Trier University Presentation. Migration, Remittances and Financial

Transcription

1 Trier University Presentation 28 th June 2010 Migration, Remittances and Financial Inclusion Howard Jones, Senior Research Fellow, Institute of Commonwealth Studies, University of London

2 Links to previous session Changing approaches to the provision i of financial services to the poor: a supply-led approach to a more demand-led approach A recognition that poor people need a range of financial services: credit, savings, insurance and money transfer The diversity of financial service providers, up- scaling and down-scaling of providers, graduation of clients A general presumption formal financial provision better, informal financial provision worse

3 Lecture Outline Migration International migration: Global and some country figures Internal migration Drivers of migration Remittances A new source of development finance: Global and some country figures Remittances and Financial Inclusion Positives and negatives of migration & remittances

4 International Migration: Some Global Figures (HDR, 2009) There are 200 million international ti migrants in the world (Human Development Report, 2009) One-third of these migrate between developing countries South to South migration. 14 million are refugees living i outside their country of citizenship For the past 50 years the percentage of international migrants to total world population has remained at around 3%

5 International Migration: Some Country Figures US: 13% of total population (Pieper, Maastricht, 2010) Japan: international migrants 1.6% of total population (Maria R. Carlos, Maastricht, 2010) Countries can be sending, receiving and transit nations: Czech Republic with migrants from Ukraine, Slovakia, Vietnam, Russia, Moldova and Mongolia Turkey with migrants from Iran, Iraq, Bulgaria, M. East India: 10 million nationals working overseas

6 The wish to migrate and desired migration destinations (Gallup, 2009) Worldwide: 16% (700 million) of adults (15yrs and above) would like to migrate permanently SSA (32%), ME and N. Africa (23%), Europe (19%), Asia (10%) Preferred destinations for adults in SSA wishing to migrate: USA (31%), UK (11%), France (7%), Inter-Regional (11%) Preferred destinations for adults in SEAsia wishing to migrate: USA (36%), Japan (7%), Australia (6%), UK (5%), Canada (5%) Migration is about opportunity

7 Internal Migrants (IMs): some Global and Country figures IMs estimated to be nearly 4 times (740 million) the number of international migrants (HDR, 09) China is the only country that t regulates (Hukouk system) internal migration (Bodvarsson, Maastricht, 2010) An estimated 140 million rural workers in China moved to cities by the end of 2008; of these, over 50 million are women (Zhang, Maastricht, 2010) 0) India: estimated to be 100 million circular migrants contributing 10% of GDP (Deshingkar and Akter, 2009). In migration/remittance studies internal migration has been rather marginalised by the focus on international migration and remittances, & is also poorly recorded

8 Drivers of Migration Migration is multi-causal and complex, Main Drivers: Political: poor governance, persecution Economic: employment opportunities, incomes Social: education, social networks, diaspora links Environmental: floods, land productivity Demographic*: population size and density Personal characteristics: age, gender, education (Black, 2010) A distinction often made between supply-push (desperation moves the hunting and gathering of subsistence bit work ) and ddemand-pull d (planned) migration

9 Drivers of Migration in Africa: (Adepoju, Maastricht, 2010) Population growth Urbanisation Unstable politics/governance Ethnic/religious conflicts Poverty Youth unemployment//student mobility (1 million overseas students in 1985/2.7 million students in 2004, 25,000 Nigerian students in UK in 2007) Disadvantageous positions in the global economy Negative effects OECD agricultural subsidies

10 Migration and Remittances Remittances provide the most tangible link between migration and development Dilip Ratha, World Bank blog, 02/01/2010

11 Remittances: (Migration and Development Brief 11, World Bank, 2009) Officially i recorded d remittance flows to developing countries reached $338 billion in 2008, higher than previous estimate of $328 bn India ($52 billion), China ($49 billion) and Mexico ($26 billion) are the top 3 recipients Nigeria ($10 billion) 5 th top recipient after Philippines ($19 billion), and Poland ($11billion) Top recipients as a % of GDP: Tajikistan (50%), Tonga (38%), Moldova (31%), KyrgyzRep (28%), Lesotho (27%), Samoa (26%), Lebanon (25%), Guyana (24%), Nepal (22%)

12 Migrant Remittances in the recent financial crisis (source as above) Remittance flows for 2009 estimated to decrease by 6.1% to $317 billion though this is a smaller decline compared to previous projections While new migration flows have fallen, existing migrants are not returning, but cutting back on expenditures. Remittance flows to S. Asia grew strongly 2008, but risk of lagged response to a weak global economy (also a risk for East Asia and SSA Flows to Latin America and the Caribbean, and the ME and N. Africa weaker than expected in 2009, but expectation of recovery in 2010/11 SSA: receives just 6% of Remittances going to developing countries, but 231% growth over 2003/2008 (Balde, Maastricht, 2010)

13 Benefits of Remittances/Migration at the macro-level Remittances from migrants now regarded d as the new bottom-up development finance; more than 3 times the value of Overseas Development Assistence Apart from scale, remittances have intrinsic qualities e.g. they are private transfers with direct one-to-one transmission, i without t officials i taking a slice, also tend to rise in times of crisis Estimates (Toxopeus and Lensink, 2008) show that about 10% of remittances are saved and invested and used for entrepreneurial activities Promote growth and financial development Benefits/impacts are long-term

14 Benefits of Remittances/Migration at the macro-level continued. ID21 report (2006) estimates t a 10% increase in international remittances from each migrant will lead to a 3.5% decrease in the share of people p living in poverty Largest effects of remittances on growth and poverty reduction in countries close to major labour receiving areas, e.g. those close to the US and Europe Impact on growth greater for countries with less developed financial systems IMF study: remittances act as a substitute for the domestic financial system For the host country whole sectors of the economy may depend on migrant labour

15 Benefits of Remittance/Migration continued. 2/3 receivers are women see ID for notes on gender issues regarding g remittances, financial inclusion Better food, housing, access to health and education New skills, new networks, change in life views, agents of change (e.g. business skills), multiplier effects Important for financial services/financial inclusion Regular receipt of remittances can reduce information o problems for financial institutions, help build up financial history. Higher income groups more attractive to banks The World Bank argues remittances channelled through banks may encourage savings and enable a better match between savings and investment in an economy

16 Possible negatives effects of Migration Poor migrants can be at the mercy of unscrupulous employers; long unsociable hours, discrimination, very bad working conditions Health shocks and stresses, physical insecurity Individual families split and nomadic Migrants may face hostility and very real danger from local populations resentful of competition for jobs, housing, education not just in Northern countries With economic downturns in host countries migrants may be stranded without the means to return home e.g. last year a newspaper reported that 1,500 Polish migrants were sleeping rough on the streets of the UK

17 Possible negatives effects of Migration continued Source areas/countries depleted d of skilled labour: brain drain/brain waste. Adepoju argues Africa has suffered the worse from this. Growing inequalities between migrants and those left behind Increased frustration of those who want to migrate but unable to do so Wives/partners may face increasing and more complex work burdens at home Seasonal education

18 Costs of Money Transfer Vary widely Argued transparency will bring down costs. 16 % price reductions for 6 countries on DFID web-site Sending Money Home. A one-third reduction in price for India. Remittance Country Partnerships with Bangladesh, Ghana, Nigeria i and Bangladesh In Latin America pre %, now around 5% These days much more competition The average cost is 4.5% of money sent but not for South to South South to south remittance costs high Also focus on internal remittance corridors (e.g. India)

19 Broader Policy Implications HDR (2009): e.g. expanding schemes for seasonal/low-skilled work, ensuring migrant rights (but see work of Martin Ruhs), ensuring access to education and training, ensuring access to basic service provision every rich country should consider its immigration policy to be part of its international development policy, and vice versa. Clemens, 2010

20 References Agunias, D. R. (2006) Remittances and Development. Trends, Impacts and Policy Options, Migration Policy Institute, Washington, D.C. Clemens, M. (2010) A Labour Mobility Agenda for Development, Center for Global Development ( Working Paper 201 De Haan, A. & S. Yaqub (2009) Migration and Poverty, UN Research Institute for Social Development De Hass, H (2008) Migration and Development. A theoretical perspective. Working Paper No. 9, International Migration Institute, University it of Oxford. Deshingkar, P. & S. Akter (2009) Migration and Human Development in India,

21 References Gravois, J. (2010) Bringing i it all back home, The National, UAE Human Development Research Paper 2009/13, UNDP Human Development Report (2009) Overcoming Barriers: Human Mobility and Development, UNDP ID21 insights (January 06) Sending Money Home. Can Remittances Reduce Poverty? Jones, J.H.M. (2008) Livelihood diversification and moneylending in a Rajasthan village: what lessons for rural financial services?, The European Journal of Development Research, Vol. 20, No. 3, pp

22 References Migration; A World in Motion Conference (2010) Maastricht University many ypapers p available on line Migration and Development Brief 11, Migration and Remittances Team, The World Bank, November Ratha, D. ( ), ) A conversation on migration and development, World Bank blog Toxopeus, H.S. & F. Lensink (2008) Remittances and Financial i Inclusion in Development for details of potential net migration index (web-site for the International Migration Institute, Oxford