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Migration and Remittances

Trends in Remittances, 2016: A New Normal of Slow Growth

Dilip Ratha's picture
Against a backdrop of tepid global growth, remittance flows to low and middle income countries (LMICs) seem to have entered a “new normal” of slow growth. In 2016, remittance flows to LMICs are projected to reach $442 billion, marking an increase of 0.8 percent over 2015 (figure 1 and table 1). The modest recovery in 2016 is largely driven by the increase in remittance flows to Latin America and the Caribbean on the back of a stronger economy in the United States; by contrast remittance flows to all other developing regions either declined or recorded a deceleration in growth.  

How many years do refugees stay in exile?

Xavier Devictor's picture
"The average length of time that refugees spend in camps is 17 years." This cruel statistic has been quoted many times, influencing our perception of refugee crises as never-ending events which are spinning out of control. It has significant implications when deciding the type of aid that is needed, the combination of humanitarian and development support, and the possible responses to the crisis.

But is it true? Not so.

In fact, the "17 year" statistic comes from a 2004 internal UNHCR report, and it was accompanied by many caveats which have been lost along the way. The statistic does not refer to camps, since the overwhelming majority of refugees live outside camps. It is limited to situations of five years or more, so it is an average duration of the longest situations, not of all situations. Most importantly, it refers to the duration of situations, not to the time people have stayed in exile.

Take the situation of Somali refugees in Kenya. Refugees started to arrive massively around 1993, about 23 years ago. Their number now stands at 418,000. But can we say that all 418,000 have been in exile for 23 years?

In fact, forced displacement situations are inherently dynamic. As we see in Figure 1, numbers vary every year: they reflect political and military developments in the country of origin. In fact, a large part of the current total could not have arrived before 2008, i.e. about 6 or 7 years ago.

Figure 1 Number of Somali refugees in Kenya (UNHCR data)

Along these lines, and using data published by UNHCR as of end-2015, we re-calculated the earliest date at which various cohorts of refugees could have arrived in each situation (see working paper). We then aggregated all situations into a single "global refugee population" and calculated global averages and median durations.

So what are the results?

When we look at the "global refugee population" (See Figure 2), we can now distinguish several distinct episodes of displacement.

Figure 2 Number of refugees by year of exile

There is a large cohort of about 8.9 million "recent refugees," who arrived over the last four years. This includes about 4.8 million Syrians, as well as people fleeing from South Sudan (0.7 million), Afghanistan (0.3 million), Ukraine (0.3 million), the Central African Republic (0.3 million), and Pakistan (0.2 million).

Another large cohort, of about 2.2 million, has spent between 5 and 9 years in exile. It includes refugees from Afghanistan (0.5 million), the bulk of the current Somali refugees (0.4 million), and people fleeing from Colombia (0.3 million) and Myanmar (0.2 million).

About 2 million people have been in exile between 10 and 34 years. This includes years during which numbers are relatively low, and two episodes where they are higher, around 14 years ago, with the arrival of about 0.2 million Sudanese refugees, and around 24 and 25 years ago, with the arrival of about 0.1 million Somalis and 0.1 million Eritreans.

Lastly, a large group of refugees has been in exile for 35 to 37 years: these 2.2 million refugees include mainly Afghans, but also about 0.3 million ethnic Chinese who fled into China during the 1979 war with Vietnam. Finally, there are few very protracted situations, up to 55 years, including mainly Western Sahara.

We can now turn to average durations. As of end-2015, the median duration of exile stands at 4 years, i.e. half of the refugees worldwide have spent 4 years or less in exile. The median has fluctuated widely since the end of the Cold War, in 1991, between 4 and 14 years, and it is now at a historical low. By contrast, the mean duration stands at 10.3 years, and has been relatively stable since the late 1990s, between 10 and 15 years.

But this leads to another important finding: trends can be counter-intuitive. In fact, a decline in the average duration of exile is typically not an improvement, but rather the consequence of a degradation of the global situation. The averages increase in years when there are relatively few new refugees, and they drop when large numbers of people flow in, for example in 1993-1994 (with conflicts in Former Yugoslavia and Rwanda), in 1997-1999 (with conflicts in DRC and other parts of Africa), after 2003 (with conflict in Iraq, Somalia, and Sudan), and since 2013 (with the conflict in the Syrian Arab Republic).

We also looked at the number of people who have spent more than five years in exile. As of end-2015, this number stands at 6.6 million, and it has been remarkably stable since 1991, at 5 to 7 million throughout most of the period.  For this group, however, the average duration of exile increases over time – largely because of the unresolved situation of Afghan refugees which pushes averages up. It is now well over 20 years.

This short analysis of UNHCR data shows that available refugee data can be used to clarify some important parts of the policy debate. It is important to ensure that this debate is informed by evidence, which can help provide a more nuanced perspective of a complex issue.

Is South Asia ready for a Regional Motor Vehicles Agreement?

Sanjay Kathuria's picture
Trucks loading goods
Trucks waiting to unload their goods in Bangladesh. Photo By Erik Nora/World Bank

Judging by the number of views of the recent Facebook livestream event on intra-regional trade and investment in South Asia, there is significant interest in this topic. And there should be, given that there remain many important and untapped opportunities to use the power of trade and investment to enhance economic opportunities, including for lesser-skilled people and women in the region.

According to respondents of the Facebook poll conducted during the above event in May 2016, the most important policy to enhance intra-regional trade would be to invest in connectivity and border crossings.  Policy makers seem to realize this as well. Over the last two years, new efforts to deepen South Asian cooperation in trade have focused almost exclusively on trade facilitation issues. Let me elaborate.

Harnessing Stitches for Riches in South Asia

Gladys Lopez-Acevedo's picture
Stitches to Riches? The Potential of Apparel Manufacturing in South Asia

In the coming years and decades, China is expected to slowly relinquish its lead position in the global apparel market, opening the door to other competitors. This is a huge opportunity for South Asia to create at least 1.5 million jobs that are “good for development” – of which half a million would be for women – according to a new World Bank report Stitches to Riches?  But those numbers could be much higher if the region moves quickly to tackle existing impediments and foster growth in apparel, which will also yield dividends for other light manufacturers (like footwear and toys).
How South Asia fits in the global apparel market
Currently, China holds by far the largest share of global apparel trade – at 41 percent, up from 25 percent in 2000, with about 10 million workers. But as China continues to develop, it is likely to move up the global value chain into higher-value goods (like electronics, and out of apparel) or switch production among sectors in response to rising wages. A 2013 survey of leading global buyers in the United States and European Union (EU) found that 72 percent of respondents planned to decrease their share of sourcing from China over the next five years (2012-2016).
Already, the top four apparel producers in South Asia – Bangladesh, India, Pakistan, and Sri Lanka – have made big investments in world apparel trade, now accounting for 12 percent of global apparel exports (see figure). In terms of apparel export value, Bangladesh leads the pack (at $22.8 billion), followed by India ($12.5 billion), Sri Lanka ($4.4 billion), and Pakistan ($4.2 billion).
China dominates global apparel trade
(Country share of global apparel exports)

Source: Stitches to Riches?
Why apparel jobs are “good for development”
When we think of jobs that are “good for development,” the main yardstick is whether they will help translate growth into long-lasting poverty reduction and broad-based economic opportunities. Apparel fits the bill for numerous reasons. 

Immigrant labor: Can it help Malaysia’s economic development?

Rafael Munoz Moreno's picture

Malaysia has been able to reach remarkable achievements over the past decades, including extreme poverty eradication and promotion of inclusive growth. It aims to reach a high-income nation status by 2020, which goes beyond merely reaching a per capita GDP threshold. As the 11th Malaysia Plan points out, the goal is to achieve a growth path that is sustainable over time, reflects greater productivity, and is inclusive. High-income status can be achieved if we ensure that future generations have access to all the resources, such as education and productive opportunities, necessary to realize their ambitions and if Malaysia’s economy is globally competitive and resource-sustainable.

Over the years, immigrants have played a crucial role in the economic development of Malaysia, with around 2.1 million immigrants registered and over 1 million undocumented as of 2013. Education levels among the Malaysian population have increased remarkably over the last two decades, and immigrant workers have become one of the primary sources of labor for low-skilled occupations, most commonly in labor-intensive sectors such as construction, agriculture and manufacturing. Economic studies show that a 10% net increase in low-skilled foreign workers could raise Malaysia’s GDP by 1.1% and create employment and increase wages for most Malaysians.

Oil price impact is felt beyond borders

Donna Barne's picture

Oil pumps in southern Russia © Gennadiy Kolodkin/World Bank

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.

Measuring the economic potential of Indian districts

Mark Roberts's picture
Kanpur, which is one of the largest cities in the densely populated state of Uttar Pradesh, where per capita income is less than one-fifth its level in Delhi and the poverty rate is three times as high. How does its economic potential compare? Read below. Photo by: Sudip Mozumder/World Bank

As anyone who has travelled around the country will testify, India is marked by glaring spatial disparities in well-being. On the one hand, New Delhi is relatively prosperous, and if you visit the recently renovated Connaught Place, you will find not only a bustling outdoor market, but also designer shops, upmarket restaurants and a gleaming new metro station.

However, take the Prayagraj Express train east for seven hours and you will find yourself in Kanpur, which is one of the largest cities in the densely populated state of Uttar Pradesh, where per capita income is less than one-fifth its level in Delhi and the poverty rate is three times as high. 

Such large variations in well-being are a natural cause for concern among India’s policymakers and have generated intense interest in India’s spatial landscape of potential for economic development. Is it the case that less prosperous parts of the country lack the basic ingredients that can give rise to the high productivity that economists believe provides the key to well-being or is it the case that, while they may possess some of these ingredients, they are failing to make the most of them?

The Economic Potential Index

In an effort to provide some insights into both this and other key questions related to India’s spatial development, we have recently published a working paper that examines underlying variations in “economic potential” across Indian districts. 

Our analysis is based on a composite “Economic Potential Index” ( EPI)  that measures, in a single summary score, the extent to which a district possesses attributes that can be considered “universally” important to achieving a high local level of productivity, whether or not a high productivity level is currently actually observed. 

Time for South Asia to deal with fiscal weaknesses

Annette Dixon's picture
South Asia Economic Focus Spring 2016 Fading Tailwinds cover

There’s a lot of good news in the World Bank’s latest economic report on South Asia: the region is the fastest growing in the world and its limited exposure to global economic turbulence means that its near-term prospects look good. 

Get more farmers off their farms

David McKenzie's picture
Justin Wolfers had a nice piece in the Upshot about new work on how growing up in a bad neighborhood has long-term negative consequences for kids. The key point of the new work is that the benefits of moving from bad neighborhoods may be particularly high for kids whose parents won’t voluntarily move, but only move because their public housing is demolished.