying. Ethiopia recently announced the launch of its second diaspora bond: “Renaissance Dam Bond”.


The proceeds of the bond will be used to fund the construction of the Grand Renaissance Dam. This dam will be the largest hydroelectric power plant in Africa when completed (5,250 Mega Watts). The first one was called the Millennium Corporate bond, and was for raising funds for the Ethiopian Electric Power Corporation (EEPCO) . The first diaspora bond issuance did not meet the expectations. Sales were slow during the first months of offering despite the efforts of the Commercial Bank of Ethiopia and the embassies and consulates to sell them. Some risks that the diaspora faced were: i) risk perceptions on the payment ability of EEPCO on its future earnings from the operations of the hydroelectric power; ii) lack of trust in the government as a guarantor; and iii) political risks.

Enlist the diaspora – and remittance service providers – for fighting malaria

Submitted by Dilip Ratha, co-authors: Sanket Mohapatra on Thu, 08/11/2011 - 13:56

Diaspora members and remittance service providers (RSPs) can potentially help the global fight against malaria and other diseases. It is well known that migrants send extra money home for buying medicine and medical services. But medical care for the family members alone is not enough to keep them safe from malaria and other communicable diseases that can spread from elsewhere in the community. Migrants, therefore, may be willing to contribute to fighting diseases at the community level. Only there isn’t an easy way for a diaspora member to contribute to such efforts.

Equal pay for equal work for migrant workers?

Submitted by Sanket Mohapatra on Thu, 07/28/2011 - 13:15

The recent negotiations between Philippines and Saudi Arabia about the minimum living wages for migrant workers have resulted in a stalemate. Philippines is demanding a minimum wage of $400 per month for its workers, while Saudi Arabia is willing to stipulate a minimum wage of $200 per month. Saudi Arabia stopped processing contracts of Filipino workers in March, recently the Philippines has said that it will not send Filipino maids to Saudi Arabia until the dispute is resolved. Saudi Arabia hosts 1.2 million Filipino migrants and accounts for nearly 300,000 overseas deployments annually, while the Philippines receives $1.5 billion annually in remittances from Saudi Arabia. Thus, this wage dispute could lead to loss of employment opportunities for Filipinos, involve cost of reintegrating returning workers, and a reduction in remittance flows -- all of which could adversely impact the Philippine economy.