Sixty-five million people worldwide are displaced by conflict and war.
Developing countries host 95% of them.
Displaced people need help. But so do their host communities, which face enormous sudden pressures on their infrastructure, public services and markets. These pressures have the potential to undermine political stability.
This is why international development institutions are rethinking how to approach humanitarian crises, and no longer consider humanitarian assistance and development interventions as two separate, sequential responses. We, at the World Bank, have been ramping up our support to both people and communities affected by fragility, conflict and violence as well as disaster risk, which can exacerbate instability.
Being able to provide quality financial services before, during and after periods of humanitarian crises can improve people’s resilience and help sustain livelihoods.
Migration and Remittances
4 unprecedented disruptions to the global financial system
Climate change, migration, correspondent banking and cybercrime are putting unprecedented and unforeseen pressures on global financial markets.
They aren’t just disrupting the global financial system, but also affect how we approach international development work.
Let’s examine each trend:
- “Greening the financial sector” is the new buzz term to finance a transition toward a climate-resilient economy and to help combat climate change. This topic is now getting a lot of attention from the G20 to the Financial Stability Board. The international community is trying to understand what this transition will imply: , and how efficiently the financial sector can allocate financial resources. What we know is that currently fossil fuel subsidies and a lack of carbon tax are hindering the market from shifting financial resources from brown to green.
- Globally, an estimated 65 million people are forcibly displaced. Migration, resettlement or displacement, of course, impact where and how to channel aid to those in need. But more importantly, as displaced people settle down -- no matter how temporary or long-term -- to become self-sufficient and thrive, they will need to establish new financial relations. This can be for simple transactions such as receiving aid through payment cards (as opposed to cash) or for sending remittances. Or it can be for something more complex as getting a loan to start a business.
- At the same time, as the global banking industry is tightening regulations, large banks are withdrawing from correspondent banking and shutting down commercially unsustainable business lines. This recent phenomenon can have a huge impact in some regions on SMEs and on money transfer operators, which largely handle remittances.
- . The focus on cybersecurity risk has increased along with the proliferation of internet and information technology. Fintech is transforming the financial industry -- by extending access to financial services to people and small- and medium-sized enterprises (SMEs) previously left out of the formal financial system – but is also raising many questions, including concerns about cybersecurity. The same technology advancements that are propelling fintech are also addressing cybersecurity risk. However, there is a need to develop an appropriate regulatory framework in combination with industry best practices. This framework is evolving and regulators are grappling with how and when to regulate.
Two recently released World Bank reports — one on commodities and the other on remittances — lend insight into an unfolding dynamic in the world today. As oil prices dropped from more than $100 per barrel in June 2014 to as low as $27 in the last few months, the money sent home from people working abroad in oil-producing countries also fell. This drop is a major reason remittances to developing countries declined in 2015 to their lowest growth rate since the 2008-2009 financial crisis.
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.
The World Bank is working toward two incredibly ambitious goals: ending extreme poverty by 2030 and ensuring shared prosperity for the bottom 40% of the population in each developing country. To achieve these goals will take not only the World Bank Group, the United Nations and all the national and multilateral development agencies, it will take all of us.
Want to learn more about urban migration and social inclusion? Watch live discussion on March 11 at 12:30pm EST.
Doug’s vivid account took me back to my hometown, Jaipur, Rajasthan, India: a city better known as a romantic tourist destination than as an “arrival city”. But there it is. A city that by most accounts, is very livable (perhaps that’s why angst against the city is low and it isn’t written about quite as much), and is host to thousands of migrants of all ilk.
Of the many that have over years begun to call Jaipur home, are families from Cooch Behar district in West Bengal. The bottom line is that women from Cooch Behar are overwhelmingly domestic workers in Jaipur homes. Why? For two reasons. First, Jaipur suddenly grew from being a mid-sized city in the 1990s to a thriving metropolis, up there among top ten Indian cities, by 2011, with a huge demand for domestic labor.
Second, taboos and norms (which would have to be a whole other discussion) make local Rajasthani women reluctant to work in the homes of others. Strangely, it’s fine to work in others’ fields or on construction sites, but not in others’ homes. So, it is difficult for the rich and the growing middle class to find local women to work in their homes. I forgot to say that domestic workers are overwhelmingly women, in case anyone was wondering.
Why Cooch Behar: a district way out at the other end of the country? That’s a story of social networks that establish migration patterns. Jaipur was a princely state and the Maharaja married the princess of Cooch Behar – the famed Gayatri Devi, in whose entourage came the first set of ladies-in-waiting. Over time, this migration route solidified and fulfilled Jaipur’s demand for female domestic workers. Some micro studies show that almost half of all female domestic workers in Jaipur come from Cooch Behar.
We were ready to probe the effect of male out-migration from rural areas in Guatemala on women’s role in farming. But when we approached surveyors, experts, policymakers, and municipal officials, they were, quite simply, puzzled.
All eyes turned to Russia recently, when on 16 December the ruble plunged by more than 11 percent, despite the Central Bank of Russia’s last-minute interest rate hike of 6.5 percentage points to 17 percent. When it looked like Russia’s turmoil might spread to global markets, western economies sat up and paid close attention.
What may have gone unnoticed, however, is the ongoing impact on our client countries in the Europe and Central Asia region.
Roughly 27 million young people leave their country of birth to find employment abroad. Does this trend suggest that migration may be a solution to the worrying situation whereby 60% of young people in developing regions that are either unemployed, not studying, or engaged in irregular employment?