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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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Remittances

Migration and Remittance Trends 2009: A better-than-expected outcome so far, but significant risks ahead

Submitted by Dilip Ratha on Tue, 11/03/2009 - 10:06

With Sanket and Ani

We have just released Migration and Development Brief 11 (see accompanying presentation) reporting latest data on remittance flows. Newly available data show that officially recorded remittance flows to developing countries reached $338 billion in 2008, higher than our previous estimate of $328 billion. Based on monthly and quarterly data released by some central banks and in line with the World Bank’s global economic outlook we estimate that remittance flows to developing countries will fall to $317 billion in 2009. This 6.1 percent decline is smaller than our earlier expectation of a 7.3 percent fall.

By now it is clear that existing migrants are not returning even though the job market has been weak in many destination countries; instead they are staying on longer and trying to send money home by cutting living costs. New migration flows are lower due to the economic crisis, but they are still positive. We maintain our expectation of a recovery in migration and remittance flows in 2010 and 2011, but the recovery is likely to be shallow.

Diaspora Latina, remesas y crisis económica

Submitted by Sonia Plaza on Thu, 10/29/2009 - 18:02

Acabo de realizar una podcast entrevista con Ximena Gutiérrez (coordinadora del sitio web del Banco Mundial en español www.bancomundial.org) sobre cómo la crisis financiera mundial esta impactando a la “diaspora latina”, a la demanda laboral de los trabajadores migrantes y a los flujos de remesas a América Latina.

US banks’ actions to close small money transfer companies’ accounts may reduce legitimate options for sending money home

Submitted by Jacqueline Irving on Tue, 10/27/2009 - 19:11

US-based migrants may find it much harder to opt for formal channels in sending money to needy family members overseas because of an increasing tendency on the part of a number of US banks to close down the accounts held by small, niche money transfer companies—including many that are in full compliance with licensing, auditing, customer reporting and other regulatory requirements of US state and national authorities.

Remittances to Central Asia are falling, but less so in ruble terms

Submitted by Sanket Mohapatra on Thu, 10/08/2009 - 13:25

Remittance flows to several Central Asian countries appear to be declining precipitously in the first half of this year, raising concerns that these flows are less resilient in the Europe and Central Asia region than in other developing regions. Remittance flows in US dollar terms to Kyrgyz Republic, Armenia, and Tajikistan declined by 15 percent, 33 percent and 34 percent respectively in the first half of 2009 compared to the same period last year.
 
Most of remittances to these three Central Asian countries come from Russia. From a survey of central banks that we conducted last year, Russia reportedly accounts for more than four-fifth of remittance inflows in Kyrgyz Republic and Armenia, and it was the top source country for remittances to Tajikistan. Driven by increasing emigration, primarily to Russia, remittance flows more than doubled in Kyrgyz Republic and Tajikistan US dollar terms between 2006 and 2008, while personal transfers through banks in Armenia increased by some 70 percent.  

Second International Migration and Development Conference

Submitted by Çağlar Özden on Mon, 09/28/2009 - 15:53

The World Bank, jointly with Agence Française de Développement (AFD), organized the Second International Migration and Development Conference on September 10-11th. The organizing committee consisted of Caglar Ozden and Maurice Schiff of the World Bank and Hillel Rapaport of Bar Ilan University (currently visiting Harvard University). This was a follow-up of the conference in Lille, France in June 2008, after which AFD agreed to sponsor a conference every year. The next conference is scheduled to be held at the Paris School of Economics in June 2010, hosted by Francois Bourguignon, former Chief Economist of the World Bank.

The conference program included the latest papers by the leading academics and researchers addressing a wide range of issues on the development and the migration nexus. Among the topics were migration and institutions, illegal migration, link between poverty and migration, human capital formation and migration, self-selection, migrant networks and social externalities. A total of 38 papers including two keynote addresses via parallel sessions were presented.  

Business as Usual in Guatemala

Submitted by Sanket Mohapatra on Tue, 09/15/2009 - 11:13

Santa Catalina Arch, Antigua, Guatemala. Photo © Sanket Mohapatra/World Bank

I recently made a presentation on the impact of the financial crisis and our outlook for remittances in 2009-10 at a conference on improving central bank measurement and procedures on remittances organized by CEMLA and the Banco de Guatemala on September 8-10. My colleague Jacqueline Irving presented on a global survey of central banks.The sessions and interactions with the participants made me aware that central bankers are not just interested in measuring remittances accurately, but are thinking about a range of issues that affect both remittances and migration—ranging from how exchange rate movements can create incentives to send remittances for investment motives, to intra-regional and bilateral migration flows.
 

Can migrant remittances build resilience to natural disasters?

Submitted by Sanket Mohapatra on Thu, 08/27/2009 - 17:42
   Photo © iStockphoto.com

Floods, earthquakes and hurricanes cause significant loss of life and destruction of property in many countries. The incidence of such disasters has increased in recent years. There is a growing consensus, however, that being better prepared against natural disasters can be equally or more effective than immediate aid and relief.

Several studies have shown that migrants send additional remittances after severe shocks. However, there is little evidence of whether and how they help households prepare for natural disasters (see paper for more details). In a recent paper for a forthcoming World Bank-UN assessment of the economics of disaster risk reduction, we analyze cross-country macroeconomic data as well as a number of household surveys to examine the "ex-post" response of remittances to natural disasters and their contribution to "ex-ante" preparedness. 

Turnaround in migrant employment in the US?

Submitted by Ani Silwal on Mon, 08/17/2009 - 13:44

We had suggested earlier the bottoming out of remittances to Latin America in response to stabilizing construction activity in the US. The latest employment numbers for June 2009 from the Current Population Survey (CPS) hint at a turnaround in employment levels in the US, particularly for migrants. 
 

 *3 month moving averages           Source: Current Population Survey

 

The sectoral breakdown of employment data show that employment in the construction sector is picking up faster than other major occupations. Employment in other major occupations also seems to be stabilizing. 

Dune bashing in Dubai...with a hawaladar!

Submitted by Dilip Ratha on Thu, 08/13/2009 - 15:00

Dubai is a must for any one working on migration and remittances. One of the seven Emirates, but one that depends more on trade, finance and real estate than oil and gas, Dubai is a wonder in the desert. It has a large – perhaps the largest – migrant population relative to natives (no pun intended) in the world. If you ask me which is the most developed Indian city, I would say Dubai!

   Photo © Curt Carnemark / World Bank

For sure, Dubai has some of the best Indian food. (As an aside, London used to be the city with the best Indian food. I was there a couple of weeks ago, and was a bit disappointed with the Indian (actually Bangladeshi) restaurants. Perhaps the recent visa restriction on hiring cooks from other countries is beginning to have an impact!)

With all the photos in the media of migrants leaving Dubai (abandoning cars on the airport parking lot), I was forced to visit Dubai in April, and once more after that. The level of activity seemed to me as high as the skyscrapers, although the locals reported a slowing down in the pace of construction. I visited a few embassies and remittance service providers. Dubai is slowing, but only for a while, and not all sectors are affected the same way by the crisis. For example construction workers are more affected than hotel workers. Migrants from Kerala (India) and Bangladesh are more affected than those from Nepal and the Philippines. Pakistani drivers are also affected, not the least because rising house prices in Dubai has forced many of them to send their wives and children home. It occurred to me that this could be a reason for the surge in remittance flows to such separated families in South Asia.

Money transfer companies - many of which are also exchange houses and employers of registered hawaladars - were doing brisk business. Remittances to South Asia seemed to be booming.

A highlight of the Dubai trip was a ride to the desert. Sanket and I went dune bashing with a hawaladar/money transmitter friend!