Outlook for migration and remittances

2012-14
Dilip Ratha
World Bank

Tenth Coordination Meeting on International Migration

New York
February 9, 2012

After a modest decline in 2009, remittances

have grown steadily, to reach $351 bn. in 2011
$ billions
600
500
400
300
200
100

19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
f
20
14
f

Source: Migration and Development Brief 17

Resilience of remittances across all regions

40%

Percent

20%

0%

East Asia and

Pacific
Europe and Central
Asia*
Latin America and
Caribbean
Middle-East and
North Africa
South Asia

20
08
20
09
20
10
20
11
e
20
12
f
20
13
f

-20%

Source: Migration and Development Brief 17

Sub-Saharan Africa

Remittance flows to developing countries

$ billion

Developing countries
East Asia and Pacific
Europe and Central Asia
Latin America and Caribbean
Middle-East and North Africa
South Asia
Sub-Saharan Africa

2010

2011e

2012f

2013f

2014f

325

351

377

406

441

94
36
57

101
40
61

109
44
66

117
48
71

127
53
77

35
82
21

36
90
23

37
97
24

39
105
26

42
114
28

Growth rate (%)

Developing countries

6.0%

8.0% 7.3%

7.9%

8.4%

East Asia and Pacific

10.2%
-0.1%
1.2%
3.3%
9.5%
4.5%

7.6%
11.0%
7.0%
2.6%
10.1%
7.4%

8.0%
10.1%
7.9%
5.3%
7.9%
6.8%

8.7%
11.4%
8.1%
5.5%
8.4%
7.3%

Europe and Central Asia

Latin America and Caribbean
Middle-East and North Africa
South Asia
Sub-Saharan Africa

7.3%
8.8%
7.6%
5.0%
7.4%
6.3%

Outlook for remittances

Remittances to developing countries $351 bn. In
2011 (8% increase over 2010)

Growth in all six developing regions in 2011 after

global financial crisis (MENA, LAC slower growth)

Forecasts: 7-8 percent growth in 2012-14

Economic crisis in Europe, high unemployment rates
and restrictive immigration policies are affecting
migration and remittances

Gulf countries and oil exporters (Russia) are

providing a cushion for remittances to Asia

30

20

10

12 12 11
9
8

jik
is
Le tan
so
th
Sa o
M mo
K ol d a
yr
gy ov a
z
R
e
N p.
ep
To al
Le ng
ba a
n
K on
El o s
Sa o v
lv o
ad
or

60

Ta

In
di
Ch a
i
M na
Ph e x
i li ic o
pp
P a in e
B a k is s
n g ta
la n
de
N i sh
ge
V i r ia
et
na
m
Eg
Le yp
ba t
no
n

Top remittance recipients in 2011

($millions), 2011e
As % of GDP, 2010

58 57
31

50

40

24 23
29
25 23
21 20 20 20
17 16

Oil prices continue to provide a cushion for

remittances to Asia
$ billions

$/barrel
140

120
6

100

Crude oil price

(right scale)

80

60
40

Remittance outflows from

Russia (left scale)

20

11
20

20

09
20

10

3
08
20

20

07

3
Q
20

05
20

06

3
Q
04
20

Source: IMF Balance of Payments and Development Prospects Group, World Bank.

Exchange rate depreciation has created additional

incentives to send remittances
Local currency/US$
(July 2010 = 100 )
110

Bangladeshi Rupee

Indian Rupee
Mexican Peso

105

Indian Rupee

100

Mexican Peso
95

Bangladesh Rupee
-1
1
ov
N

Se
p11

Ju
l-1
1

1
-1
ay
M

-1
1
ar
M

Ja
n11

ov
-1
0
N

Se
p10

Ju
l-1
0

90

Risks to the outlook

Global economic crisis in the US and Europe
Anti-immigration policies in other destination
countries

Uncertain currency and oil price movements

First mile issues in remittance-source

countries
Onerous AML/CFT regulations
Exclusivity agreements between MTOs and post
offices

Migrants do not have adequate access to banks

EU Payment Services Directive (PSD) and efforts in
US to improve transparency in pricing of remittance
services

Cost of sending remittances to developing

regions is high
Average cost of sending $200 to developing regions

$24.8
$19.6
$17.4

$16.3

$15.4

A
si
a

S
ou
th

LA
C

M
N
A

E
C
A
*

E
A
P

S
SA

$12.3

ECA excludes Russian Federation; Source: World Bank Remittances Prices Worldwide database (Sept.2011)

Remittance costs are falling

Percent
10.0
Simple average

9.0

8.0
Weighted average

7.0
2008

Q1
Q3
Q1
Q3
Q1
Q3
2009 2009 2010 2010 2011 2011
Data on market size a key driver of market competition

South-South remittance costs are higher than

North-South remittance costs
Average cost of sending $200 within Africa (US$)
Burkina Faso - Ghana

$32

Ghana-Nigeria*

$32

Nigeria - Ghana

$25

Nigeria - Benin

$21

Kenya - Uganda*

$19

Burkina Faso - Cote d'Ivoire

$18

Senegal - M ali

$18

Uganda - Kenya

$17

Kenya - Tanzania
Uganda - Rwanda
Uganda - Tanzania

$17
$13
$12

Excludes FX commissions and bank account maintenance fees for inter-bank transfers
*Remittance prices worldwide database (Sep 2011)
Source: Surveys of remittance service providers;

1. Monitoring, analysis, projection

- Size, corridors, channels
- Counter-cyclicality
- Effects on poverty, education, health,
investmen
- Policy (costs, competition, exchange
controls)

3. Financial access
- Deposit and saving products
- Loan products (mortgages,
consumer loans,
microfinance)
- Credit history for MFI clients
- Insurance products

International
Remittances
Agenda

4. Capital market access

- Private banks and
corporations
(securitization)
- Governments (diaspora
bonds)
- Sovereign credit rating

2. Retail payment systems

- Payment platforms/instruments
- Regulation (clearing and settlement, capital
adequacy, exchange controls, disclosure, crossborder arbitration)
- Anti-money laundering/Countering financing of
terrorism (AML/CFT)

HLD 2013 Actions to consider in the area

of remittances
Improvement of data on remittances, especially
corridor-specific market size

Leveraging remittances for capital market access

and creditworthiness: How to support countries?

Mobilizing diaspora investments via diaspora bonds

The wealth of the diaspora can be mobilized

through diaspora bonds
Diaspora size
(millions)
Developing countries

Estimated savings
($ billions, 2009)

161.5

397.5

East Asia & Pacific

21.7

83.9

Europe & Central Asia

43.0

72.9

Latin America & Caribbean

30.2

116.0

Middle East & North Africa

18.0

41.2

Sub-Saharan Africa

21.8

30.4

South Asia

26.7

53.2

The World Bank has set up a Task Force on Diaspora Bonds

Source: Ratha and Mohapatra 2011.

Data and other resources are available at

www.worldbank.org/migration

Global Knowledge Partnership on

Migration and Development

Objectives
An open, multidisciplinary platform
Generate a menu of policy choices based on
evidence and peer-review

Pilot policy operations and capacity building efforts

Thematic areas

1. Monitoring, analysis, projection

- Size, corridors, channels
- Counter-cyclicality
- Effects on poverty, education, health,
investmen
- Policy (costs, competition, exchange
controls)

3. Financial access
- Deposit and saving products
- Loan products (mortgages,
consumer loans,
microfinance)
- Credit history for MFI clients
- Insurance products

International
Remittances
Agenda

4. Capital market access

- Private banks and
corporations
(securitization)
- Governments (diaspora
bonds)
- Sovereign credit rating

2. Retail payment systems

- Payment platforms/instruments
- Regulation (clearing and settlement, capital
adequacy, exchange controls, disclosure, crossborder arbitration)
- Anti-money laundering/Countering financing of
terrorism (AML/CFT)

Proposed structure

10
multidisciplinary
experts

Steering Committee

Secretariat

Thematic working groups

Volunteer researchers

Donor Community

WorldBankMigration
andRemittancesUnit,
GMGmemberstaff(up
68experts,
to11),Policyoutreach
withaWorld
officers(3),Adminand
BankorGMG
webstaff(3)
staffaschairor
cochair

External partnerships
International and regional agencies
Global Forum on Migration and Development,
Global Migration Group, World Economic Forum,
UN agencies, AU, EC, IOM, ADB, AfDB, IDB,
G20

Research networks
Migrating out of Poverty, Africa Economic
Research Consortium, CEMLA, other research
institutes, universities, and think-tanks

Civil Society

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

Monitoring & evaluation

Workshops and annual conference feedback

Web traffic and use of tools
Impact on policy debate
Changes in access to information available to
migrants, policy makers and researchers

Requests for pilot projects and capacity building

Data and other resources are available at

www.worldbank.org/migration