outlook for migration and remittances 2012-152012-15 dilip ratha world bank november 27, 2012...
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Outlook for migration and remittances 2012-15
Dilip RathaWorld Bank
November 27, 2012Development Prospects Group (DECPG) BBLWashington, D.C.
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Outline Cyclical trends for 2012-15
Long-term structural trends
Global knowledge partnership - KNOMAD
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Main messages Remittances to developing countries $406 bn in
2012 ; $534 bn by 2015
Remittance costs averaging 7.5% in top 20 remittance corridors; 9% worldwide; US Remittance Transfer Rule will increase transparency for consumers
Migration flows more responsive to economic cycle in host countries
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0
100
200
300
400
500
600$ billions
Remittances to developing countries to reach $406 bn in 2012
Source: Development Prospects Group, World Bank
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70 66
24 24 21 18 14 149 7
Top remittance recipients in 2012
$ million, 2012e as % of GDP, 2011
47
31 29 2723 22 21 21
18 18
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Remittance flows to developing countries
$ billion 2010 2011 2012e 2013f 2014f 2015f
Developing countries 341 381 406 438 482 534East Asia and Pacific 95 106 114 123 136 152Europe and Central Asia 37 41 41 45 51 58Latin America and Caribbean 58 62 64 68 75 84Middle-East and North Africa 41 43 47 50 53 56South Asia 82 97 109 118 130 144Sub-Saharan Africa 29 31 31 33 36 39
Growth rateDeveloping countries 8.0% 11.7% 6.5% 7.9% 10.1% 10.7%
East Asia and Pacific 10.9% 12.3% 7.2% 8.2% 10.5% 11.3%Europe and Central Asia 0.0% 13.1% -0.9% 9.6% 14.8% 13.1%
Latin America and Caribbean 0.9% 7.3% 2.9% 7.6% 10.3% 11.0%Middle-East and North Africa 20.8% 6.3% 8.4% 5.5% 6.2% 6.8%
South Asia 9.5% 17.7% 12.5% 8.7% 9.9% 11.0%Sub-Saharan Africa 4.9% 6.8% 0.0% 6.2% 8.7% 9.2%
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-20%
0%
20%
40%
Europe and Central Asia
Percent
Source: Development Prospect Group, the World Bank
Europe and Central Asia: Remittance Trends (y-o-y growth rate, %)
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Remittance outflows from Western Europe has decelerated
-40%-30%-20%-10%
0%10%20%30%40%
UK
Italy
Spain
-70%-60%-50%-40%-30%-20%-10%
0%10%20%
Poland
Bosnia & Herz.
Romania
Growth in remittance outflows from Western European countries has been weak
Growth in remittance inflows to Eastern European countries has also been weak
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-20%
0%
20%
40%
Latin America and Caribbean
Percent
Source: Development Prospect Group, the World Bank
Latin America and Caribbean: Remittance Trends (y-o-y growth rate, %)
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-25
-15
-5
5
15
25
MexicoEl SalvadorHondurasGuatemalaDominican Rep.NicaraguaJamaica
y-o-y growth rate of 3-month m.a. %
Latin America and Caribbean: Remittance Trends (y-o-y growth rate, %)
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In the US, employment is recovering faster for migrant workers than for natives*
Source: Current Population Survey
*3-month moving averages
21
22
23
24
116
118
120
122
124
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12
millions millions
Natives (left scale)
Migrants (right scale)
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However, unskilled migrants have been affected more than skilled and naturalized foreign-born workers in the US
-20%
0%
20%
40%
Construction Accomodation/food services
Trade Professional/tech. services
Total
Native-born Foreign born, non-citizens Foreign born, naturalized
Change in monthly average employment levels between Jan-Sep 2009 and Jan-Sep 2012
Source: US Current Population Survey
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Migrant employment is more responsive to economic cycle than that of natives
4.2
1.71.0 1.4
1.0
-2.1 -1.9
-3.3
-6.3
-14.3
2.3
0.6 0.40.8
1.6
-1.1-0.7
-1.2
-5.4
-11.1
-15
-10
-5
0
5
Migrants Natives
Percentage points
Germany
Australia USA Belgium Canada
UK France Italy Spain Greece
Source: OECD International Migration Outlook 2012
Change in employment (Q1-2009 to Q4-2011)
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-20%
0%
20%
40%
Sub-Saharan Africa
Percent
Source: Development Prospect Group, the World Bank
Sub-Saharan Africa: Remittance Trends (y-o-y growth rate, %)
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-20%
0%
20%
40%
Middle-East and North Africa
Percent
Source: Development Prospect Group, the World Bank
Middle-East and North America: Remittance Trends (y-o-y growth rate, %)
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Remittance growth declines in 2012 in most region
-20%
0%
20%
40%East Asia and PacificEurope and Central AsiaLatin America and CaribbeanMiddle-East and North AfricaSouth AsiaSub-Saharan Africa
Percent
Source: Development Prospect Group, the World Bank
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Russia: Oil prices continue to provide a cushion for remittances to Asia
0
20
40
60
80
100
120
140
0.0
2.0
4.0
6.0
8.0
$ billions
Remittance outflows from Russia (left scale)
Crude oil price(right scale)
$/barrel
Source: IMF Balance of Payments and Development Prospects Group, World Bank.
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Exchange rate depreciation has created additional incentives to send remittances
90.00
95.00
100.00
105.00
110.00
115.00
120.00
Mexican Peso
Bangladeshi Taka
Local currency/US$ (July 2010 = 100 )
Indian Rupee
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Remittance costs remain persistently high
0%
2%
4%
6%
8%
10%
2008 Q1 2009
Q3 2009
Q1 2010
Q3 2010
Q1 2011
Q3 2011
Q1 2012
Q3 2012
Simple Average
Weighted average
Cost of sending $200 in top 20 largest bilateral remittance corridors
Source: World Bank Remittance Prices Worldwide database (November 2012)
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Remittance costs remain persistently high
2%
4% 5% 5% 5% 5%6%
7%8% 8%
9%
12%13%
14%
17%
Cost of sending $200 from selected remittance source countries, Q3-2012
Source: World Bank Remittance Prices Worldwide database (November 2012)
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US Remittance Rule likely to increase transparency and competition
The US Remittance rule may increase remittance cost in the short-run
Improves transparency, and may spur competition in the industry
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Mobile remittances promises to reduce costs, but growth is stymied by unclear regulation Lack of clarity and mandate of regulation appears to
be a constraint to growth
AML/CFT and the “know-your-client” requirements raise regulatory burden and costs
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International Remittances
Agenda
1. Monitoring, analysis, projection- Size, corridors, channels- Counter-cyclicality - Effects on poverty, education, health,
investmen- Policy (costs, competition, exchange
controls)
2. Retail payment systems- Payment platforms/instruments- Regulation (clearing and settlement, capital
adequacy, exchange controls, disclosure, cross-border arbitration)
- Anti-money laundering/Countering financing of terrorism (AML/CFT)
3. Financial access- Deposit and saving products- Loan products (mortgages,
consumer loans, microfinance)
- Credit history for MFI clients- Insurance products
4. Capital market access- Private banks and
corporations (securitization)
- Governments (diaspora bonds)
- Sovereign credit rating
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International Remittances
Agenda
1. Monitoring, analysis, projection
- IMF BPM6
2. Retail payment systems
- Costs- AML/CFT
3. Financial access 4. Capital market access
- Governments (diasporabonds)
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Global Knowledge Partnership on
Migration and Development(KNOMAD)
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Objectives
• An open, multidisciplinary platform
• Generate a menu of policy choices based on evidence and peer-review
• Pilot policy operations and capacity building efforts
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MIGRATION ANDDEVELOPMENT
Data on migration and
remittance flows
Skilled labor
migration
Unskilled labor
migration
Integration issues in host communities
Policy and institutional coherence
Migrant rights and
social aspects
Demographic changes
and migration
Remittances
Mobilizing other diaspora
resources
Climate change
and migration
Rural-urban migration
and urbanization
Migration and
security
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Outputs of Migration Knowledge Platform
• Analytical research products• Operational toolkits, fact books• Web-based anthologies, archives, blogs• Best practices: A menu of policy choices for
the policy makers• Few pilot projects and capacity building
activities
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International Logo Competition
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KNOMAD Activities
• Global Experts Meetings: • Geneva Dec 3-4, 2012• Washington Dec 10-11, 2012
• Workshop on BPM 6 compilation of remittance data
• Migration and Remittances Factbook 2013