MENA has always had low private investment both domestic and foreign. However, the political and economic unrests post the ‘Arab Spring’ raised the necessity of a dynamic and growing private sector than ever before. The dominant economic role of the public sector in MENA cannot endure, especially with the escalating unemployment rates, budget deficits, heavy dependence on food and manufactured imports, vulnerability to oil and foreign currency swings besides the challenging social and political environments.
It was early 2001, I think, when I got a call inquiring about future-flow securitization of remittances. She was preparing for a talk at the UN, the caller said, and she was intrigued by yet another way in which remittances impact the migrants’ country of origin. That was two years before I began my research on remittances. The caller that day was Dr. Sharon Stanton Russell, a pioneer in the field of remittances and migration, a mainstay of migration studies at MIT and the Inter-University Committee on International Migration (IUCIM).
Sharon passed away on February 27, 2013. More than 300 people attended her funeral on March 23.
Standard trade literature tends to view migration and trade as substitutes. In that framework, either workers migrate to satisfy foreign demand or foreign demand is satisfied by trading goods and services. There is a growing literature, however, emphasizing that migrant networks facilitate bilateral economic transactions by disseminating their preferences for goods from their country of origin and/or by removing informational and cultural barriers between hosts and origin countries. In this case, migration would reduce transaction costs associated with trade and may be a complement rather than a substitute to trade.
Even as the US media is in a frenzy about comprehensive immigration reforms - long overdue, but in terms of detail, still more forest than trees - there is another sense of urgency about how might migration feature in the post-2015 development goals (see my earlier blog).
On the eve of the international migrants day, many people are debating how migration might feature in the post-2015 development goals. There is no doubt that migration - international and internal - affects several of the current MDGs: poverty, education, health of children and mothers, environment, gender, and also several elements of a global public good such a role in financial and natural crisis. Migration directly impacts the migrants, their families and their employers, and also impacts development indirectly. Development in turn impacts migration. There is no doubt that migration is a very important driver of development. And yet, since it directly challenges national identity and sovereignty, it is not easy to arrive at a consensus on specific migration targets.
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.
I just attended the Global Forum on Migration and Development (GFMD)in Mauritius last November 21 -22, 2012. It was the first time that the GFMD was chaired by an African country. It was also the first time that the World Bank was invited to be a presenter (we are only observers in these meetings) in the Round Table - Supporting Migrants and Diaspora as Agents of Socioeconomic Change, co chaired by France, Kenya and Morocco. The Bank also wrote jointly with IFAD and IOM the background paper for this session.
In order to provide an ownership structure in Pakistan for remittance facilitation, State Bank of Pakistan (the central bank), Ministry of Overseas Pakistanis and Ministry of Finance launched a joint initiative called Pakistan Remittance Initiative (PRI) in early 2009. This initiative has been taken to achieve the objectives of (a) facilitating and supporting efficient flow of workers’ remittances and (b) catering for other financial services needs of Overseas Pakistanis and their families back home.
Thank you to all who attended yesterday’s live seminar/webinar on the ‘Latest Trends in Migration and Remittance Flows Worldwide’. The session focused on the continued resilience of remittance flows to the developing world, and globally, despite the continued fallout from the global financial crisis. In my presentation, I reported on the latest trends in remittances and migration flows and discuss a new World Bank initiative on migration and development, the Global Knowledge Partnership on Migration and Development (KNOMAD).
Many of you have requested a copy of my powerpoint presentation from the session, so here it is.