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Poverty

Internal Migration – Improving Welfare of the Rural Poor

Soonhwa Yi's picture

Salauddin, a farmer, migrated to Dhaka (the capital) from a rural area of Bangladesh because of severe drought. He is now one of half million rickshaw-pullers. He spends only tk 100 a day and saves the rest; when having saved tk3000 (usually in a three-week time), he goes home to see his wife and children. His wife says, “thanks to this money, I can now cook this meal.”
 
The World Bank’s KNOMAD (Global Knowledge Partnership on Migration and Development) held a conference on internal migration and urbanization in Dhaka on April 30 – May 1, 2014, in collaboration with the Refugee and Migratory Movements Research Unit, University of Dhaka. The conference aimed to better understand the multifaceted aspects of internal migration and found the following.

Growth, Migration and Violence in India: Impressions from a recent visit to KBK districts of Odisha

Dilip Ratha's picture
"For a moment I was bewildered. Then Nilambar muttered to the contractor that if we have legs at least, we could walk for the rest of our lives. We told the contractor he could take our hands…"
 - Odisha's vicious migration cycle, Indian Express, Sunday, Dec 22 2013, 11:00 hrs


In the middle of December 2013, Dialu Niyal (30) and Nilambar Dhangda Majhi (28) of Kalahandi, Odisha, paid an inhuman price for a breach of contract. The labor contractors had paid them (and 10 other villagers) Rs 14,000 ($225) each in advance to recruit them for work in another state. When the time came, the contractors tried to take them to a different place from the one agreed, but the villagers were not willing to go to the new place and escaped, except for these unfortunate two. The contractors detained them for a week trying to collect the debt, and in the end, became violent. 

Remittances and Financial Inclusion: Evidence from El Salvador

Maria Soledad Martinez Peria's picture

While we know a lot about the impact of remittances on growth, investment, poverty, inequality, health, and education, the potential effects of international remittances on the domestic financial system and financial inclusion have not received much attention. There are several ways in which remittances could affect financial inclusion (that is, facilitating households’ access to and use of financial services). First, remittances might increase the demand for savings instruments. The fixed costs of sending remittances make the flows lumpy, providing households with excess cash for some period of time. This might potentially increase their demands for deposit accounts, since financial institutions offer households a safe place to store this temporary excess cash. Second, remittances might increase household’s likelihood of obtaining a loan. Processing remittances flows provides financial institutions with information on the income of recipient households. This information might make financial institutions more willing and able to extend loans to otherwise opaque borrowers. On the other hand, since remittances might help relax households’ financing constraints, the demand for credit might fall as remittances increase.

How does migration shape economic and social development?

Elina Scheja's picture

Migration has a profound impact on the lives of the migrant households, but also their societies are shaped by the cumulative effects of labor mobility and consequently remittances. Literature provides interesting insights into the true development impact of migration. Dilip was asked to provide a background document assessing the state of the current knowledge for a roundtable discussion at the Civil Society Days of the Global Forum of Migration and Development 2010 held in November in Puerto Vallarta, Mexico. This resulting paper (co-authored with me and Sanket) has since then been revised and recently published as a World Bank working paper.

In the paper we have reviewed a variety of studies representing different aspects of migration in order to distill key messages and new insights. Main observations arising from the survey are:

For a sending country, migration and the resulting remittances lead to increased incomes and poverty reduction, improve health and educational outcomes, and promote productivity and access to finance. Although individual variation exists, the economic impact is primarily and substantially positive. Yet, these gains come at a substantial social cost to the migrants and their families as migration may lead to eroded family structures, children losing parental care, and weaker safety nets. 

Poverty fell in Pakistan in 2001-08 partly because of remittances - Migrants can help in reconstruction after devastating floods

Sanket Mohapatra's picture

A World Bank report released on July 30 finds that poverty in Pakistan fell by an impressive 17.3 percentage points between 2001 and 2008 (from 34.5 percent in 2001-02 to 17.2 percent in 2007-08). Three out of Pakistan’s four major provinces – Khyber Pakhtunkhwa (formerly NWFP), Punjab, and Sindh – saw significant declines in poverty during this period. The largest fall in poverty was in Khyber Pakhtunkhwa (KP). According to the Bank report “high level of remittances, both foreign and domestic, seem to have facilitated” the decline in poverty in KP.

     UN Photo/WFP/Amjad Jamal
Pakistan saw migrant remittances reach a record $ 8.9 billion in fiscal year 2010, an increase of 14 percent compared to the 2009 fiscal year despite the global economic crisis (Pakistan’s fiscal year runs from July to June). The World Bank report says “Continued strong growth in worker’s remittances in the past few years has also contributed to improvements in the external current account balance” and “have facilitated improvement in the country’s external position”. 

Crisis, employment, and migration

Dilip Ratha's picture

Last week I participated in the World Economic Forum Global Redesign Summit at Doha (see program ). In a brainstorming panel, the kind where you hit your head against the wall, I was asked the following question:

Photo © Yosef Hadar / World Bank
Following the economic crisis, how can countries boost the employment intensity of economic recovery? And how might win-win migration arrangements among developed and developing countries be stimulated through international cooperation?

Despite the leftist tone of this question, it is important to note that being pro-labor does not imply a bias against capitalists. My response to this question can be summarized as follows:

1) Let labor markets work
2) Let's make realistic policies but not lose the long-term perspective
3) Let's think on a global scale.

Moving away from home... and away from poverty?

Kathleen Beegle's picture

Finding routes out of poverty remains a key issue for households and policy makers alike. A long term vision of development in Africa and elsewhere suggests that poverty reduction is associated with intergenerational mobility out of rural areas and agriculture, and into urban non-agricultural settings. To respond to new economic opportunities, people must be geographically mobile. Constraints to their movement may in fact impede economic growth.

Africa Migration Project: Household surveys call for proposals

Sonia Plaza's picture

In collaboration with the African Development Bank, the World Bank is undertaking a comprehensive study of migration and remittances in Sub-Saharan Africa and destination countries outside Africa. The World Bank Household Survey of Migrants is part of this effort, and will be conducted in 10 countries (Burkina Faso, Ethiopia, Kenya, Lesotho, Mali, Nigeria, Senegal, South Africa, Ivory Coast, and Uganda). 

Climate change and the migration fallout

Sonia Plaza's picture

The impact of sea level rise from global warming could be catastrophic for many developing countries.  The World Bank estimates that even a one meter rise would turn at least 56 million people in the developing world into environmental refugees. 

 

Not only do countries need to start planning and implementing measures for adaptation, but the international community and some countries will need to devise an immigration strategy how to deal with populations who will be forced to resettle due to climate change.

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