Impact of Remittances On HRD

Impact of HRD on
Foreign Remittances in South Asia
SAARC
SAARC Human Resource Development Centre
Impact of HRD on
Foreign Remittances in South Asia
Global Research Insight for Development (GRID)

Islamabad-Pakistan
Research Team:
Dr. Vaqar Ahmed
Hamid Mehmood
Muhammad Abdul Wahab
Asif Javed
SAARC
SAARC Human Resource Development Centre
.The challenge for policy makers is this: to devise and implement strategies that
unleash the creative potential of one-quarter of humanity. Extending basic education
for all and creating relevant technical skills are the keys to meeting this challenge.
South Asia is fast approaching a historic watershed. It can realize the promise of a
new dawn in the twenty-first century. Or it can disintegrate into anarchy and
confusion, 'Human history', as H. G. Wells remarked a few decades ago, 'becomes
more and more a race between education and catastrophe'.
Remarks by Dr. Mahbub ul Haq at the launch of report titled Human Development in
South Asia, New Delhi, 4 April 1998
Foreword
Millions of families in the SAARC region depend on foreign remittances receiving
from family members working in almost every country across the globe. It also has
great impact on their health, education and livelihood. It has a great influence on
country's foreign exchange reserves. Keeping in view the significance of the subject,
SHRDC commissioned this research study on 'impact of human resource
development on foreign remittances in South Asia.'
The main objective of the study was to analyze the impact of HRD on remittances in
the SAARC region. The study examines the size and trend of inflow of remittances,
and its impact on SAARC Member States and in the Region. The study also discusses
the policies implemented for attracting remittances, institutional arrangements, and
identifies policy gaps affecting inflow of remittances and suggests measures to fill
these gaps. The study also makes a case for diverting more fiscal resources to HRD
for future sustainability of high-end remittances.
The study also presents the results of an in-depth survey carried out through a
questionnaire-based inquiry.
It is expected that this effort will get due appreciation from HRD policy and practice
communities. The recommendations and future action plan will also help the
stakeholders to implement the HRD and economic development programs in their
respective countries and in the region.
Dr. Riffat Aysha Anis
Director, SHRDC
Acknowledgments
We greatly acknowledge the support of research team at SAARC Human Resource
Development Centre particularly Dr. Riffat Ayesha Anis and Mr. Amir Mustafa.
They provided us with very valuable inputs at various stages of this report. We thank
our core research team which includesMr. Hamid Mahmood, Mr. Muhammad Abdul
Wahab, and Mr. AsifJaved.Without their tireless and determined efforts, it would not
have been possible to accomplish this research study.
We are indebted to many other colleagues who have provided very helpful material,
comments, and support at various stages of the study.
We are grateful to the respondents for timely input in the questionnaire. The input
provided by them also helped us to compile a chapter based on primary data and to
report a regional perspective on HRD and remittances. We received responses from
all the eight SAARC Member States.
Dr. Vaqar Ahmed

Team Leader, GRID
ii
Table of Contents
List of Tables
List of Figures
Abbreviations
1. Introduction and Background
2. Socio-Economic Overview of South Asian Economies
3. Current State of HRD in South Asia
4. Literature Review
5. Current Trends of Remittances in South Asia
6. National Strategies and Best Practices
6.1
Education Policies
6.2
Labor Policies
6.3
Skill Development Policies
6.4
Health Policies
7. Impact of HRD on Remittances: An Econometric Investigation
7.1
Background
7.2
Econometric Model and Variable
7.3
Summary of Econometric Results
8. Results and Discussion
9. Conclusion and Policy Recommendations
Bibliography
Annex-I
Annex-II
iv
iv
v
1
3
12
19
22
30
30
31
33
35
38
38
38
41
42
69
70
73
75
iii
List of Tables
Table 2.1
Table 3.1
Table 3.2
Table 3.3
Table 3.4
Table 3.5
Table 5.1
Table 5.2
Table 5.3
Table 5.4
Table 6.1
Table 7.1
Table 7.2
Table 7.3
Table 8.1
Table A-I
Table A-II
Table A-III
Table A-IV
South Asia: Macroeconomic Indicators

Human Development Index
Education and Literacy South Asia 2009
Mean Year of Schooling- South Asia (%)
South Asia Pupil Teacher Ratio
South Asian Health Indicators 2009
Share of South Asian Countries in Regional Remittance Inflow 2010
Origin of Remittances 2010 (US $ Million)
Intra Remittances Inflow (South Asia) - US $ Million 2009
Emigration Rate of Tertiary Educated Population 2009
Skill Development Indicators- South Asia
Correlation Matrix Results
Ordinary Least Square Estimates
Least Square Dummy Variable Model
Responses from the SAARC Member States
Bangladesh
India
Pakistan
Sri Lanka
List of Figures
Figure 2.1
Figure 2.2
Figure 2.3
Figure 2.4
Figure 2.5
Figure 3.1
Figure 3.2
Figure 3.3
Figure 3.4
Figure 3.5
Figure 5.1
Figure 5.2
Figure 5.3
Figure 5.4
Figure 6.1
Figure 8.1
Figure 8.2
Figure 8.3
Figure 8.4
Figure 8.5
Figure 8.6
Figure 8.7
Figure 8.8
Figure 8.9
Figure 8.10
iv
South Asian GDP Growth 1961-2010

Fixed Investment % of GDP-South Asia 1960-2010
South Asian Exports as % of GDP
Workers' remittances % of GDP -South Asia
Economic Growth Performance across South Asia
Educated Unemployed in South Asia
South Asia Public Spending on Education (% of GDP)
Education Expenditure Annual Average 2005-2010
Health Expenditure Annual Average 2005-2010
South Asia School and Tertiary Enrollment
External Resource Inflow South Asia 1980 2010
Global Workers Remittances
Worker's Remittances relative to GDP
Remittances in South Asia
Formal Training by Region (%)
Educational Level of Respondents in the SAARC Memeber States
Type of organizations
Use of education
Monthly income of respondents
Respondents illnesses
Absence from job due to illness
Modes of remittances
Amount of remittances
Uses of remittances - home country
Impact of remittances
Abbreviations
ADB
EU
FDI
GDP
GR
GATS
GNI
HRD
HDI
HEC
HDC
ILO
ICT
LSDV
MDG
MFN
NVQF
NSDC
NAVTEC
NGO
ODA
OECD
OLS
SAARC
UN
UGC
UNDP
WB
WHO
WCR
WEF
Asian Development Bank

European Union
Foreign Direct Investment
Gross Domestic Product
Growth Rate
General Agreement on Trade in Services
Gross National Income
Human Resource Development
Higher Education Commission
Hospital Development Committees
International Labor Organization
Information and Communications Technology
Least Square Dummy Variable
Millennium Development Goals
Most Favored Nation
National Vocational Qualification Framework
National Skills Development Council
National Vocational and Technical Education Commission
Non Government Organization
Official Development Assistance
Organization for Economic Cooperation and Development
Ordinary Least Square
South Asian Association for Regional Cooperation
United Nations
University Grants Commission
United Nations Development Programme
World Bank
World Health Indicators
World Competiveness Report
World Economic Forum
1.
Introduction and Background
South Asian region has experienced substantial economic growth during the past
decade. This has also been complimented by a rising middle class phenomenon
which not only acts as an impetus to growth but also adds to the innovation and
entrepreneurship potential available with a country. While a growing number of
people in the working age group represent a growing potential for increasing
productivity, there are also challenges associated with such a change in demography.
For example a growing working age population will demand improved
infrastructure and social services and this is where the governments of almost all
1
South Asian economies feel challenged (Ahmed 2011) .
The scientific literature has established that (working) middle class is a precondition of stability in the societal structures and also helps in mitigating inequality
in the society (Nayab 2011). This fact is also illustrated by Easterly (2001) that
nations with a large middle class tend to grow faster. This can be substantiated
through two historic examples where such a phenomenon has been observed and
these include the English middle class of 18th and 19th century and today's middle
class in China and India.
The literature also tells us that even beyond the economic importance of youth bulge
and growing working population, one should also appreciate their impact on social,
political and cultural changes in the society. Collier (1999) showed that this group of
people forms alliance with lower classes in the society in order to demand an
inclusive political system. Acemoglu and Robinson (2003) indicate that decisive
voters in democracy are from middle class. Similarly Bannerjee and Duflo (2007)
explain that middle class is a source of new entrepreneurs and this class stresses on
accumulation of human capital and savings.
There is also a warning in the literature and unfortunately this phenomenon has
already started to occur in South Asia. Basu (2003) showed how the non-existence of
venues for channeling human capital and savings of working population can bring
about a tendency towards increased consumption expenditure in turn putting the
sustainability of economic growth in danger.
Having established the importance of youth bulge (in South Asia), the next question
to ask is what does this working segment of the population demand. The most
immediate needs are education and jobs. This is where one needs to highlight
regional, national and local strategies for Human Resource Development (HRD).
The HRD should be in line with international patterns of demand of goods and
services. As the demand for labour is derived demand therefore the HRD has to be
made relevant to the labour market needs. These markets will be from two different
yet linked sectors. The first will be the demand for human resource in domestic
sectors and the second will be the demand for South Asian workers abroad. While
1
Ahmed, Vaqar. Regional Cooperation for Economic Growth. Daily Business Recorder, 27 October
2011.
South Asian economies are at a very different stage if compared with those countries
where the South Asian Diaspora lives, however most skilled migrants exercise those
jobs in foreign countries whose training they receive in their home countries.
This study focuses on the link between HRD and remittances in South Asian
economies. The rising growth in South Asia still remains inadequate to absorb the
substantial stock of population that lives in these countries. Therefore in the medium
to longer term South Asian workers will continue to look towards greener pastures
abroad. This implies that HRD strategies in South Asia should aim to look carefully
at the labour market demand patterns abroad. For South Asian workers to compete
globally they will have to be equipped with education and skill types that have
demand as well as accreditation.
2.
Socio-Economic Overview of South Asian Economies
The socio-economic position of the South Asia region reflects growing concern and
reflects poor performance in many areas including education, health and
environment. The human capital in this context plays a crucial role. Although, the
South Asia region particularly India has accelerated growth momentum for the past
one decade and has shown impressive performance in key economic indicators, yet
lot needs to be done as regards the social indicators. There are also concerns
regarding the manner in which the fruits of economic growth are not being shared
equally in turn giving rise to income and consumption inequalities.
Growth, Investment, Exports and Remittances in South Asia
We can observe that rising real GDP growth in South Asia (Figure 2.1) since 1960s
has been facilitated by growth in fixed investment (Figure 2.2) an expanding export
orientation (Figure 2.3) and the post-1990s phenomenon of rising workers'
remittances (Figure 2.4).
Figure 2.1: South Asian GDP Growth 1961-2010
20
Growth %
15
10
5
0
2009
2006
2003
2000
1997
1994
1991
1988
1985
1982
1979
1976
1973
1970
1967
1964
1961
-5
Source: The World Bank-2010

Generally speaking, South Asia region comprises population of 1568 million with
2
population growth of 1.6 percent annually . The population density is 323 people per
km with labor force of 607 million and urban population comprising of 29.8 percent
of the total population. The unemployment rate is 5.2 percent and the gross national
income is US $1644 billion. Moreover, the average GDP growth for the whole region
2
Migration and Remittances fact book 2011, The World Bank
is 7.6 percent and the age dependency ratio at 58.5 of the total population. One of the
key challenges that South Asia will face in future deals with increased urbanization.
As more and more youth migrate towards cities in order to find as International Labor
Organization (ILO) will put it decent jobs, this is also complimented by increased
internal migration that takes place due to climate change induced natural disasters
and internal and external security threats.
Figure 2.2: Fixed Investment % of GDP-South Asia 1960-2010
35
30
% of GDP
25
20
15
10
5
2008
2005
2002
1999
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969
1966
1963
1960

The UN estimates suggests that globally, world population will be rising by about 78
million every year and the projections further states that it will be in the vicinity of 7.3
billion to 10.7 billion in 2050. The fortunate aspect for South Asia is that it has a
substantial youth bulge which if trained properly can act as an engine of growth.
Currently, South Asia represents the 23 percent of the world's population and the
investment in HRD for taking multiple advantages of globalization is very less. The
Diaspora can play an important role in bringing skills with capital. This has been seen
for countries such as China and now India where expatriates are playing an
increasing role in forming joint ventures.
Recently the surge in remittances inflow in South Asia has reshaped the economic
policy focus and agenda. Remittance receipts have been seen to be a dominant factor
when compared with other external inflows in the form of official aid, foreign direct
investment and other external capital receipts. The key challenge now is to steer
these savings of expatriate South Asian's towards productive uses with higher
multiplier effects.
We can now look at the key features of the South Asian economies. The Afghan
economy still has a long way to go before it can establish itself as a vibrant partner of
the South Asian community. It must be appreciated that Afghanistan presents a
strong opportunity for all South Asian countries in terms of its strategic location and
as a gateway to Central Asia and the Middle East. The Afghanistan economy mainly
comprises of contributions from the agriculture sector and recently witnessed surge
of external aid inflow and investment. Agriculture contributes around 33 percent to
3
the overall GDP. About 12 percent of land is suitable for cultivation and 80 percent
4
of Afghan population is living in the rural areas . The main output in agriculture
sector is wheat, cereals, fruits, and nuts.
Figure 2.3: South Asian Exports as % of GDP
25
% of GDP
20
15
10
5
0
2008
2005
2002
1999
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969
1966
1963
1960
The industrial sector value addition is 22 percent of the GDP. The industrial outputs
of Afghanistan include wood products, papers, printing and publishing. The
contribution of services sector in GDP is around 45 percent and includes the subsector of wholesale and retail trade, hotel and restaurants, transport and
communication, banking and financial activity and government services. For the last
five years there has been a downward trend witnessed in agriculture and industry
sector as compared with the services sector which is mainly due to investment in
transport and communication, investment in cellular mobile phones, aviation and
banking.
The economy of Bangladesh is agrarian with 63 percent of the workforce associated
with agriculture (including livestock), forestry, and fisheries. The sector comprises
3
The World Bank Report 2005

Afghanistan Country Overview 2011, The World Bank
major products in the form of wheat, pulses (leguminous plants, such as peas, beans,
and lentils) and sweet potatoes, oilseeds of various kinds, sugarcane, tobacco, and
fruits such as bananas, mangoes, and pineapples. The industrial output includes
garments and knitwear, jute goods, frozen fish and seafood, textiles, fertilizer, sugar,
tea, leather and ship-breaking for scrap. Major impediments to growth are frequent
cyclones and floods in the country.
% of GDP
Figure 2.4 : Workers Remittances % of GDP -South Asia
5
4.5
4
3.5
3
2.5
1
1.5
1
0.5
0
2009
2007
2005
2003
2001
1999
1997
1995
1993
1993
1989
1987
1985
1983
1981
1979
1977
1975

Bangladesh has been witnessing growth in both remittances and exports. Both of
these external inflows have leveraged the economy towards a high growth trajectory.
For a detailed analysis of determinants of increase in remittances in Bangladesh see
Raihan et al. (2009). In case of exports, the inflow of modern technology in textile
sector and preferential access to the European Union have bolstered the growth in
volume and value of textile exports. However Bangladesh still faces substantial
infrastructure challenges in order to sustain this growth. Addressing these challenges
will require sustained structural reforms.
Bhutan is amongst least developed countries in the South Asian region with
agriculture and forestry providing livelihood to more than 60 percent of the
population. The agriculture sector largely comprises of subsistence farming and
animal husbandry. The country has strong monetary and trade linkages with India
and industrial sector at the moment is technologically backward, with most of the
production coming from cottage industry. There are certain projects including power
generation where substantial potential for investment exists.
The economy of India showed an impressive growth in the recent past owing to
deregulation and the performance of the services sector. This has helped in
improving the socio-economic dimensions of the country. The post liberalization
period brought many institutional changes which improved the performance and
growth rate of Indian economy. Indian government initiated the long term
liberalization plan and foreign direct investments were welcomed, public
monopolies started to diminish and tertiary sectors' development was deepened.
Indian government prioritized the development of money and capital market at a
time where it was crucial to raise funds for sustaining future economic growth.
The agriculture sector contributed 17 percent to the GDP in 2009. The major
agricultural outputs of the county are wheat, rice, coarse grains, oilseeds, sugar,
cotton, jute and tea. The industrial sector contributed 28 percent to the GDP. The
major industrial output of the country are textiles, processed food, steel, machinery,
transport equipment, cement, aluminium, fertilizers, mining, petroleum, chemicals,
and computer software. India (as part of its production process) also imports
petroleum products, machinery and transport equipment, electronic goods, edible
oils, fertilizers, chemicals, gold, textiles, iron and steel. U.S., China, U.A.E., EU,
Russia and Japan are the major trading partners of India. Indian economy has
witnessed a boom in the services sector which have in turn contributed to the tune of
56.3 percent to the economy.
The Indian economy in many respects provides substantial opportunities to all South
Asian countries. The rising domestic demand in India will imply greater exporting
gains for neighbors. However this is only possible if; a) neighboring countries work
towards improving their own competitiveness in terms of price and quality, and b)
India resolves the issues regarding non-tariff barriers currently faced by its South
Asian neighbors. In turn India can gain through strategic trade corridors which its
neighbors can open up for Indian goods to reach borders beyond South Asia. India
still needs to work towards inclusive governance and reform of legal and judicial
system so that the fruits of the current booming economy can be shared with poor and
vulnerable.
Maldives comprises of 1,191 islands in the Indian Ocean. The tourism and fisheries
are the major economic activities of the county. Petroleum products, ships,
foodstuffs and clothing goods are the major imports. The country exports mainly
comprise of fisheries. France, Italy, UK, Singapore, UAE, India, Malaysia, Sri Lanka
and Thailand are the major trading partners of the country. In December 2004,
Maldives was hit by tsunami and the economic growth rate sharply declined,
however the economy saw a revival of tourism and construction in 2006. The
economy again contracted in 2009 due to the global recession.
In Nepal agriculture contributes 34 percent to the overall GDP and major agricultural
outputs are wheat, maize, sugarcane, oilseed, jute, millet and potatoes while
industrial sector contributes 16 percent to the GDP with carpets, pashmina,
garments, cement, cigarettes, bricks, sugar, soap, and matches being major industrial
outputs. Nepal also has enormous tourism potential and in order to reap benefits it
will be important that current tourism infrastructure is updated on expedient basis.
The remittances from abroad have greatly helped the balance of payments situation
in Nepal. Currently remittances represent 25 percent of GDP.
Pakistan's economy has experienced an average growth rate of 5 percent between
2001 and 2010. However in the wake of food, fuel and financial crisis, the economy
saw decline in aid and FDI inflows (see Ahmed and O' Donoghue 2010). With
dwindling foreign exchange reserves, Pakistan resorted to IMF standby arrangement
and gradually moved towards a recovery phase during 2008-09. However in 2010 the
economy was hit by a domestic energy crisis, where inter-corporate debt crippled the
energy sector and led to electricity and gas shortages. With some recovery in large
scale manufacturing the growth in 2010 crossed 4 percent and exports remained
robust despite the looming global recession.
Pakistan's growth prospects have also been curtailed due to the natural calamities
which recent struck across all provinces. The phenomenon of back-to-back floods
has not only impacted agriculture (including livestock) but has also led to
unfavorable migratory patterns. More recently Pakistan has taken a significant
constitutional measure to devolve the social sectors governance to the provincial
governments. This is aimed at improving service delivery (through empowerment of
decentralized units of governance) for better achievement of MDGs. Pakistan's
balance of payments has also been helped by rising remittances which have kept
demand (particularly at household level) buoyant.
The economy of Sri Lanka is characterized with dependency on agriculture sector
with rice, sugarcane, grains, pulses, oilseed, spices, vegetables, fruit, tea, rubber,
coconuts, milk, eggs, hides, beef and fish being the main agricultural outputs. Sri
Lanka suffered a brutal civil war from 1983 to 2009. Despite the war, Sri Lankan
GDP growth averaged nearly 5 percent in the last 10 years. The growth rate was 3.5
percent in 2009 owing partially due to the global recession. Food processing, textiles
and apparel, food and beverages, port construction, telecommunications, insurance
and banking are the rising and growing sectors of Sri Lanka. About 1.5 million Sri
Lankans are working abroad and the country receives more than $ 3 billion in the
form of remittances annually.
Sri Lanka also has the advantage of being ahead of other South Asian member
countries in terms of the educated workforce. The literacy rate is the highest in the
region and this provides an opportunity for reaping future dividends. The country has
also gained from opening up its trade and investment to India and trade flows
between both countries have increased since 2003.
While most South Asian economies are similar in economic characteristics such as a
predominantly rural-agricultural workforce, rising proportion of youth in the
population, increased exports and remittances prospects, however their individual

growth performances have been greatly affected by political economic milieu in
each country. The political instability and the tug of war between civilian and
military forces for gaining top governmental offices has been a norm particularly in
case of Bangladesh and Pakistan.
Figure 2.5: Economic Growth Performance across South Asia
12
% Growth
10
8
6
4
2
ka
iL
an
n
sta
ki
Pa
ep
al
s
1990s
Sr
Ba
al
di
ve
a
di
In
an
1980s
ut
Bh
1970s
de
1960s
ng
ni
ha
fg
A
la
sta
sh
2000s

During the 1960s for example Pakistan had the highest growth rate across South Asia
and to some extent Pakistan maintained this lead in 1970s and 1980s despite the sour
experiences of nationalization of industry and Soviet invasion of Afghanistan
(Figure 2.5). However the 1990s transition towards democracy was painful and
average growth rates plummeted. During 1990s we see that Maldives and India rose
in growth performance and during the 2000s Bhutan, Afghanistan and India
remained in the lead. In case of Afghanistan and Bhutan the increase was partially
due to the substantial excess capacity available in their economies. For India of
course it was a well managed case of deregulation and liberalization. Sadly despite
their long economic histories, South Asian countries still remain distant from each
other in terms of intra-regional trade. We also provide statistics on key
macroeconomic variables on South Asia in .
Table 2.1: South Asia: Macroeconomic Indicators

Country/Indicators
Afghanistan
Real GDP growth (%)
Agriculture growth (%)
Industry growth (%)
Services growth (%)
FDI (% of GDP)
Current account balance (% of GDP)
Fiscal Deficit (% of GDP)
Real GDP per Capita (GR)
Exports of goods and services (% of GDP)
Import of goods and services (% of GDP)
Bangladesh
Real GDP growth (%)
Industry growth (%)
Services growth (%)
FDI (% of GDP)
Bhutan
Real GDP growth (%)
Industry growth (%)
Services growth (%)
FDI (% of GDP)
India
Real GDP growth (%)
Industry growth (%)
Services growth (%)
FDI (% of GDP)
10
2005
2006
2007
2008
2009
2010
14.5
6.7
23.9
14.6
4.0
-2.7
-4.3
12.4
25.2
71.3
11.2
0.6
20.1
16.9
2.9
-4.6
-7.1
9.0
22.9
64.0
16.2
24.6
7.3
14.2
2.4
0.8
-8.3
13.9
17.3
56.6
-15.4
-23.4
-4.1
-13.9
2.8
-1.9
-4.2
-17.0
17.3
52.8
17.3
23.3
5.5
17.9
1.5
-3.9
-13.1
15.0
14.4
44.1
...
...
...
...
...
...
...
...
...
6.0
2.2
8.3
6.4
1.4
-1.0
-3.7
4.6
16.6
23.0
6.6
4.9
9.7
6.4
1.2
1.3
-3.3
5.3
19.0
25.2
6.4
4.6
8.4
6.9
1.0
1.4
-2.8
5.1
19.8
26.7
6.2
3.2
6.8
6.5
1.3
0.9
-5.3
4.8
20.3
28.8
5.7
4.1
6.5
6.3
0.8
2.7
-3.7
4.4
19.4
26.6
5.8
4.7
6.0
6.4
1.0
3.7
-3.9
4.5
18.5
24.9
7.0
0.7
4.0
14.3
1.1
-29.2
-6.7
5.6
39.7
63.8
8.6
2.8
13.3
8.6
0.7
-4.7
-0.8
6.6
62.6
67.0
17.9
0.8
40.7
6.1
6.1
15.8
0.6
15.8
55.0
57.3
4.7
0.7
6.1
4.7
2.4
-2.2
0.7
2.7
46.6
57.7
6.7
2.7
3.6
13.3
2.9
-1.7
1.8
4.8
64.7
72.0
...
...
...
...
-14.3
-4.7
...
...
...
9.5
5.1
9.7
11.0
1.0
-1.2
-4.0
7.9
19.3
22.0
9.6
4.2
12.2
10.1
2.3
-1.0
-3.3
8.0
21.1
24.2
9.3
5.8
9.7
10.3
2.3
-1.3
-2.5
7.8
20.4
24.4
6.8
-0.1
4.4
10.1
3.6
-2.2
-6.0
5.3
23.8
28.9
8.0
0.4
8.0
8.7
2.8
-2.8
-6.4
6.5
19.8
25.0
8.5
6.6
7.9
9.4
1.5
-2.3
-5.1
7.1
21.5
24.8
Country/Indicators
Maldives
Real GDP growth (%)
Industry growth (%)
Services growth (%)
FDI (% of GDP)
Nepal
Real GDP growth (%)
Industry growth (%)
Services growth (%)
FDI (% of GDP)
Pakistan
Real GDP growth (%)
Industry growth (%)
Services growth (%)
FDI (% of GDP)
Sri Lanka
Real GDP growth (%)
Industry growth (%)
Services growth (%)
FDI (% of GDP)
2005
2006
2007
2008
2009
2010
-7.1
6.2
10.4
-12.0
5.4
-27.9
-8.3
-8.5
64.6
99.3
21.4
5.1
10.4
25.4
5.0
-23.5
-4.9
19.3
83.7
101.3
12.1
-11.2
22.6
11.2
6.0
-29.0
-3.3
10.0
83.1
103.9
12.0
-2.7
6.1
14.0
7.5
-36.2
-11.9
10.3
83.5
110.1
-6.5
-6.6
-25.1
-2.3
6.4
-24.0
-22.1
-7.9
67.0
94
9.9
-8.3
8.4
10.8
8.6
-24.2
-15.8
8.1
...
...
3.5
3.5
3.0
3.3
0.0
1.9
-0.8
1.2
14.6
29.5
3.4
1.9
4.4
5.6
-0.1
2.2
-1.6
1.1
13.4
31.3
3.4
1.0
4.0
4.5
0.1
-0.1
-1.8
1.1
12.9
31.7
6.1
5.8
1.6
7.3
0.0
3.1
-2.1
3.8
12.8
33.3
4.4
3.0
-1.4
6.0
0.3
4.2
-3.2
0.6
12.4
34.7
4.6
1.3
3.3
6.0
0.5
-2.4
-2.3
2.3
9.8
37.4
9.0
6.5
12.1
8.5
2.1
-1.4
-3.3
6.9
15.7
19.6
5.8
6.3
4.1
6.5
3.6
-3.9
-4.3
3.9
15.2
23.2
6.8
4.1
8.8
7.0
4.1
-4.8
-4.4
5.0
14.2
21.3
3.7
1.0
1.4
6.0
3.9
-9.5
-7.3
1.9
12.9
23.9
1.7
4.0
-0.1
1.7
1.6
-5.9
-5.1
0.0
12.9
20.4
3.8
0.6
8.3
2.9
1.2
-2.3
-5.9
2.4
13.6
19.4
6.2
2.9
8.3
4.5
1.1
-2.7
-7.0
5.3
7.7
7.2
8.5
7.6
1.7
-5.3
-7.0
6.4
6.8
2.8
8.9
9.2
1.9
-4.3
-6.9
6.1
6.0
7.5
5.9
5.6
1.8
-9.5
-7.0
4.9
3.5
3.2
4.2
3.3
1.0
-0.5
-9.9
2.4
8.0
7.0
8.4
8.0
1.0
-2.9
-7.9
6.7
Exports of goods and services (% of GDP) 32.3

30.1
41.3
41.1
Source: Asian Development Bank Online Database-2011
29.1
39.5
24.8
38.5
21.3
27.8
21.7
30.8
11
3.
Current State of HRD in South Asia
Before we embark upon a detailed diagnostic analysis of HRD in South Asia, we must
point out that there is a large stock of educated young people available in this region
who not only contribute to the domestic economy but are part of an active South Asian
Diaspora abroad. However given that South Asian economies have remained slow to
deregulate, liberalize and provide an enabling environment for the private sector has
resulted in many educated youth not getting absorbed locally. This is depicted in
Figure 3.1 which shows the shares of educated youth by level of education. One can
readily observe that the proportion of unemployed with tertiary education has risen
overtime. It is this segment that is most prone to leaving home country and going
abroad for green pastures where there is a higher rate of return to education.
% of Total Unemployment
Figure 3.1: Educated Unemployed in South Asia

45
40
35
30
25
20
15
10
5
0
1994
1995
1996
1997
1998
Unemployed with tertiary education
2000
2004
2005
Unemployed with primary education
Unemployed with secondary education

Figure 3.2 : South Asia Public Spending on Education (% of GDP)
3.5
3
% of GDP
2.5
2
1.5
1
0.5
0
1971
1975
1980
1985
12
1998
1999
2000
2003
2004
2006
2008
2009
While there are questions raised about low budgetary priority giving to education in
the budgets of South Asian governments (Figure 3.2), however it must be flagged
here that even these low levels of budgetary allocations are not absorbed fully due to
governance challenges with in the education sector.
There is enough data to suggest that the low level of public sector expenditure for
education has prompted the private sector to step up and fill in this vacuum. There are
also several studies that suggest that having private sector in the provision of
education has in fact raised the quality of education in South Asia. However there are
instances of market failure that suggest the dire need for public sector intervention for
regions and communities that are not feasible for private sector. This is important to
note as populations in many parts of South Asia are sparsely distributed and the lack
of population concentration does not attract the private sector. India, Pakistan and
Bangladesh which house some of the largest populations in the world spend lower
than any regional or global standards in terms of public expenditure on education
(Figure 3.3). Same situation is also observed for the health sector (Figure 3.4)
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
8.0
6.2
2.7
2.7
hA
ut
an
iL
Sr
sia
ka
2.3
sta
Pa
ki
ep
N
di
al
M
al
s
ve
a
di
In
ut
Bh
de
la
ng
Ba
an
2.4
So
3.4
3.2
sh
% of GDP
Figure 3.3: Education Expenditure Annual Average 2005-2010
Source: Asian Development Bank Online Database-2011.

The appreciation of HRD for promoting economic growth has been researched and
recognized as one of key elements for development in the country. Promoting human
resource domestically has been viewed as a critical factor for facing global
competition and regional integration and this has changed the scope of HRD and
strategies to a large extent and also brought the HRD definition to new levels with
increasing focus on high-end education and comprehensive health coverage for
galvanizing its relationship with other crucial indicators at macro and
microeconomic level.
13
Figure 3.4: Health Expenditure Annual Average 2005-2010

6.6
7.0
6.0
% of GDP
5.0
3.6
4.0
3.0
1.9
1.9
1.8
2.0
1.2
1.1
0.8
1.0
1.2
ep
al
N
al
di
ve
s
ia
In
d
Pa
ki
sta
n
Sr
iL
an
ka
So
ut
hA
sia
fg
ha
ni
sta
n
Ba
ng
la
de
sh
Bh
ut
an
0.0

From economic theory it is known that endogenising the forces of productivity
(including labour productivity) is now far more important than mere accumulation of
labour, capital and other factors of production. While a well trained human resource
base is much needed in order to attract foreign investment, however in times when
growth rate of working population is higher a qualified labour force becomes
ambassador in foreign countries and contributes towards foreign exchange reserves
which in turn ease the balance of payments pressures in developing countries.
While public sector dominates South Asia in the provision of higher education, there
is a vibrant private sector that contributes towards provision of primary and
secondary education. This growth of private institutes has particularly been seen in
India, Pakistan and Bangladesh.
Table 3.1:
Country
Afghanistan
Pakistan
Bangladesh
Bhutan
India
Maldives
Nepal
Sri Lanka
South Asia

2000
0.4
0.4
0.4
0.5
0.4
0.4
2005
0.3
0.5
0.4
0.5
0.6
0.4
0.6
0.5
2006
0.3
0.5
0.4
0.5
0.6
0.4
0.6
0.5
2007
0.3
0.5
0.4
0.5
0.6
0.4
0.6
0.5
2008
0.3
0.5
0.5
0.5
0.6
0.4
0.7
0.5
2009
0.3
0.5
0.5
0.5
0.6
0.4
0.7
0.5
2010
0.3
0.5
0.5
0.5
0.6
0.4
0.7
0.5
Rank in 2010
155
125
129
119
107
138
91
---
Source: UN Statistics Department-2011

Table 3.1 above illustrates the HDI ranking of 2010 for the South Asian countries.
The performance of Afghanistan and Nepal in terms of HDI ranking has remained the
14
same since 2000 and they ranked in 2010 at 155th and 138th respectively indicating
that there is slight or no improvement taking place with regard to human
development indicators. Going forward in order to reverse these numbers this region
will have to work and invest prudently if it is to train and groom its human resource
for international competition.
Pakistan has shown slight improvement in terms of improving score and ranking
from 0.4 in 2000 to 0.5 in year 2010 which shows that investment (or reforms) is
taking place on human resource but not at a pace desired by international standards.
th
Pakistan ranked 125 in the overall ranking. The case is similar for Bangladesh
which has shown only a slight improvement.
The performance for India and Maldives also exhibit marginal improvements. Sri
Lanka has performed far better in terms of HDI as compared to other South Asian
countries due to its increased investment on human capital and more specifically on
education which has largely improved and has helped Sri Lanka increase in
migration and remittances from abroad. Considering the entire South Asian region
the average score for year 2000 stood at 0.4 which has improved to 0.5 for the year
2010. Afghanistan faces uphill challenges as it stood 155th for HDI ranking in 2010.
The educational improvement has been strongly linked to remittances inflow. This
realization has helped in transforming the primary, secondary, tertiary and
vocational training skills and credentials which helps in migration of skilled labor
force and increased remittances inflows. Table 3.2 below highlights certain
education indicators for South Asian region and countries falling in its vicinity.
Table 3.2:
Education and Literacy South Asia 2009
Country/Indicators Primary education Total Net enrolment ratio in Adult literacy rate (%)
completion rate
primary education (%)
(%)
38.8
...
Afghanistan
61.1
66.4
55.5
Pakistan
60.5
89.6
55.9
Bangladesh
88.5
88.4
52.8
Bhutan
94.8
95.5
62.8
India
119.4
96.2
98.4
Maldives
70.0
73.6
59.1
Nepal
97.5
95.1
90.6
Sri Lanka
South Asia
78.8
86.4
67.9

The average primary education completion rate is 78.8 percent in South Asian
region. It is lowest for Afghanistan and highest for Maldives which is 119.4 percent.
India, Pakistan, Bangladesh, Bhutan, Nepal and Sri Lanka have shown
15
improvement in this indicator if compared with previous periods. The adult literacy
rate for South Asia as a whole is 67.9 percent which is less as compared to other
regions of the world. The highest literacy rate is recorded in Maldives which is 98.4
percent followed by Sri Lanka. Similarly the net enrollment ratio is recorded highest
for Maldives and lowest for Pakistan.
Table 3.3:
Mean Year of Schooling- South Asia (%)
Country
2000 2001 2002 2003
Afghanistan 2.16 2.25 2.33 2.42
Bangladesh 3.69 3.79 3.89 3.99
..
..
..
..
Bhutan
3.58 3.66 3.74 3.82
India
3.02 3.19 3.36 3.53
Maldives
2.35 2.43 2.50 2.58
Nepal
3.27 3.52 3.76 4.01
Pakistan
7.56 7.63 7.70 7.77
Sri Lanka
South Asia
3.66 3.78 3.90 4.02
2004 2005
2.51 2.60
4.09 4.19
..
..
3.90 3.98
3.71 3.88
2.66 2.74
4.26 4.51
7.85 7.92
4.14 4.26
2006
2.74
4.30
..
4.06
4.05
2.84
4.58
7.97
4.36
2007 2008 2009 2010

2.89 3.03 3.18 3.33
4.42 4.54 4.65 4.77
..
..
..
..
4.14 4.23 4.31 4.40
4.22 4.39 4.57 4.74
2.94 3.04 3.14 3.24
4.65 4.73 4.80 4.87
8.03 8.09 8.14 8.20
4.47 4.58 4.68 4.79
Within the education indicators the mean years of schooling is one of the important
indicators used in human development index.
Table 3.3 above shows the position of South Asia in this context for the years 20002010. Every country in the South Asian region has shown improvement with
Afghanistan showing an improvement from 2.1 in 2000 to 3.3 for year 2010,
Bangladesh from 3.6 to 4.7, India from 3.5 to 4.4, Maldives from 3.0 to 4.7, Nepal 2.3
to 3.2, Pakistan 3.2 to 4.8 and Sri Lanka from 7.5 to 8.2 percent. Overall South Asian
average was 3.6 percent in 2000 and has now increased to 4.7 percent in 2010. This
can be attributed to the growing population and its demand for education which
national governments or private sector in South Asia step up to provide.
Unfortunately there is little statistics regarding private investment which has gone
towards education (and health) sectors.
Table 3.4:
South Asia Pupil Teacher Ratio
Country/Indicators Primary PupilTeacher Ratio

1990
2000
2009
41.2
32.1
43.0
Afghanistan
43.0
33.0
39.7
Pakistan
63.0
47.0
43.7
Bangladesh
41.1
27.7
Bhutan
46.0
40.0
40.2
India
22.7
12.7
Maldives
39.2
42.6
33.3
Nepal
29.1
26.3
23.5
Sri Lanka
South Asia
43.6
35.6
33.0
Secondary PupilTeacher Ratio

1990
2000
2009
24.8
28.0
31.6
19.5
19.8
41.9
27.4
38.4
27.1
32.5
20.6
28.7
33.6
32.7
15.3
13.7
31.1
30.2
40.9
19.1
19.6
19.5
25.1
27.2
28.5
16
Table 3.4 shows that in 1990s there was 1 teacher for every 43 primary school
students. By 2009 this number had come down to 33. However the statistics were
contrary for secondary schooling where the pupil to teacher ratio in fact increased.
Increased students in a single class imply less of teacher's attention for everyone.
This certainly impacts not only the students learning abilities, but teacher's own
efficiency in terms of imparting knowledge in the most constructive manner.
Percentage
Figure 3.5: South Asia School and Tertiary Enrollment

100
90
80
70
60
50
40
30
20
10
0
1991 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Primary School Enrollment (% net)
Tertiary Enrollment (% gross)

It is also important to see in Figure 3.5 the wide gap that exists between primary and
tertiary enrollments. In 2009 while primary school enrollment in South Asia was 86.4
percent, the tertiary enrollment was a mere 11.4 percent. There is wide research in this
region that shows how such a gap has occurred. Primarily this has to do with declining
returns to education. The governments in this part of the world must act fast in order to
reverse this trend and to bring about public policies that encourage a maximum
number of students to continue education until the tertiary/professional level.
The Table 3.5 below shows the health indicators and their performance across South
Asian countries. Health imparts the level of productivity which labor needs and
eroded health has ramifications in the loss of labor productivity, deprivation from
education and motivational attitude towards skill development and other related
concerns. The position of few selected indicators reveal that on average the total
fertility rate in South Asia is around 3 births per women, prevalence of underweight
children under five years is 37 percent, under five mortality rate is 70, infant
mortality rate is 51 and maternal mortality ratio stands at 361. By any global
comparisons South Asia is clearly on the lower side as regards health indicators.
17
Table 3.5:
Country
Afghanistan
Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka
South Asia
South Asian Health Indicators (2009)

Total
fertility rate
(births per
woman)
6.6
2.3
2.6
2.7
2.0
2.9
4.0
2.3
3.0
Pre valence of
Underweight
Children Under
Five Years of
Age (%)
39
46
19
48
30
45
38
29
37
Under Five
Mortality
Rate(deaths
per 1,000 live
births)
199
52
79
66
13
48
87
15
70
Infant
Mortality
Rate(deaths
per 1,000
live births)
134
41
52
50
11
39
71
13
51
Maternal
Mortality
Ratio(per
100,000
live births
1,400
340
200
230
37
380
260
39
361

The comparisons across countries indicate that total fertility rate is lowest in
Maldives while it is highest in Afghanistan which is 6.6 births per woman. The
prevalence of underweight children is lowest in Bhutan to around 19 percent while it
is highest in India which is 48 percent. The underweight mortality is lowest in Sri
Lanka at about 15 and high for Afghanistan at 199. The infant mortality rate which is
monitored closely by the World Health Organization (WHO) stands at 13 for Sri
Lanka while it is highest for Afghanistan which is 134. The maternal mortality ratio
is lowest for Maldives which is 37 and highest for Afghanistan which is around 1400.
In case of Afghanistan a sustained effort is required to build capacity of health sector
experts in order to even provide basic services.
Besides the performance of health and education, other indicators including active
population between ages 15-64 years and labor force participation rate is also
correlated with level of development. On average in South Asia, active population is
62.2 as percentage of total population which is high as compared to other regions of
the world. However when we see the labor productivity of this region it stands at 54.4
percent with other regions performing high e.g. East Asia (60.1 percent), South East
Asia (66.8 percent) and developed countries (64.4 percent).
Why has increased working population not resulted in improvement in labour force
participation rate? The answer primarily lies in the poor human resource standards
that South Asian labour force brings to work place. With almost 40 percent children
malnourished in South Asia, it is not surprising that the participation rates are low.
18
4. Literature Review
a. Migration and Development
Remittances have been known to spur development and also act in a counter cyclical
manner during times of economic crises. The remittance inflows are in fact nondebt
creating instrument which are safety nets managed by families and communities
(Brown 2006). The literature also recognizes that the contribution of remittances can
be enhanced through conducive macroeconomic environment in countries exporting
manpower, innovations in financial sector that enhance flow of remittances through
formal channels and greater coordination at policy level in the context of Mode 4 of
the General Agreement on Trade in Services.
While there is extensive research where concerns have been raised about rising brain
drain in developing countries and main causes highlighted for such trend include
deteriorating economic conditions, lack of good governance and political instability
(Tessema 2009). Besides this, poor remunerations, lack of professional
infrastructure (in case of medical and engineering professionals) and insecurity of
assets and earnings points towards major concern in developing countries (Tahir et
al. 2011). However migration is now increasingly being perceived as a normal part of
social transformation processes which is contrary to the earlier view where migration
was thought of as a loss of home country's human capital (Castles 2009, Rahman
2010).
b. Role of HRD in Economic Growth and Migration
The inability of most developing countries to raise a quality human resource base has
been a constraint not only for growth domestically but also for mobility of workforce
in the context of migration abroad. This issue has recently been highlighted as a
critical constraint in the growth of India's outsourcing industry. Karuvilla and
Ranganathan (2008) highlight four interrelated human resource policy challenges
for outsourcing industry namely current skill shortages, inability of a country to
produce higher value skills, higher levels of employee turnover and rapidly
increasing employment costs.
The importance of HRD to economic growth has been highlighted in Asia to a larger
extent after the booming growth of East Asian economies. It has been recognized that
the acceleration of growth will require technological progress which in turn
originates from increases in human capital (Quibria 1999 and Low 1998). However
increases in labour force that are a consequence of demographic changes in South
Asia will not automatically imply positive changes in the quality of human capital
which is a result of upgrading of tertiary education particularly science and
technology, making investment in research infrastructure in universities and a
general macro and microeconomic milieu that promotes creativity, innovation and
entrepreneurship.
19
The employment practices (including HRD culture) at the firms level also plays a
crucial role in sustaining development of human capital. This is helped by the entry
of multinational companies in developing countries as they bring in new
technologies and practices, ultimately pushing the knowledge frontier in developing
countries across the board (Lawler et al. 1995). This is also supported by on-the-job
trainings which not only address the needs of organizational changes domestically
but also enable the workers to compete abroad (Osman-Ghani and Jacobs 2005).
A new stream of analysis in South Asia focuses on gender responsiveness of HRD
policies and their consequent impact on domestic participation of women and their
mobility abroad. Women who are skilled and have accessibility abroad (through ICT
or otherwise) have been found to prefer working abroad on account of incongruous
local workforce environment, unsafe conditions in field work, discriminatory
behavior of superiors and non-recognition of women's rights and roles. This has
implications for migration of skilled women in particular. Excluding them from
domestic participation in fact implies not giving them equal opportunities for
obtaining job related skills in turn making them non-competitive abroad. For
analysis of women managers in Pakistan see Alam (2009). For analysis on migration
of skilled nurses from Bangladesh see Aminuzamman (2007).
Pradhan (2008) establishes an important connection of remittances and human
resource development and ultimately its impact on poverty alleviation. The study
uses data on 36 countries including South Asia. It concludes that increase in
education has led to positive impact on migration and ultimately towards increased
inflow due to higher stream of earning opportunities abroad. This has helped in
alleviating poverty in the long run, improving social conditions and opportunities in
the native country and has been largely associated with the positive impact on
balance of payments and economic growth in the longer run.
c. HRD and Remittances A Futuristic Perspective
Many South Asian economies represent a surplus of labour found in both rural and
urban areas and at times facing under employment or unemployment. The migration
opportunities present a possible outlet for this substantial surplus. This is particularly
true for countries such as Afghanistan where efforts are underway to negotiate crossborder labour migration. However in order to market its labour abroad it is essential
that Afghanistan (and other South Asian economies) put in place policies where the
surplus pool of labour can be quickly trained and that their skills carry a global
market demand. In this context private sector recruitment and employment exchange
agencies can also play an important role (Pasha 2008). The skill level of migrants
abroad significantly influences the purpose of remittances towards more productive
investments in native countries (Vandean 2007).
Sward and Rao (2009) explore the link between migration and education across four
villages in India and Bangladesh. Their analysis shows that although remittances
20
were not widely invested in education however education helped the mobility of
local villagers. The authors recommend expanding programmes to improve
schooling in rural areas particularly improving state of school facilities, provide
training to teachers, and ensure scholarships for children belonging to poor
households. Deshingkar et al. (2006) also explain how lack of skills, education and
social networks prevent workers from breaking away from indecent jobs. The skill
level is positively associated with wage level. Additional efforts towards reforming
public policy in education and health are required for helping human development
and migration of women and households from lower castes. For India's case see also
Chisti (2007). For Nepal's case see Bhattarai (2005) and Adhikari (2009). There is an
increasingly growing literature on the rights-based development which advocates
preserving basic human rights in the process of economic growth.
For Nepal, Bhadra (2007) show how educational profile of migrants has changed
overtime. In the past the instances of illiterate migrants going abroad particularly to
Middle East was common. However currently it is common to see migrants going for
same jobs who are endowed with primary and at times secondary schooling.
Arif (2009) in a study on Pakistani migrants in Saudi Arabia shows that skill
composition has not changed overtime and unskilled workers remain the dominant
category. Second the educational level of migrants is higher than national average.
Around three-quarters of migrants were employed domestically prior to their
migration. The personal savings of migrants was the major source of financing the
migration process as 37 percent went through recruitment agencies while other were
helped by their relatives or associates. These findings point towards an important
observation i.e. more educated labour force is now available to compete for even
low-skill jobs abroad.
Sharma (2008) shows for South Asia that lack of basic primary education reduces
chances of recruitment abroad (some developed countries have also put strong
language requirements to qualify for visa). The poor (and non-educated) migrants
are more likely to be victims of fraud and exploitation in sending and receiving
countries.
Sinha and Chaudhuri (2007) show for Bangladesh that public policy needs to be
geared towards synchronizing educational schools with training institutes and
universities so that global labour demand can be targeted and internationally relevant
education is provided. An equal emphasis should be on language proficiency at
school level. ADB (2005) shows that education levels of migrants influence their
justification and duration abroad and also influences behavior and manner in which
money is remitted.
21
5. Current Trends of Remittances in South Asia

Today around 80 per cent of remittances flows are directed towards developing
5
countries and since the last one decade this has almost doubled . The remittances
increased from US$31 billion in 1990 to $83 billion in 2000 to more than $338 billion
in 2008. According to the Migration and Remittances Fact book published by the
World Bank, around 3 percent of the world population or approximately 215 million
people lives outside their country. In 2010 the world remittances flows had exceeded
$ 440 billion of which more than US $325 billion was flowing in the direction of
developing countries which shows a 6 percent increase since the global crisis. This
also indicates the resilience of remittances to developing countries and includes the
South Asia region which recorded an increased inflow. This is also evident from the
global external inflow which shows that in 2010 there was a decline of 40 percent in
the Foreign Direct Investment (FDI) flows and 46 percent in private investment and
aid inflows, therefore suggesting that remittance had outpaced other inflows and this
is also true for the South Asian region which is evident from the Figure 5.1 below.
90
80
70
60
50
40
30
20
10
0
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
$ Billion
Figure 5.1: External Resource Inflow South Asia 1980 2010
Remittances
FDI
Private capital flows
Net ODA and official aid

While foreign investment and developmental assistance declined on account of
global recessions, remittances proved to be counter cyclical for South Asia. The
remittances showed unprecedented increase in the current decade. From $17 billion
in 2000 remittances have increased to $75 billion for 2009 and are recorded at close
to $80 billion for 2010 for the whole region. The remittances had shown greater
increase than the total private capital inflows which stood at $69 billion in 2009.
5
Haas and Piper, Remittances, Migration and Development: Policy Options and Policy Illusions,
ADB policy document 2010 and migration and remittances fact book 2011, The World Bank
22
Moreover, three South Asian countries fall in the top recipients of remittances in the
world. These countries include India ($55 billion), Bangladesh ($11.1 billion) and
Pakistan (US$9.4 billion). This is also supported by the fact that the total emigration
from the South Asia region stood at 26.7 million or 1.6 percent of the population with
destination to high income OECD countries (23.6 percent), high income non OECD
countries (34.2 percent), intra-regional (28.2 percent), other developing countries
(9.4 percent) and unidentified (4.6 percent), whereas the immigration in 2010
represents 12.2 million or 0.7 percent of population as compared to 3.2 percent of the
world which accounts for 45.6 percent in the form of females, 20.0 percent as refuges
and other represent the male working category.
Although in terms of the value of remittance inflows South Asia is lower than many
other regions of the world however the resilience of South Asia bound remittances is
clearly evident despite global economic uncertainty which impacted remittance
flows to other parts of the world (Figure 5.2). South Asia is set to catch up with the
levels of remittances seen in case of East Asia and the Pacific.
160
140
120
100
80
60
40
20
0
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
$ Billion
Figure 5.2: Global Workers Remittances
South Asia
East Asia & Pacific
Europe & Central Asia
Latin America & Caribbean
Sub-Saharan Africa

If the value of remittances is seen relative to national output then South Asia tops the
list of remittance recipient countries (Figure 5.3). In this indicator South Asia is then
followed by Sub-Saharan Africa and Latin America. This measure correctly portrays
the current dependence on remittance inflows seen in South Asia. It is also
observable that post-2008 the ratio of remittances to GDP has declined.
23
Figure 5.3: Worker's Remittances relative to GDP

5
% of GDP
4
3
2
1
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
South Asia
East Asia & Pacific
Europe & Central Asia
Latin America & Caribbean
Sub-Saharan Africa

Something that we need to qualify here is that South Asia is still exporting in large
quantities unskilled and semi-skilled workers. Only if these workers can be further
equipped with life skills through an improved HRD regime can they become a
greater source of advantage not just by remitting value-added sum from abroad but
also in terms of knowledge and technology transfers. It is ultimately the transition
from production-led to ideas-led economy that sustains economic growth across
several decades.
Figure 5.4: Remittances in South Asia
60
50
$ Billion
Bhutan
40
Bangladesh
Nepal
30
India
20
Maldives
Pakistan
10
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Sri Lanka
24
Figure 5.4 indicates the value of remittances received across South Asia. India is
followed by Bangladesh and Pakistan. While India and Bangladesh both faced slight
decrease after 2008 before recovering again, the remittance flows in case of Pakistan
remained resilient. In fact the remittance inflow is projected to overtake the export
value of textiles in Pakistan. In terms of percentage share (Table 5.1) India receives
66 percent share of South Asian remittances, while Bangladesh and Pakistan receive
13 and 12 percent respectively.
Table 5.1:
Share of South Asian Countries in Regional Remittance Inflow 2010
Country
Percent (%)
Bhutan
0.01
Bangladesh
13
Nepal
4
India
66
Maldives
0.005
Pakistan
12
Sri Lanka
5
Total
100
Source: The World Bank 2010

Table 5.2:Origin of Remittances 2010 (US $ Million)
Remittances sent
from
Australia
Bahrain
Canada
France
Germany
Italy
Japan
Jordan
Kuwait
Malaysia
Oman
Qatar
Saudi Arabia
Singapore
Spain
Thailand
United Arab
Emirates
United Kingdom
United States
Other South
Other Countries
Total
Afghanistan Bangladesh
Bhutan India Maldives Nepal Pakistan
----------------------------------------------------
42
0
79
4
15
147
23
117
429
252
306
0
917
42
18
11
207
----------------------------------------------------
1,016
665
2,501
171
328
487
101
140
1,904
517
2,168
1,213
7,034
761
158
117
10,582
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
24
0
14
3
11
2
34
5
0
0
0
627
65
0
3
128
0
45
115
312
42
93
129
19
54
247
33
191
504
2,022
46
110
16
911
Sri
Lanka
153
0
240
85
93
155
17
201
408
9
80
171
765
6
2
53
315
----------------
431
304
867
6,839
11,050
----------------
3,185
8,009
1,487
12,455
55,000
0
0
0
2
3
115
143
261
2,077
3,513
908
579
314
2,717
9,407
222
68
70
499
3,612
25
Table 5.2 illustrates the pattern of remittances coming to the South Asian countries
from different origins. The major chunk of remittances come from EU, North
America and Middle East countries. The highest remittances inflow to India can be
seen from countries like Australia, Canada, Kuwait, Saudi Arabia, UAE, UK, USA,
Oman and Qatar. In case of Pakistan a pattern has been seen where low skilled
migrants (who send low level of remittances) are found in Middle East and EU.
However Pakistanis who make it to North America are usually highly qualified or
highly skilled. The highest remittances share for Nepal comes from Qatar, Thailand,
USA and EU.
The level of intra-regional remittances still remains very low (Table 5.3). Just like the
barriers to trade in goods are high, there is also a stiff resistance to labour movement
in these countries. For example during the recent negotiations towards Pakistan
granting MFN status to India, it was seen that the biggest non-tariff barrier between
the two countries is the limited availability of visas permitted on both sides. Similar
is the case between Bangladesh and India. Another important point here is that the
data on labour movement within these countries is very poor. Therefore the data
given and explained here only represents officially reported instances.
Table 5.3:
Recipient
Country
Afghanistan
Bangladesh
India
Nepal
Bhutan
Sri Lanka
Pakistan
Maldives
Total
Intra Remittances Inflow (South Asia) - US $ Million 2009

Afghanistan Bangladesh Bhutan India
----------------------------
0
0
6,770
1
0
0
0
0
6,772
----------------------------
0
5,097
0
4,025
184
1,628
0
0
10,934
Maldives Nepal Pakistan

0
0
0
1
0
0
0
0
1
0
0
2,018
0
2
0
0
0
2,020
0
45
2,314
43
0
0
0
0
2,402
Sri
Lanka
0
0
316
1
0
0
0
0
317

We had reported earlier the significant share of unemployed workers having tertiary
education in South Asia. Here we observe that the nature of unemployment, less than
global rates of returns and better career prospects have led to an increase in
emigration rate of tertiary educated population by 10.2 percent. The rate is highest
for Sri Lanka (having the highest literacy in South Asia) followed by Afghanistan and
Pakistan (Table 5.4). In case of Afghanistan and Pakistan there is evidence of
conflict-induced migration as well. Many have recently viewed the emigration of
tertiary educated persons as a phenomenon of brain circulation rather than brain
drain as these people later in their lives contribute in their native countries through
reverse migration, joint ventures in their home country, transfer of technology,
knowledge and ideas.
26
Table 5.4:
Emigration Rate of Tertiary Educated Population 2009
Country
Emigration rate of tertiary educated population (%)
23.3
Afghanistan
4.3
Bangladesh
0.6
Bhutan
4.3
India
1.2
Maldives
5.3
Nepal
12.6
Pakistan
29.7
Sri Lanka
South Asia
10.2
Box 1: Brain Drain Versus Brain Circulation

The challenge of redirecting the loss of skilled workers into brain circulation
is to find ways of creating opportunities at home. Potential nuclei for
development could be established by focusing on research and development that
is based on national priorities and niches of opportunity. The requirements
necessary to achieve this include:
1. Implementing educational strategies that support and nurture these
nuclei through both targeted national programmes and training abroad.
2. Investing in infrastructure for research and development and creating
conditions that foster the growth of public-sector and private-sector
demand for research results, technological development and innovation.
3. Building an enlightened leadership and enabling national scientific
community with opportunities for coherent development of scientific
and technological capacity.
Scientists and highly skilled professionals who have emigrated are recoverable
assets that can play a part in developing opportunities at home. However, getting
them back requires the opening of diverse and creative conduits. One of these
could be the strategic channeling of remittances to generate investment in
research and development, to be used together with matching government funds
and/or fiscal benefits as incentives.
Source: Aruz, M., and Wittchen, U. (2010). Brain drain across the globe:
Country case studies. Report accessed from: http://ow.ly/89Axb, retrieved 24
December 2011
27
6.
National Strategies and Best Practices
In this section we study the various strands within HRD and their state in South Asian
region. While some diagnostics has already been provided earlier, therefore in this
section we will make an effort to evaluate the current public policies for HRD across
South Asia.
6.1
Education Policies
In Afghanistan education system is regaining itself after regular volatility in the form
of war and conflict. The education policy of Afghanistan under Ministry of
Education and its policy document in 2002 pinpoints areas of change which includes
providing compulsory primary education opportunities for all, equitable education
opportunities, developing unified curriculum, establishing modern learning system,
campaign in eradicating illiteracy, modernizing educational environment, expand
vocational institutions, benefit from the educational expertise of international
community and imparting progressive attitude towards development
The National Strategic Education Plan of Bangladesh aims to increase the quantity
and quality of education in the country via de-politicization of public school, college
and universities, institutional reforms for bringing professionalism, strengthening
of University Grants Commission (UGC), improving the quality of teachers through
regular training measures, establishing accreditation council, support for research
and development of strategies for retaining and developing quality teaching staff.
The level of higher education in Bhutan is at its infancy stage and the primary and
secondary level is performing moderately. In collaboration with Ministry of
Education and Department of Adult and Higher Education has initiated several steps
which include aligning development in education with societal needs, facilitating
and enhancing growth and expansion of quality institutions, good relationship
between Government and private sector institutions in areas of financing and
research, liberal and stable policy environment, creation of a knowledge hub in the
society, developing curriculum supporting the needs of the industry and services
sector and creation of national research system.
The increasing population of India and its young labor force are increasingly
demanding quality education. In order to utilize this opportunity the Ministry of
human resource development, and the 11th Five Year Plan embark on some key
initiatives including providing opportunities to a large number of population to be
equipped with secondary and higher education, expanding access to education via
supporting existing institutions, establishing new institutions, supporting
stakeholders and private sector in increasing the level of education, strengthening
research, innovations and imparting modern knowledge, provision of technical and
skill development, increasing investment in infrastructure and faculty programs via
institutional restructuring and engaging local and international community for
efforts towards enhancing quality education in the country.
30
Maldives policy currently focuses on the quality aspect in the school curriculum and
teaching methods. In Nepal higher national education policy focuses on increasing
the level of education and vocational institutes. Both primarily focuses on increasing
the quality of education through regular updated curriculum both formally as well as
informally, making efforts of liberalizing education for all and through provision of
free school education, changes in the higher education in line with modern practices
and reforming curriculum to meet international standards.
In Pakistan the UGC was transformed into Higher Education Commission (HEC) in
2002 and has done commendable job so far in bringing necessary changes according
to the global standard. The federal Ministry of Education has been devolved after the
18th constitutional amendment and now the affairs of primary and secondary
education are taken care of by the provinces. However the provinces have yet to
come up with their own educational policies. Several steps are being taken for
uplifting higher education including optimizing the existing resources, investment
on physical infrastructure development and technological advancement, increasing
the participation rate, focus on quality improvement in faculty, research and learning
environment, uniform curriculum and key linkages with modern trends in education
and promoting excellence in learning and research.
The Mahinda Chintana vision for Sri Lanka outlines an education agenda focused on
creating knowledge economy, competitiveness and higher education, technical
expertise and consultative process and through multi-pronged approach of building
quality aspect in institutions which translates into quality framework for lower strata
of primary and secondary education, more reliance and focus on investment in
higher education, quality framework and increasing quality education institutions in
line with incorporating modern curriculum and standards.
6.2
Labor Policies
In Afghanistan recently International Labour Organization (ILO) has stepped up the

efforts to strengthen labour law governance in the country. It is envisaged that ILO
will provide technical support to strengthen the capacity at government and nongovernment level for implementation of international labour standards and also
chalk out reporting obligations for employers. This project will also initiate a reform
program for Ministry of Labour, Social Affairs, Martyrs and Disabled. As
Afghanistan is about to start framing and implementing labour laws in line with the
known and established conventions therefore it will be important that the Ministry
maintains a linkage of labour policy with the international patterns of demand and
supply of various types of labour (skilled, semi-skilled and unskilled). This will help
the mobility of Afghan workers inside and outside the country.
Bangladesh has been focused on increasing vocational and training institutes,
effective management of human resource, training and lifelong learning for people
with nationally identified special needs, such as youth, low-skilled people, people
31
with disabilities, migrants, older workers, indigenous people, ethnic minority groups
and the socially excluded and for workers in small and medium-sized enterprises,
enhancing individuals' employability and improving labor employment and
competencies.
In Bhutan the Ministry of Labour and Human Resources is responsible for the
implementation of labour and related policies. The Ministry more recently (in
collaboration with UNDP) has embarked upon strengthening of labour market
information system which in turn can help in preparation of human resource
development strategies. This process is also intended to facilitate the job matching
process and will also provide counseling services for prospective candidates. It is
envisaged that apprenticeship program will be put in place through a public private
partnership. Finally a framework is being developed which can support selfemployment ventures across the country. This framework will also strengthen the
micro credit program.
India's policy on skill development (2009) envisions 500 million workers to be
skilled by 2022 with some key characteristics including harnessing inclusivity and
reduction of economic and social divisions, fulfilling demands for skills across
various industries and economic enterprises and incorporating modern skills,
bringing out the relevance of National Vocational Qualification Framework,
developing standard certification system, integrating institutions for knowledge
sharing, identification and prioritization of sector based skill development,
enhancing competency standards and qualification, academies of excellence to be
promoted and well based sector-specific labor market information system to be
established.
In Maldives a rapid assessment of the employment situation has recently been
concluded6. This assessment looks critically at the recent state of labour policies and
recommends review and amendments in the employment act 2008, formulation and
enactment of a law on trade unions and labour relations, formulation and enactment
of a law on pensions for employees of both the public and private sectors. There are
also other recommendations which aim to prescribe minimum wages, put in place
punishment for forced labour, develop national standards for occupational safety,
formulating standards for employment of seafarers, fishers, doctors, nurses,
employees of resorts, restaurants, home workers, ports and dockworkers. Finally
there is also a call for expediting the completion of procedures for becoming a
member of ILO.
In Pakistan the main policy thrust is towards adherence of labor laws and friendly
environment in all sectors via increasing employment through growth oriented
interventions, focusing on employment generation in rural areas and reducing
unemployment especially among educated cohort. Pakistan is also looking in to
6
http://www.hrcm.org.mv/Publications/otherreports/TheEmploymentSituationintheMaldivesEng.pdf
32
reforming various labour laws that are currently hindering the expansion of small
businesses. Furthermore worker's rights and proper working environments are being
carefully checked all across the country.
Sri Lanka's labor policy focuses on workers education, human resource placement,
labor market information, social dialogue and cooperation, conducting regular
training workshops, disseminate public awareness, capacity building and full
participation of all stakeholders for promoting labor welfare and social dialogue
especially in work place. Sri Lanka's labour promotion and exchange policies have
borne fruit as the proportion of educated holding tertiary degrees and getting
placements abroad is highest for Sri Lanka in comparison to other South Asian
countries.
6.3
Skill Development Policies
Currently the level of vocational education in the South Asian region is still very low.
The position of South Asia in terms of formal training lacks far behind the other
regions of the world. The rate of formal training stands at 11 percent, whereas the
same rate in Latin America and Caribbean is at 56 percent, East Asia and Pacific and
Africa are at 54 and 35 percent respectively (Figure 6.1).
Figure 6.1: Formal Training by Region (%)
South Asia
11
Middle East and North Africa
11
Europe and Central Asia

Africa
13
16
Latin America and Carribean

East Asia and Pacific
25
24
Source: National Skill Strategy, NAVTEC-2010-13, Pakistan-2009

Bangladesh envisions skills development policy as imperative for providing the
necessary human resource base via its Skill Development Policy 2010-15. It focuses
on improving the quality and relevance of skills and includes establishment of
responsive delivery mechanisms, increasing participation in courses, employers
33
skills development, improving workers attitude and community involvement,

enhancing the role of National Skills Development Council (NSDC) and expansion
towards monitoring activities. There is also emphasis on structural reforms which are
more demand driven, competency based training, improving and expanding the level
of nationally recognized qualifications, increased collaboration with industry,
improving labor market statistics and strengthening apprenticeship.
The 9th Five Year Plan (2002-2006) of Bhutan recognizes the measures to be taken in
this regard for improving skill development in the country via maximizing the
resources and preserving the culture, relaxation of qualification, leaves permitted for
attaining technical course degree, demand oriented policy and skills for catering to
market and inculcating reforms for increasing institutes and quality in this area.
The 11th Five Year Plan of India recognizes skill development to be an important
constituent for bringing change at the microeconomic level and reforms in these
areas include increasing the capacity of 15 million population annually, inclusivity,
promoting excellence through the supply of trained workers, result based outcome,
incorporating innovation, provision of National Vocational Qualification
Framework (NVQF), increasing arrangements through public investment and
participation of private sector, promoting partnerships between government,
industry and civil society institutions.
The policy focus of Maldives rests on the greater involvement of the private sector,
expanding vocational training including non-formal and formal education at both
rural and urban areas, focused participation of rural communities and increasing the
literacy rate. The Government of Nepal stresses on increasing training opportunities,
one uniform system, linking economic demands with training and flexibility,
deregulation, autonomy and decentralization, provision of free start up support to
organized and reliable training providers.
In Pakistan, the National Vocational and Technical Education Commission
(NAVTEC) 2010-13 emphasizes the role of skill development and highlights
strategies to achieve this through: increasing the competency based training
institutes, integrating institutes with industrial establishment centers of excellence,
further increasing role of private sector, reforming the apprenticeship system,
encouraging entrepreneurship, increasing the participation of women, training
expansion to bottle neck areas and remote places, increasing mobilization of quality
trainers and encouraging research and development. In post 18th Amendment milieu
provinces will have more responsibility in designing the curriculum and framing
skill development policies.
The South Asia region still has a long way to go in improving in human capital base
and that is highly dependent on the reforms and structural changes in the areas of
education which also includes the skill development initiatives. Moreover, India and
34
Sri Lanka has shown improvement in higher education faster than the rest of the
South Asia (). The poorest in this regard was Nepal.
Nepal's pursuit towards education and skill development was adversely affected due
to the conflict. There is a need now to not only revive the local economy but also to
forecast the future demand of a skilled labour force. In doing so it is critical to first
assess the effectiveness of the conventional education system in Nepal. This will also
help in highlighting the gaps which need to be filled by the vocational training.
Table 6.1:
Skill Development Indicators- South Asia
Country
Higher
education and
training
Quality of education
system7
Local availability of
specialized research and
training services
Afghanistan
Bangladesh
Bhutan
Maldives
Nepal
India
Pakistan
Sri Lanka
---126
------131
85
123
62
---94
------116
39
87
44
---127
------133
51
97
46
Higher
education
and training
(rank)
---126
------131
85
63
62
Source: World Competiveness Report 2010-11, World Economic Forum

6.4
Health Policies
The main policy focus of Afghanistan in health sector is to increase the infrastructure
of hospitals and quality of doctors in the country, decreasing mortality through
provision of innovative tools, local research and development to cater solution to
diseases, to check the effectiveness via interventions of the major causes
contributing to the child and infant mortality, scale up efforts through service
oriented and awareness programs, equitable access ensuring full coverage, essential
actions to save the lives of newborns and children under 5 through expanded
coverage and improved quality of critical lifesaving interventions, affordable
medicines via cost effectiveness and showing commitment to all stakeholders via
involving them to participate in curtailing the anomalies in health sector.
The Government of Bangladesh is endeavoring for ensuring safety and standards
mechanism in health. The present policy focuses on ensuring an effective health care
system that responds to the needs of rural and urban populations. Moreover the
policy aims at ensuring necessary basic medical utilities accessing people's reach,
developing easy and sustained availability of health services, maintain quality via
acceptance and availability of primary health care, reducing malnutrition among
people, expanding program for reducing health risks especially associated with
7
Imparting quality and new education with higher education means the increase in the enrollment
from secondary level especially education at the college or university level.
35
children, improving health services and to take every step in ensuring doctors
presence and reducing the health hazards.
Bhutan's health policy envisages areas of intervention via promotion of primary
health care, integrated and quality care services, establishment of free health
services, promoting indigenous development through research and development in
the field of medical, accessing services to those areas where health hazard risk is
high, reproductive health services and sustained population planning activities.
India's 11th five year plan aims at reducing health hazard and issues of malnutrition.
The Government realizes the importance of practical steps towards reducing health
risks through establishment of Hospital Development Committees, expanding and
improving services in hospitals, increasing the investment in infrastructure,
provision of high quality secondary health care services, building state of the art
medical education and research institutions, up gradation and equipping the hospitals
with new technologies, developing essential drug lists, availability of good quality
drugs, increasing health coverage, disseminating information on drugs and other
lifesaving medicines and bringing professionalism and training of health workers
and doctors in line with international standards.
Since the initiation of Country Health Plan 1981, Maldives has strived towards
universal provision of primary health care. The current health policy also aims to
increase life expectancy and reduce incidence of preventable diseases. The
government is currently further extending its efforts towards development of stateof-the-art health infrastructure. Particular attention is being paid to focus on the
marginalized groups and poor segments of the population.
The Government of Nepal aims at health improvement through area based
interventions, improving the health of the vulnerable groups and individuals
especially in rural areas, expanding health service provision and extending the
coverage to all districts via cost-effective public health measures and essential
curative services for the appropriate treatment of common diseases, improving the
expertise of technically competent and socially responsible health personnel in
appropriate numbers for quality health care, improving management and
organization of the public health sector via increase in efficiency and effectiveness
of the health care system, increasing participation of private sector and NGOs and
support effective decentralization of health care services with full community
participation.
The National Health Policy of Pakistan 2009 seeks to improve the health indicators
of the country. Its principle stance and objective rests on delivering health services
which could improve the standard of living via improvement in health hazards
issues, increasing the coverage of individuals who are out of health care net,
increasing the intensive care units and lady health workers, gathering reliable data
and statistics for targeting the vulnerable population, effectiveness and design using
36
strategic and emerging technology, reduction in the burden of diseases and

protecting the poor and under privileged population. However with the 18th
constitutional amendment effective since June 2011 the responsibility for
implementation of this health policy now lies with the provinces. There are some
vertical health programs which will remain with the federal government for the
medium term such as the country-wide expanded program for immunization.
The Sri Lankan government is also trying to reduce difficulties in access to health.
The broad aim of the health policy is to increase the life expectancy by reducing
preventable deaths, improving quality of life by reducing preventable disease, and
disability, highlighting positive aspects of health through health promotion, reducing
the maternal and child health problems, strengthening the existing preventive health
program, developing a comprehensive coordinated and focused program, improving
awareness and accessibility, imparting good knowledge and encouraging
participation of the community and more importantly improving the existing
medical facilities and developing additional services to meet a wider range of
institutional and community demand.
37
7.
Impact of HRD on Remittances: An Econometric Investigation
7.1
Background
The remittance inflows mainly depend upon three main factors namely stocks of
migrant in foreign countries, income structure of migrants and living standard of
immigrant in their native country. Singh et al. (2009) argued that the emigrant stocks
is possibly the most important determinant of remittances (see also, Ratha and Shaw
2007; Freund and Spatafora 2008; Lueth and Ruiz-Arranz 2008). Sander (2003)
confirms that there is significant influence of immigrants income structure abroad,
exchange rate, inflation and interest rate in native country on remittances. VargasSilva and Huang's (2006) reveals that macroeconomic conditions in the foreign
country have a significant influence on the remitting decisions of migrants.
According to Sander (2003) migrant's profile and salary level, the cost of living
abroad, political and economic volatility in their native country, the migration
period, and generational patterns are key factors which determine size of
remittances, whereas Puri and Ritzema (1999) identified the available facilities to
transfer remittances as one of the factors that determine the size of remittances.
Flows of remittances are positively influenced by natural hazards and financial
instability, low income and high inflation (Blue 2000).
In this study we have carried out panel data analysis of remittances in South Asian
economies (Bangladesh, India, Pakistan and Sri Lanka) using ordinary least squares
(OLS) regression analysis. There are several advantages of using panel data OLS.
First it increases the sample size considerably and secondly spells of unemployment,
job turnover and labor mobility can better be studied with panel data.
Despite of having several advantages panel data poses several estimation problems
for instance autocorrelation, heteroscedasticity and cross-correlation in individual
units at the same point in time. This should not weaken our analysis as there are
several estimation techniques to address one or more of these problems. The two
most prominent are the fixed effects model and the random effects model or error
components model (Gujarati 2009).
7.2
Econometric Model and Variable
In order to analyze the impact of HRD on remittances inflow we have employed an

econometric model as shown below:
Remittances = 0 + 1X1i + 2X2i+ 3X3i+ 4X4i+ 5X5i+ i ----------------------(1)
Where: X1i = Infant Mortality, X2i = School enrollment, primary (% of gross), X3i =
School enrollment, tertiary (% of gross), X4i = Real per Capita GDP, and X5i = Credit
to Private sector % of GDP.
The main HRD and socio-economic indicators which influence the flows of
remittances are considered including health, education, business environment in the
8
The dataset used in the econometric analysis is placed at Annex-II.
38
native country and immigrant's living standard in their native country. Similar
specification is found in Ernesto Lopez-Cordova (2006). In order to determine the
available health facilities to immigrants in their native country, we have used the
infant mortality rate as a proxy of health and infant mortality rate is the number of
infants dying before reaching one year of age per 1000 live births in a given year.
Primary, secondary and tertiary school enrollments as percentage of gross
enrollment are taken as a proxy of available skill and educational level in the native
country and it is assumed that the negative relation with remittances implies that
workforce after educating got job in the native country whereas positive relation
show that the education helps the migrant to get a job abroad. Credit to private sector
is taken as a proxy of business environment. Real per capita GDP is taken as a proxy
of measuring living standard, as higher per capita GDP indicates better living
standard in native country and vice versa.
Table 7.1:
Correlation Matrix Results
Variables
Remittances (as
% of GDP)
Mortality rate,
under-5(per 1,000)
School enrollment,
primary (% gross)
School enrollment,
secondary (% gross)
School enrollment,
tertiary (% gross)
Real per Capita GDP
Credit to
Private sector % GDP
Remittances Mortality School

School
School
Real Credit
to
rate, enrollment, enrollment, enrollment, per
(as % of
Private
under-5
GDP)
primary (% secondary tertiary (% Capita
sector
(per
gross)
(% gross)
gross)
GDP % GDP
1,000)
1
-0.51
0.06
0.75
-
0.37
0.90
-
0.86
0.05
0.24
-
0.52
0.29
0.49
0.60
0.80
0.67
-
0.59
0.53
0.88
0.62
0.04
0.47
1
0.64
Table 7.1 shows that there is high correlation of secondary school enrollment with
primary school enrollment, mortality rate and real per capita GDP, therefore in order
to avoid the problem of multicollinearity we drop this variable. Table 7.2 shows the
OLS estimates of standard econometric remittances model. Findings show that
higher infant mortality negatively impacts remittances and results are statistically
significant. Ernesto Lopez- Cordova (2006) also find the negative relationship
between remittances and infant mortality.
In case of education, primary school enrolment has negative impact on remittances
whereas tertiary school enrollment has positive impact. The results are significant
and are in line with the findings of Clark and Drinkwater (2001). The workforce with
higher education is more likely to contribute towards remittances inflows.
Real per capita GDP negatively impact remittances which implies that the increase in
real per capita GDP will result in more jobs at home which in turn will increase labour
39
demand in home country. The result is significant and in line with the findings of
Blue (2000) that the low income and high inflation in the native country positively
influenced remittances flows. Credit to private sector as percentage of GDP has
positive impact on remittances inflow which implies that those who migrate have
access to financial markets. This also means that a well established financial system
helps the mobility of labour inside and outside of one's country.
Table 7.2:
Ordinary Least Square Estimates
Remittances (as % of GNI)

Infant Mortality Rate
primary School enrollment, (%
gross)
tertiary School enrollment, (%
gross)
Real per Capita GDP
Credit to Private sector % GDP
_cons
No of Observations = 152
R Square = 0.81
Coef.
-0.03
-3.73
Std. Err.
0.00
0.24
t
-8.1
-15.7
P>t
0
0
0.59
0.15
3.9
-0.20
0.49
19.33
0.08
0.09
1.57
-2.6
5.6
12.3
0
0
0
Due to the simplistic nature of the model there is chance that it may distort the true
relationship between the exogenous and endogenous variables. Therefore to take
account of this problem we will apply Least Square Dummy Variable (LSDV) model
or Fixed effect Model. The LSDV is specified as:
Remittances = 1 + 2D2i + 3D3i+ 4D4i+ 1X1i + 2X2i+ 3X3i+ 4X4i+ 5X5i + i ----- (2)
Where,
D2i = 1 if the observation belongs to India, 0 otherwise; D3i = 1 if the observation
belongs to Pakistan, 0 otherwise; and D4i = 1 if the observation belongs to Sri Lanka,
0 otherwise. Since we have four countries, we have used only three dummies to avoid
falling into the dummy-variable trap (i.e., the situation of perfect collinearity). Hence
there is no dummy for Bangladesh. In other words, 1 represents the intercept of
Bangladesh and 2, 3, and 4, the differential intercept coefficients, tell by how
much the intercepts of India, Pakistan, and Sri Lanka respectively differ from the
intercept of Bangladesh. In short, Bangladesh becomes the benchmark for
comparison among the countries.
Table 7.3 shows the regression results of LSDV model and comparing it with the
OLS regression results discussed earlier, it shows that all the coefficients are
individually highly significant, as the p values of the t estimates are extremely small.
The intercept values of the four countries are statistically different. For instance in
case of Bangladesh the intercept is 20.93 and for India, 20.5 (= 20.93 + -0.43) for
Pakistan, 21.32 (= 20.93+0.40) and for Sri Lanka 22.70 (= 20.93 + 1.78). The meager
difference in intercepts may be due to unique feature of each country, such as
differences in skill development facilities across countries.
40
Table 7.3:
Least Square Dummy Variable Model
Remittances (as % of GNI)

D2
D3
D4
Infant Mortality Rate
Primary School enrollment, (% gross)
Tertiary School enrollment, (% gross)
Real per Capita GDP
Credit to Private sector % GDP
Intercept
No of Observations = 152
R- Square = 0.86
Coef.
-0.43
0.40
1.78
-0.01
-3.31
1.29
-0.83
0.69
20.93
Std. Err.
0.14
0.32
0.71
0.00
0.29
0.26
0.37
0.16
2.78
t
-3.13
1.23
2.50
-2.78
-11.38
5.02
-2.24
4.36
7.52
P>t
0.00
0.22
0.01
0.01
0.00
0.00
0.03
0.00
0.00
7.3 Summary of Econometric Results

In order to see the impact of HRD on remittances we have estimated a general
remittances model by considering four main HRD indicators including health,
education, immigrants living standard in their native country and facilitation to
private sector for four SAARC countries (i.e. Bangladesh, India, Pakistan and Sri
Lanka) for which time series data was available from World Development
Indicators. We have applied simple Ordinary Least Square (OLS) technique to see
the relationship between endogenous (Remittances) and exogenous variables (Infant
mortality, gross primary school enrollment, gross tertiary enrollment, real per capita
GDP and credit to private sector). Results suggest that infant mortality, gross primary
school enrollment and real per capita GDP have negative relation, whereas gross
tertiary school enrollment and credit to private sector has positive relationship with
remittances in these countries. The result indicates that higher level of education
facilitates mobility of labour and allows better opportunities for working abroad.
Furthermore we have applied fixed effect model to study the difference in the
relationship between endogenous and exogenous variables among four economies
and found a slight deviation in intercepts which may be attributed to unique features
(i.e. available HRD opportunities) across countries.
41
8.
Results and Discussion
An in-depth survey was conducted during the third and fourth quarter of the year 2011 in
all the SAARC Member States. The objectives of the study were to:
Analyse the increased literacy rate, improved qualification and better health
standards which help in increasing the amount of remittances

Report occupational activities abroad which are instrumental in contributing to
the remittances
Evaluate the channels through which formal and informal remittances are
being sent
Gauge the impact of migrants living abroad and its direct and indirect
contribution in the home countries
Know the ways in which remittances impact the households welfare in the
home countries
Observe the measures which are providing prospective migrants marketoriented skills and have global demand
Validate importance of HRD in increasing remittance potential in South Asia
Numbers of responses received from the SAARC Member States are shown in table
Table 8.1: Responses from the SAARC Member States
S. No
1.
2.
3.
4.
5.
6.
7.
8.
Total
SAARC Member States

Afghanistan
Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka
No of Responses
13
16
12
24
13
20
29
14
141
The results of the study are presented in the following two parts:
Part I. Individual Member States
Part II. Regional Scenario: Results were discussed in light of previous findings.
Part I: Individual Member States of the SAARC Region
1.
Afghanistan
1.1
Demographic information
The results revealed that almost all (95%) the respondents were sending a part of
their income home, as they were living abroad with their own families. Among the
respondents 10% belonged to the age group of 18-25 years, 60% between 25-40
42
years and 30% were >40 years of age. The marital status showed that 90% of the
respondents were married. The education level of the respondents varied and they
were holding degrees like: PhD (20%), M. Phil (20%), Masters (40%), Engineering
(10%) and Graduation (10%)
1.2
Work experience and organizational information
The working experience of respondents (30%, 40% and 30%) was <5 years, 5-10
years and10-15 years respectively. The types of organizations in which they were
employed showed that 70% belonged to the service sector, 20% were working in the
agriculture sector and10% in the industrial sector.
1.3
Use of education in adopting profession
The results revealed that half (50%) of the respondents were running their own
business, less than half (40%) were doing the skilled jobs, and remaining (10%) with
sound academic back ground got scholarships in the Universities.
1.4
Earning due to education
Most (60%) of the respondents were of the view that vocational education helps in
better earning, one fifth (20%) responded that Engineers were earning more,
whereas, some and equal numbers (10% and 10%) thought that Business
Management and Social Sciences education facilitate in better earnings.
1.5
Source of income in the home country
Less than half (40%) of the respondents shared their view that main source of
household earnings in their native country was salaries/wages, one fifth (20%)
supported agriculture, more than one quarter (30%) supported other sources and
some (10%) had no source of income except remittances.
1.6
Monthly income
In response to the amount of money earned per month, more than half (60%) of the
respondents were earning > 2000US$, One fifth (20%) between 500-1000US$,
while the same percentage (20%) earned < 500US$.
1.7
Illnesses health status
Health profile is an important component in overall development of the human

resources. The results showed that most of the respondents (80%) were enjoying
good health during the past 12 months, while one fifth (20%) suffered from illnesses.
43
1.8
Discussing the number of days being absent from job during the last year, the results
indicated that one fifth (20%) of the respondents remained absent from duty for
about 7 working days. Most of the respondents (80%) had no loss in wages/ salaries
due to sickness.
1.9
The respondents used different channels for sending money home as more than half
(60%) were utilizing the services of banks, whereas, less than half (40%) preferred
formal money transfer companies.
1.10
The amount of money sent by the respondents back home annually varied, as some
(10%) were sending > 2000US$, one fifth (20%) between 1500-2000US$, more than
one fourth (30%) between 500-700US$, and less than half (40%) were sending <
500US$.
1.11
Remittances sent during the last year
The amount of money sent to their families during the last year showed that half of
the respondents (50%) had sent > 700US$, some (10%) between 500-1000US$ and
less than half (40%) transmitted < 500US$.
1.12
Use of remittances in the home country
In response to the use of remittances at home half of the respondents (50%) replied
that their families were not well off and their earnings were inadequate to meet the
household expenditure, more than quarter (30%) believed that their families were
investing in businesses and one fifth (20%) responded that money was spent on
purchase of durable goods like: refrigerators, cars, motorcycles, TVs etc.
1.13
Remittances had positive impact on the social and economic status of the
respondent's families. Some (10%) of the respondents thought that money sent by
them have provided opportunities for higher education, one fifth (20%) viewed
money has been spent on image building in the community, some (10%) responded
performance of religious rituals, more than a quarter (30%) were of the opinion that
their families had access to better services, and same percentage (30%) were of the
view that some contribution is being made for charity, which was not possible earlier.
44
2.
Bangladesh
2.1
In Bangladesh most (77%) of the respondents were sending a part of their income
home. The age group to which (92%) almost all the respondents belonged was
between 25-40 years and (8%) > 40 years. The marital status showed that 54% of the
respondents were married. Among both, the married and un-married 62% were
living with their families abroad. The education level of the respondents' was
diversified and they were holding higher degrees like: MPhil (8%) and Masters
(76%), while no response was received from 16%.
2.2
Work experience and organizational information
The work experience of the respondents (38%, 31%, 15% and 16%) was <5 years, 510 years, 10-15 years and >15 years respectively. The types of organizations in which
54% of the respondents were working included the service sector, and an equal
numbers (23% and 23%) in the industrial and agriculture sectors.
2.3
The responses showed that more than half (54%) of the respondents were running
their business, whereas, less than half (46%) had skilled jobs abroad.
2.4
The field of education which helped the respondents in decent earnings included
degrees like: Engineering (15%), Medicine (8%), Business Management (15%),
Social Sciences (23%) and Vocational Education (39%).
2.5
The main source of household income in the home country as responded by less than
a quarter (23%) was agriculture, more than quarter (31%) replied salaries/wages,
more than quarter (31%) said others sources and some (15%) affirmed that their
families have no source of income, except remittances.
2.6
Monthly income
In response to the amount of monthly income earned by the respondents more than
half (69%) stated > 2000US$, less than one fifth (15%) earned 1000-1500US$, and
an equal numbers (8% and 8%) earned between 1500-2000US$, and < 500US$.
2.7
In response to illnesses most (85%) of the respondents had never been sick during the
past 12 months, while some (15%) reported otherwise.
45
2.8
The number of days remained absent from job during the last year, more than a
quarter (30%) of the respondents reported that they were absent for 8-30 working
days, some (8%) for 7 working days, and more than half (62%) had no loss in wages/
salaries as they were present on their duties and did not suffered any sickness.
2.9
Different means were used for sending the money back home, almost a quarter and
equal numbers (23% and 23%) of the respondents were using internet/online
banking and commercial banks, more than a quarter (38%) used formal money
transfer companies and some (16%) via credit unions.
2.10
The amount of money sent by the respondents to their families per year varied in
amount, as some (16%) were sending > 2000US$, a few (8%) between 15002000US$, some (15%) between 500-700US$, less than half (31%) were sending <
700-1000US$, some and equal numbers (15% and 15%) between 1000 - 1500US$
and < 500US$.
2.11
Remittances sent during last year
The amount of money sent by the respondents to their families during the last year was >
2000US$ (15%), 1000-1500US$ (23%), 500-1000US$ (47%), and < 500US$ (15%).
2.12
Less than half (46%) of the respondents viewed that their families were not well off
as their earnings were meagre, therefore, the money was utilized to supplement the
household income, less than a quarter and equal numbers (23% and 23%) believed
that their families were investing in businesses, and purchase of durable goods like;
refrigerators, cars, motorcycles, TVs etc. and some (8%) responded that residential
accommodation was constructed.
2.13
Remittances have made positive impact on their families, as some (8%) of the
respondents were of the opinion that it provided opportunities for higher education,
less than a quarter (23%) thought money was used in building the image among the
community, some (15%) supported that savings assisted the families to perform
religious rituals, some (15%) judged that money helped in migration from village to
urban areas, more than one fourth (31%) viewed securing access to better services,
and some (8%) responded that families can contribute in charity, which was not
possible earlier.
46
3.
Bhutan
3.1
Most of the respondents (80%) were sending a part of their income home. All the
respondents from Bhutan were between the ages of 25-40 years. The marital status
showed that 70% were married, and 70% of the respondents were living abroad with
their families. The respondents' education levels were diversified and were holding
degrees like: PhD (10%), M. Phil (10%), Medicine (10%), Engineering (20%),
Masters (30%) and Graduation (20%).
3.2
Working experience and organizational information
The working experience of the respondents varied as less than half (30%) had <5
years of experience, half (50%) possessed 5-10 years and one fifth (20%) had 10-15
years of working experience. The sector wise distribution showed that most (80%) of
the respondents were working in the service sector and one fifth (20%) in the
industrial sector. None of the respondents were working in the agriculture sector.
3.3
The responses showed that most (70%) of the respondents were running business,
one fifth (20%) got skilled jobs, and some (10%) of the respondents were studying on
scholarships abroad.
3.4
The field of education which helped in better earnings were Business Management
and Social Sciences as reported by less than half and equal numbers (30% and 30%)
of the respondents. Degrees in Engineering and Medicine as thought by one fifth
(20% and 20%) were better contributors in earning more money abroad.
3.5
The findings depict that main source of household income in the home country was
agriculture as responded by some (10%) respondents, more than a quarter (30%)
reported salaries/wages, half (50%) of the respondents had other sources, and some
(10%) of the families had no source of income except remittances.
3.6
Monthly income
In response to the amount of monthly income earned by the respondents while

working abroad showed that more than half (60%) of the respondents was earning
>US$2000, one fifth (20%) between US$ 500-1000, and one fifth (20%) <US$500.
47
3.7
The health status showed a positive condition as most (80%) of the respondents had
good health during the past 12 months, whereas, remaining 20% reported otherwise.
3.8
Most (70%) of the respondents remained absent due to sickness for 7 days from the
job, whereas, one fifth (20%) remained absent for >7 days and some (10%) between
7-30 working days and there was loss in their wages/ salaries during the last year.
3.9
Different modes were used for sending the money home as less than half (40%) of the
respondents were using formal money transfer, one fifth equal numbers (20% and
20%) preferred bank to bank transfer and credit unions. Some (10%) sent money
through internet/online banking and some (10%) used informal channels.
3.10
The money sent by the respondents to their families also varied. One fifth (20%) were
sending > 2000US$, some (10%) between 1500-2000US$, some (10%) between
500-700US$, more than quarter (30%) < 500US$, some (10%) between 10001500US$, and one fifth (20%) between 700-1000US$ annually.
3.11
The amount of money sent by the respondents to their families during the last year
was > 2000US$ as said by more than a quarter (30%), less than half (40%) reported
1000-1500US$, less than quarter (20%) replied < 500US$, and some (10%) of the
respondents said that they sent 500-1000US$ during the last year to their families.
3.12
Among the respondents less than half (40%) believed that their families were not
financially strong, therefore, the money sent by them was utilized to supplement the
household income, more than a quarter (30%) viewed that money was spent on
education of their children, and one fifth (20%) replied that their families invested in
construction of residential accommodation, and some (10%) invested in other sort of
business.
3.13
Half (50%) of the respondents viewed that remittances have made positive impact on
image building of their families in the community, less than half (30%) were of the
48
opinion that money provided opportunities for higher education to their family
members. Some and an equal percentage (10% and 10%) mentioned that remittances
helped to find some work opportunities by buying livestock or opening shop and
helped them to migrate from rural to urban areas.
4.
India
4.1
Most (75%) of the respondents were sending part of their income home. One fourth
of respondents (25%) were between the age group of 18-25 years and three fourth
(75%) between 25-40 years. The marital status of the respondents indicates that less
than half (35%) were married and living with their families, whereas, more than half
(65%) were un-married. The respondents' education levels were also diversified and
were holding degrees like: PhD (30%), M. Phil (20%), Masters (35%) and
Engineering (15%).
4.2
The responses showed that 60% of the respondents possessed <5years, 35% and 5%
had 5-10 and 10-15 years of working experience respectively. The types of
organizations in which they were working showed that 45% were in the service
sector, 45% and 10% in the industrial and agriculture sectors respectively.
4.3
The responses showed that more than a quarter (30%) of the respondents were
running business, more than half (60%) got skilled jobs, and some (10%) were
studying on scholarships.
4.4
The field of education, which helped the respondents for better earnings, included
degrees in Engineering as responded by more than quarter (30%), while some (15%)
considered degree in Medicine, less than half (40%) of the respondents were of the
view that Business Management degree helped in more earnings, and some (15%)
supported the degree in Social Sciences
4.5
The main source of household income in the home country as responded by one fifth
(20% and 20%) of the respondents was agriculture and other sources, less than half
(45%) reported salaries/wages, and some (15%) families had no source of income,
except remittances.
49
4.6
Monthly income
In response to the amount of money earned by the respondents, more than a quarter
(30%) were earning > 2000US$, less than half (35%) were earning <500US$, some
(10%) between 1500-2000US$, few (5%) were earning between 1000-1500US$,
and one fifth (20%) between 500-1000 US$ per month.
4.7
Health profile is an important element in overall human resource development; in

this regard the study data revealed that most (85%) of the respondents were enjoying
good health during the last one year, whereas, remaining (15%) suffered from
illnesses.
4.8
Most (80%) of the respondents remained absent due to sickness for 7 days from the job,
whereas, some (10%) remained absent for >7 days and the same number (10%) between
7-30 working days and there was loss in their wages/ salaries during the last year.
4.9
The respondents used various modes for sending the money home as more than a
quarter (35%) and some (25%) of the respondents sent via bank to bank and money
transfer companies, less than a quarter (15%) used informal channels, some (10%,)
sent via post offices and few (5%, 5%, and 5%) of the respondents used credit unions,
ATM or debit card facility, and internet/online banking system.
4.10
The amount of money sent home by the respondents varied in amount, as less than
quarter (15%) were sending > 2000US$, some (10%) between 1500-2000US$, one
fifth (20%) between 1000-1500US$, some (5%) between 700-1000US$, same
percentage (5%) between 500-700US$, and less than half (45%) < 500US$ annually.
4.11
was > 2000US$ as reported by more than a quarter (35%), one fifth (20%) said 10001500US$, more than quarter (30%) replied 500-1000US$, and some (15%) of the
respondents sent < US$ 500 during the last year.
4.12
The responses indicate that more than a quarter (30%) of the respondents' families
were not well off as their earnings were meagre, therefore, the money was utilized to
supplement the daily household income, more than a quarter (35%) invested in
50
business, some (15%) constructed residential accommodation, and one fifth (20%)
of the respondents viewed that money was spent on education of their children.
4.13
The impact of remittances on the households of the respondents back home showed
that half (50%) of the respondents' families had access to better services, some (15%)
believed that remittances helped to build image in the community, and some (10%)
performed religious rituals, few (5%) had access to work opportunities through
livestock and shops etc. while same number (5%) have got opportunities for higher
education, and some (10%) contributed in charity.
5.
Maldives
5.1
Demographic Information
Most of the respondents (95%) were sending home a part of their income. Among the
respondents 20% were between 18-25 years and 80% were > 40 years of age. The
marital status showed that 90% were married and 70% were living with their
families. The respondents' education levels were diversified and they were holding
degrees like: PhD (30%), M. Phil (30%) and Masters (20%), Engineering (10%) and
Graduation (10%).
5.2
The responses showed that 50%, 20% and 30% had working experience of <5,
between 5-10 and 10-15 years respectively. The sector wise distribution of the
respondents showed that 60% were employed in the service sector, 30% in the
industrial sector and 10% were working in the agriculture sector.
5.3
Using their educational abilities, half (50%) of the respondents were running
business, less than half (40%) got skilled jobs, and some (10%) were studying on
scholarships abroad.
5.4
The field of education which helped the respondents to earn better were degrees in
Business Management as replied by less than half (40%), while more than quarter (30%)
related to degree in Engineering. One fifth (20%) were of the view that degrees in Social
Sciences helps to earn more and some (10%) attributed to degree in Medicine.
5.5
The main source of household income in the home country was agriculture as
responded by one fifth (20%) of the respondents, less than half (40%) reported
51
salaries/wages, more than quarter (30%) said that their families have some other
sources, and some (10%) of the respondents reported that their families had no source
of income, except remittances.
5.6
Monthly income
In response to the amount of money earned by the respondents, less than half (40%)
of the respondents were earning > 2000US$, an equal number (10% and 10%) were
earning between 1500-2000US$ and 1000-1500US$, equal and one fifth (20% and
20%) between 500-1000US$, and < 500US$ per month.
5.7
Health profile is a key component of HRD sector, most (80%) of the respondents
were not sick during the past 12 months, while remaining (20%) reported otherwise.
5.8
Absent from job due to illness
Most (70%) of the respondents were not absent from the job, whereas, some (10%)
remained absent due to illness for 7 days and remaining one fifth (20%) were absent
between 7-30 days during the last one year.
5.9
Various means were used by the respondents for sending the money home, half
(50%) of the respondents were using money transfer companies and more than
quarter (30%) were sending through credit unions, and an equal percentage (10% and
10%) were using internet/online banking and bank services.
5.10
The amount of money sent by the respondents also varied, as 20% were sending >
2000US$, 10% 1500-2000US$, 10% 700-1000US$, 30% between 500-700US$ and
30% were sending < 500US$ annually.
5.11
The amount of money sent by the respondents to their families during the last year by
most (80%) of the respondents was > 2000US$ and one fifth (20%) 1000-1500US$.
5.12
Among the respondents more than a quarter (30%) were of the opinion that their
families were not well off and their earnings were meagre, therefore, the money was
utilized to supplement the household income, the same number of respondents (30%)
52
believed that money has helped to improve the quality of children's education, and
equal numbers and less than a quarter (20% and 20%) responded that families have
invested in business and construction of house.
5.13
Remittances have made positive impact on the respondent's families as more than
half (60%) of the respondents were of the view that their families have access to
better services. Some (10%) reported that working opportunities have been availed
by purchasing cattle etc., some (10%) believed that families had better opportunities
for higher education and less than a quarter (20%) agreed for better social status in the
community.
6.
Nepal
6.1
Majority (95%) of the respondents were sending home a part of their income. Among
the respondents 32% were between 18-25 years, 63% between 25-40 years, and 5%
were >40 years of age. The marital status showed that 68% of the respondents were
married and 26% were living with their families. The education level of the
respondents were diversified and they were holding degrees like: PhD (5%), Masters
(16%), Engineering (42%), Medicine (26%), Graduation (5%), and (6%) Diplomas
and Certificates.
6.2
The responses showed that 84%, 11%, and 5% of the respondents had working
experience of <5, 5-10 years, and 10-15 years respectively. The sector wise
employment / distribution of the respondents showed that 63% were employed in the
service sector, 37% in the industrial sector and no respondents were working in the
agriculture sector.
6.3
Using their educational abilities, less than half (42%) of the respondents were
studying on scholarships abroad.
6.4
The field of education which helped the respondents to earn better were degrees in
Business Management as replied by more than a quarter (37%), while a quarter
(26%) related to Engineering degree. About one fifth (21%) was of the view that
degree in Medicine and some (16%) attributed to the degree in Social Sciences.
53
6.5
The main source of the respondents household income in the home country was
agriculture as responded by some (16%) of the respondents, more than a quarter
(31%) reported salaries/wages, some (16%) said that their families have some other
sources of income, and more than a quarter (37%) reported that their families had no
source of income, except remittances.
6.6
Monthly income
In response to the amount of money earned by the respondents, more than half (68%)
of the respondents were earning >2000US$, less than quarter (22%) between 15002000US$, some and equal numbers (5% and 5%) between 1000-1500US$ and <
500US$.
6.7
Most (79%) of the respondents were not sick during the past 12 months, while
remaining (21%) reported otherwise.
6.8
Absent from job due to illness
Most (74%) of the respondents were not absent from the job, whereas, some (10%)
remained absent due to illness for 7 working days, and some (16%) were absent
between 7-30 days.
6.9
Different means were used by the respondents for sending the money home, most
(79%) of the respondents were using money transfer companies, some (5%) were
using bank services, some (5%) were using informal channels, and remaining (11%)
were using credit unions to send money home.
6.10
The amount of money sent by the respondents in the home countries also varied, as
11% were sending > 2000US$, 5% between 1500-2000US$, 700-1000US$, 26%
500-700US$, and 53% < 500US$.
6.11
more than quarter (32%) was > 2000US$, about quarter (26%) 1000-1500US$, some
(16%) 500-1000US$, and (26%) < 500US$.
54
6.12
Among the respondents about one fifth (21%) were of the opinion that their families
were not well off and their earnings were inadequate, therefore, the money was utilized
to supplement the household income, some (16% and 12%) responded that their
families invested in businesses and constructed residential accommodation, almost
half (47%) said that their families utilized on children's education, and a few (4%)
spent on purchase of durable goods like: refrigerators, cars, motorcycles, TVs etc.
6.13
Remittances have made positive impact on respondents' families as some (11%) of

the respondents reported that working opportunities have been availed by buying
livestock, small shops etc. Some (16%) attributed with better opportunities for
higher education, less than a quarter (20%) were of the opinion that remittances
helped in improving image building in the community, and more than half (53%)
were of the opinion that their families have access to better services.
7.
Pakistan
7.1
Most (85%) of the respondents were sending part of their income home. Some (8%)
of the respondents belonged to the age group of 18-25 years, 69% between 25-40
years and 23% of the respondents were > 40 years. The marital status of the
respondents indicates that more than half (54%) were married. Majority (77%) were
living with their families abroad. The respondents' education levels were diversified
and they were holding degrees like: PhD (12%), M. Phil (19%), Masters (53%),
Engineering (4%) and Graduation (12%).
7.2
The responses revealed that 84% of the respondents possessed <5 years, 11% and 5%
had 5-10 and 10-15 years of working experience respectively. The types of
organizations in which they were working showed that 50% were in the service
sector, 35% and 15% in the industrial and agricultures sectors respectively.
7.3
The responses showed that less than half (38%) of the respondents were running
business, more than half (54%) got skilled jobs, and some (8%) were studying on
scholarships.
7.4
The field of education which helped the respondents for better earning included
degrees like Engineering as responded by some (19%) respondents, less than quarter
55
(23%) were of the view that degree in Vocational Education helped in more earning,
more than quarter (27%) supported Business Management degree, less than quarter
(23%) were of the opinion that degree in Social Sciences, and some (8%) attributed to
degree in Medicine.
7.5
The main source of household income in the home country as responded by less than
quarter (19%) of the respondents was agriculture, more than one quarter (35% and
27%) reported other sources and salaries/wages, whereas, some (19%) families had
now source of income, except remittances.
7.6
Monthly income
The amount of money earned by the respondents varied as almost half (46%) were
earning > 2000US$, less than a quarter (23%) 1500-2000US$, some (15%) 10001500US$, some (12%) 500-1000US$, and few (4%) < 500US$ per month.
7.7
The study data revealed that most (81%) of the respondents were enjoying good
health during the last one year, whereas, remaining (19%) suffered from illnesses.
7.8
Most (76%) of the respondents were not absent from the job, some (12% and 12%)
were absent due to illness for 7 working days and between 7-30 days.
7.9
Different means were used by the respondents for sending the money home, more
than quarter (30%) of the respondents were using the bank services, less than quarter
(23% and 23%) preferred formal money transfer companies and internet/online
banking. Equal percentage (12% and 12%) was sending via credit unions and ATM or
debit card.
7.10
The amount of money sent by the respondents also varied, as 46% were sending >
2000US$, 8% 1500-2000US$, 15% 1000-1500US$, 30% 500-700US$, 19% 7001000US$ and 12% were sending < 500 US$ per year.
7.11
47% were > 2000US$, 15% 1000-1500US$, 23% 500-1000US$, and some (15%) <
500US$.
56
7.12
Among the respondents less than a quarter (19%) reported that their families were
not well off and their earnings were meagre, therefore, the money was utilized to
supplement the household income, almost a quarter (23% and 15%) of the
respondents stated that families have invested in businesses, and constructed of
houses, more than a quarter (38%) believed that money helped to improve the quality
of children's education, and few (5%) were of the view that their families have spent
on purchasing durable goods like: refrigerators, cars, motorcycles, TVs etc.
7.13
Remittances have made positive impact on respondents' families as more than half
(54%) of the respondents viewed that their families have access to better services,
some (15%) believed that families had better opportunities for higher education,
some (12%) spent on charity, remaining (8%, 7% and 4%) performed religious
rituals, invested to find work opportunities, and improvement in image of their
families.
8.
Sri Lanka
8.1
Most of the respondents (82%) were sending a part of their income back home.
Among the respondents 9% were between 18-25 years, 73% were between 25-40
years and 18% were >40 years of age. The marital status showed that 64% were
married, and 73% were living with their families abroad. The respondents' education
levels were diversified and they were holding degrees like: M. Phil (10%), Masters
(46%), Engineering (9%), Medicine (9%), and Graduation (27%).
8.2
The responses showed that 36%, 18%, 36% and 10% had working experience of <5
years, 5-10 years, 10-15 years, and >15 years. The sector wise distribution of the
respondent's employment showed that 36% were working in the service sector, 55%
in the industrial sector and 9% were working in the agriculture sector.
8.3
Using their educational abilities, more than quarter (36%) of the respondents were
studying on scholarships abroad.
8.4
The field of education which helped the respondents to earn better included degrees
in Engineering and Social Sciences as replied by more than quarter (27% and 27%),
57
some (9% and 9%) attributed to degree in Medicine and Business Management, and
no response were received from 28%.
8.5
Source of income in home country
The main source of household income in the home country was agriculture as
responded by some (18%) of the respondents, less than half (45%) reported
salaries/wages, more than quarter (28%) said that their families have some other
sources, and some (9%) of the respondents reported that their families had no source
of income except remittances.
8.6
Monthly income
Most (73%) of the respondents were earning > 2000US$, less than quarter (18%)
between 1500-2000US$, while some (9%) were earning < 500-1000US$ per month.
8.7
Most (82%) of the respondents were not sick during the past 12 months, while
remaining (18%) reported otherwise.
8.8
Most (73%) of the respondents were not absent from job, whereas, some (9%)
remained absent due to illness for 7 working days, and some (18%) were absent
between 15-30 days.
8.9
Different means were used by the respondents for sending the money home, 36% of
the respondents were using money transfer companies, some (18%) used bank
services, some (9%, 9% and 9%) used internet/online banking, post offices services,
and ATM or debit card facility, whereas, remaining 18% used informal money
channels.
8.10
The amount of money sent by the respondents in the home countries also varied, as
36% were sending > 2000US$, an equal numbers (18%, 18%, and 18%) sent between
1500-2000US$, < 500US$ and between 700-1000US$, and10% sent between 10001500US$ per year.
8.11
The amount of money sent by the respondents to their families back home during the
last year by more than quarter (36%) were > 2000US$, less than half (46%) 10001500US$, and some (18%) 500-1000US$.
58
8.12
Use of remittances in home country
Less than (37%) of the respondents viewed that their families invested in businesses,
more than a quarter (27%) responded that their families used on children's education,
some (18%) were of the opinion that their families were not well off and their
earnings were inadequate, therefore, the money was utilized to supplement the
household income. Less than quarter (18%) stated that their families used the money
in construction of residential accommodation.
8.13
Remittances have made positive impact on respondents' families as more than a

quarter (27%) of the responses revealed that it had provided opportunities for higher
education, less than quarter (18%) were of the opinion that remittances helped in
improving image building in the community, some (9%) of the families migrated to
cities, and less than half (46%) spent on charity, which was not possible earlier.
Part II. Regional Scenario of SAARC Member States
9.1
The result of the study indicates similar trends in the SAARC member states as most
(88%) of the respondents working abroad were sending a part of their income back
home. More than half (72%) were living with their families abroad. The age groups
in which the respondents fall were 18-25 years (15%), 25-40 years (59%) and >40
years (26%). The marital status showed that 61% of the respondents were married.
Their education level was also diversified; they were holding degrees like: PhD
(12%), M. Phil (11%), Masters (38%), Medicine (9%), Engineering (16%),
Graduation (5%), and other education (9%).
Pradhan (2008) conducted a study in 36 countries including South Asia; the results
established an important connection of remittances with human resource
development, and its ultimate impact on poverty reduction. The study concludes that
good education has a positive impact on migration and ultimately towards increase
inflow of remittances due to higher stream of earning opportunities abroad. It also
shows a long run impact in reducing poverty, improving social conditions,
opportunities, balance of payments and economic growth in the native countries.
59
Figure 8.1: Educational Level of Respondents in the SAARC Memeber States

40
(Percentage)
35
30
PhD
25
M Phil
Masters
20
Medicine
15
Engineering
10
Graduation
Others
5
0
(Level of education)
9.2
As evident from results of the study the respondents had diversified working
experience in the SAARC region. Less than half (42%) of the respondents had <5
years of experience, less than quarter (23%) possess 5-10 years, one fifth (20%) had
10-15 years and some (15%) had >15 years of working experience. The
organizations in which they were working include: service sector (54%), industrial
sector (29%) and agriculture sector (17%) as shown in figure 9.2.
Figure 8.2:
Type of organizations
Services
54%
Industry
29%
17%
60
Agriculture
9.3
The results revealed that less than half (45%) of the respondents were doing skilled
jobs, almost one quarter (24%) were running their own business, some (18%) got
scholarships, and few (13%) were doing other jobs of taxi drivers, security guards
etc. Most (70%) of the respondents from Bhutan were running their business and
more than half (60%) of the respondents from India were doing skilled jobs abroad.
Sward and Rao (2009) explored the link between migration and education across the
four villages in India and Bangladesh. The results showed that education helped in
mobilization of local villagers to avail better job opportunities. It was also
recommended that there is need to expand programs to improve schooling in the rural
areas, particularly the school facilities, teachers training, and scholarships for
children belonging to poor households.
Figure 8.3:
Use of education
50
45
(Percentage)
40
35
Skilled jobs
30
Business
25
Scholarships
20
Others
15
10
5
0
9.4
(Professions)
More than a quarter (27%) of the respondents were of the view that education in the
field of Social Sciences help in better earnings, one fifth (20%) responded Business
Management, less than one fifth (19% and 18%) thought that vocational education
and engineering support better earnings respectively, and some (16%) were of the
opinion that professionals having medical degree earn more.
The results from Afghanistan showed that more than half (60%) of the respondents
were earning due to Vocational Education. Less than half (40% and 40%) of the
respondents from India and Maldives were earning more due to education in
Business Management.
61
9.5
Less than half (36%) of the respondents shared their views that main source of
earnings of the households in their native countries were salaries/wages, less than a
quarter (18%) supported agriculture, some (16%) of the respondents said that there
was no source of income, and more than a quarter (30%) responded some other
sources.
Salaries/wages was the most common source of income of the households as evident
from (45%, 45% and 31%) of responses from India, Sri Lanka and Bangladesh.
After salaries the second major source of household's income in the SAARC region
was due to agriculture which ranged from 10% to 21%. The lowest figure (10%) was
from Bhutan and highest (21%) from Bangladesh.
Brauw et al. (2001) said that migration has a negative effect on household cropping
income. However, they provided evidence that the remittances sent home by
migrants partially compensate for lost-labor, contributing to household incomes
directly and also indirectly by stimulating crop and possibly self-employment
production.
9.6
Monthly income
More than half (54%) of the respondents were earning > 2000US$, some (12% and
10%) were earning between 1501-2000US$ and between 1001-1500US$
respectively, few (11%) were earning between 500-1000US$, while remaining
(13%) of the respondents were earning < 500US$ per month.
Figure 8.4: Monthly income of respondents
60
(Percentage)
50
40
< 500
500-1000
30
1001-1500
1501-2000
20
> 2000
10
0
(Income USD)
62
9.7
The overall regional data showed that most of the respondents (87%) working abroad
were enjoying good health during the past 12 months, and some (13%) suffered from
illnesses.
Ernesto (2006) stated that health standards play an important role in enhancing the
potential productivity of labor, and allows them to compete more efficiently while
serving abroad. The main HRD and socio-economic indicators which influence the
flow of remittances includes: health, education, business environment and
immigrant's living standard in their native country.
Figure 8.5: Respondents illnesses
87%
Yes
No
13%
9.8
Discussing the number of days being absent from job during the last year, the results
indicated that some (6%) of the respondents remained absent from duty for <7 days
and (4%) between 7-15 days. Some (5%) remained absent between 15-30 days
during the last year and there was loss in their wages. Most of the respondents (85%)
had not suffered from illness and therefore, there no loss in their wages/salaries.
These figures correlate with the above mentioned findings which reflect the better
health status of the respondents.
9.9 Modes of remittances
In the region inflow of remitances through official channels have gradually
increased. This is attributable to advancments in the banking sector that have taken
place in most of the South Asian countries. The resondents used different channels
for sending money home as less than half (38%) preferred money transfer companies
and less than a quarter (21%) used bank to bank transfer services. An equal number
63
(13% and 13%) were utilizing internet/online banking and credit unions, some (9%)
were using ATM/ debit card facility, and few (3% and 3%) were utilizing the post
offices and informal channels.
Figure 8.6: Absence from job due to illness
90
80
(Percentage)
70
60
Not sick
50
<7
40
7-15
15-30
30
20
10
0
(Number of days)
The use of formal channels have increased for sending the remittances as reported
by Gonzaga (2007) due to faster delivery systems of the commercial banks' and
wider choice of remittance centers. The figures in 2005 indicate that only 13 percent
of total remittances were sent through in-formal channels as compared to 25 percent
in 2001. These findings are in line with results of the present study.
Figure 8.7: Modes of remittances
40
(Percentage)
35
30
Money transfer Co.
25
Banks
Credit unions
20
Online banking
15
ATM
10
Post offices
Informal channels
(Modes of remittances)
64
9.10
The amount of money sent by the respondents back home annually varied, about
quarter (24%) of the respondents were sending > 2000US$, some (13% and 15%)
1501-2000US$ and 1001-1500US$, some (17% and 13%) 701-1000US$ and 500700US$, and less than one fifth (18%) were sending < 500 US$ per year.
Figure 8.8: Amount of remittances
(Ppercentage)
30
25
< 500
20
500-700
15
701-1000
10
1001-1500
1501-2000
> 2000
(Remittances inflow USD)
9.11
showed that less than half (37%) had sent > 2000US$, about a quarter (24%) between
1001-1500US$, more than one fifth (21%) of the respondents sent 500-1000US$,
and less than one fifth (18%) transmitted < 500US$.
9.12
Use of remittances in home country
The present findings of the SAARC region indicates that more than half (56%) of the
families were not well off, as their earnings were meagre, therefore, the money sent
by the respondents was utilized to supplement the daily households income, Some
(10%) families invested the money in business, some (10%) families used
remittances for construction of residential property, Less than quarter (15%) utilized
this money to enhance quality of education of their children, and few (9%) families
spent the money on purchase of durable goods like: refrigerators, cars, motorcycles,
TVs etc. Figure 9.9 shows the comparative figures.
The individual countries data showed a significant number of respondents (50%)
families were not well off in Afghanistan and their earnings were meagre, therefore,
the remittances were utilized to supplement the household income. Situation was
65
better in India, as less than half (35%) of the families were investing that money in
businesses. In Nepal less than half (47%) were spending money on children
education. In Bangladesh, about quarter (23%) of the families spent the remittances
on purchase of durable goods like; refrigerators, cars, motorcycles, TVs etc.
Doorn (2002) studied the use of remittances and it was observed that a large portion
of these remittances are being used to meet the daily expenses such as food, clothing
and health care. Money is also spent on building or improving housing conditions,
buying land, cattle or durable consumer goods and the payment of loans for
migration. In general only a small percentage of remittances are used for savings,
education and productive investments. Despite the small percentages of these
investments, they still add up to large amounts in absolute terms, due to the huge size
of total remittance transfers. These results are also similar to the outcome of the
present study
Figure 8.9: Uses of remittances - home country
60
(Percentage)
50
HH income
40
Education
Construction
30
Business
20
Goods
10
0
(Utilization of remittances)
9.13
Remittances had showed positive impact on the families of the respondents as some
(10%) families found some work opportunities by buying livestock, small shops etc.
Few (6%) reported that remittances have provided opportunities for higher
education, some (11%) were of the opinion that remittances helped in building image
in their communities. More than half (55%) families had gained access to better
services, few (3%) performed religious rituals, few (5%) migrated to cities, some
(8%) spent on charity, and few (2%) mentioned some other reasons.
Considerable number of respondents from Afghanistan and Bhutan (30% and 30%)
responded that remittances have provided better opportunities for higher education
66
in their home countries. In Afghanistan some (10%) of the families performed

religious rituals like Hajj etc. In Bangladesh (15%) some families migrated from
village to urban areas. More than half (60%) of the respondents families secured
access to better services in Maldives. Half (50%) of the families from Bhutan used
remittances in image building.
Figure 8.10: Impact of remittances
60
Better services
(Percentage)
50
Image building
40
Work opportunity
Charity
30
Higher education
20
Migration to cities
10
Religious rituals
Others
(Impact of remittances)
Remittances have been known to spur development and also act in a counter cyclic
manner during the times of economic crises. The remittance inflows are in fact nondebt creating instrument which are safety nets managed by families and communities
(Brown 2006)
The study findings indicate that South Asian Diaspora recognizes that education and
skills endowment play an important role in securing job opportunities in the foreign
countries. Furthermore, there was a realization (as suggested by evidence in the
survey) that migration should not be viewed as a brain drain. Rather the governments
in the SAARC region should frame public policies to facilitate easy mobility of
labour inside and outside the region, in order to strengthen what many migrants
termed as 'brain circulation.' This is because the migrants had contributed to the
welfare of their households and countries by working abroad in a manner which is
higher in magnitude and more versatile if compared to their contribution while they
were in their home countries.
Conclusion
In light of the findings it is evident that there similar situation is prevailing across the
region and remittances are playing a vital role in welfare of the remitters families.
Simultaneously, the steady flow of remittances has also helped the countries easing
the foreign exchange constraints, balance of payments, and increases the supply of
national savings. Remittances also contributed to the countries' development budget.
67
One of the issues in these countries is a high volume of money transfer through
informal channels. The economies of the governments of South Asian countries
depends on remittances, therefore, various measures were adopted for improvement
and formal inflow of remittances. The measures included: exchange rate
liberalisation, creating a special remittance unit at the central banks, improve
licensing to money transfer agencies, and encouraging domestic banks to have
partnership with foreign banks in other countries, where there are high
concentrations of migrant workers. The governments also became proactive to
support migrant workers and their families' investments in small businesses and
income generating activities for employment generation.
68
9.
Conclusion and Policy Recommendations
This study has tried to document linkages between HRD and remittance growth in
general and particularly for South Asia. The results of our qualitative and quantitative
exercises suggest that increased stock and quality of HR leads to growth in
remittances which in turns help developing economies in augmenting the balance of
payments needs. We have also explained in detail the various channels through which
HRD promotes migration and remittances and a case has been made not to consider
this process as brain drain rather it should be viewed by public policy practitioners as
brain circulation which can in turn result not only in increased foreign exchange
reserves but also increased prospects for transfer of technology and ideas.
The main transmission mechanism here is that higher levels of education, improved
health and nutrition ultimately imply a more productive workforce. Strategies for
promotion of HRD which include education and health policies, active labour
market strategies and skill development initiatives facilitate mobility of labour
which is by far the most important element towards realization of personal freedom
and aspirations.
Going forward and in order to help the vast number of poor living in this region,
South Asian governments must deliver on the promises they have established
towards MDGs. Several of these goals address a common objective i.e. improvement
in HRD. This report has shown that despite of rising economic growth in South Asia
and to some extend improvement in social sector indicators, this region is far behind
in terms of global indicators in productivity and competitiveness.
Given the youth bulge in the region, most countries will see a faster growth in labour
market entrants. The growth in domestic economy will not be enough to absorb the
growing stock of labour force. This implies that South Asian workers will have to
compete with global workforce in order get placements abroad.
We have also highlighted the prospects for a regional approach towards
improvement in HRD. South Asia is producing home grown solutions to local
predicaments which need to be shared across the region. Initiatives such as South
Asia University and SAARC Human Resource Development Center should be
promoted and strengthened. The region currently has low levels of intra-regional
movement of labour which needs to be addressed. Even small measures such as
liberalization of visa regime in South Asia can enhance connectivity between people
and places. Cross-border skill development initiatives can greatly reduce the cost
and increase the knowledge about occupational opportunities.
South Asia also needs a collective voice when it comes to negotiating movement of
labour and rights of migrants abroad. Currently workers from this region are living in
foreign countries under a constant fear of harassment from foreign entry and exit
regulations. Most of these workers are not fully aware about their rights and
entitlements. Such a regime can only be changed through a collective intent and
voice. These issues must be taken up on priority in the next SAARC summit due to be
held in Nepal. The civil society and related stakeholders will also have to play a proactive role in order to mount the pressure on national governments to promote the
basic rights of workers and facilitate their internal and external movements.
69
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72
Annex-I:
Questionnaire
1.
Personal Information
1.1
Name:
Email:
1.2
Occupation in foreign country:
Age:
1.3
Country of origin
Afghanistan
Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka
1.4
Marital status
Married
1.5
Living with family Yes
1.6
Education (highest degree)

PhD
M. Phil
Masters
No
Medical Doctor
Engineering
Graduation
2.
Professional Information
a.
Work experience (years):
Bachelor
F.A/F.Sc./A level
Matric
Primary
Never attended school
Others (e.g. vocational and skill training)
Native country:
b.
Abroad:
Which sector your company belongs to? (tick one from below)
Agriculture
Industry
Services
3.
How education has helped you in finding the job abroad?

Skilled job
Better scholarship opportunity
Running business
Others (please specify)
4.
In which field of education has helped you to earn more?

Engineering
Social Sciences
Vocational Education
Medicine
Business Management
Others (please specify):
What is your household income in home country other than remittances?

No source
Agriculture
Salaries/wages
Other sources (specify)
6.
What is your monthly income in this country

?
7.
During the last year, have you suffered from any
8.
No. of days ab sent from job due to your sickness

in last year?
Yes
No
73
9.
Do you send money to home country?

Yes
No
If No, why?
If yes, How do you send your remittances?
Money transfer companies
ATM or debit card facility
Internet/On line banking
Post offices
Commercial banks
Any informal channel
Credit unions
10.
Amount of annual income sent as remittance to back home?

Less than $500
$1001-$1500
$500-$700
$701-$1000
$1501-$2000
More than $2000
11.
Amount of annual income you sent last year (in foreign currency):
12.
How remittances facilitate your family? (Tick more than one option if applicable)
Supplementing household income
Investment in business
Construction of house or shop
Durables (refrigerator, car, motorcycle, TV etc.)
Education of children
Others (Please specify):
13.
Has the remittances impacted the welfare of your home country? (Identify)
Find work opportunities
Higher education opportunities
Image building
Performing religious rituals
74
Migration to city
Securing better services
Sending sadaqat/charity
Other (please specify)
Annex-II:
Datasets used in econometric analysis
Table A-I:
Bangladesh
Credit
Mortality
to
rate,
School
School
School
GDP per Private
Remittances under -5 enrollment, enrollment, enrollment,
capita
sector
(as % of
(per
primary
secondary tertiary (% (constant
%
Years
GDP)
1,000)
(% gross)
(% gross)
gross)
LCU)
GDP
1972
0.2
231.1
60.9
18.1
2.0
9152.0
2.3
1973
0.2
231.1
71.9
18.1
2.0
9206.9
1.8
1974
0.2
231.1
69.5
17.4
2.5
9822.7
1.2
1975
0.2
231.1
72.7
16.8
2.3
9171.0
0.8
1976
0.2
225.6
73.3
16.1
2.1
9433.0
1.9
1977
0.8
220.1
67.5
16.0
2.3
9428.5
2.5
1978
0.9
214.5
65.4
16.0
1.9
9828.4
2.1
1979
1.1
209.0
63.5
15.9
2.8
10027.9
2.3
1980
1.9
203.5
61.7
17.5
2.8
9842.9
2.6
1981
1.9
195.8
60.1
15.4
2.8
9947.6
3.0
1982
2.9
188.1
61.3
15.4
3.4
9916.7
3.6
1983
3.7
180.5
62.3
18.4
4.3
10047.5
4.6
1984
2.5
172.8
61.3
18.8
4.7
10299.3
5.2
1985
2.3
165.1
59.7
18.3
4.8
10367.8
5.6
1986
2.7
161.6
59.5
17.8
4.7
10547.7
6.2
1987
3.1
158.1
58.7
18.0
4.1
10684.5
6.3
3.0
1988
154.5
69.1
17.8
3.5
10665.7
6.6
1989
2.8
151.0
69.1
17.6
3.5
10700.7
7.8
1990
2.6
147.5
72.0
18.0
3.9
11090.3
7.5
1991
2.5
141.8
73.4
21.0
4.0
11218.4
7.4
1992
2.9
136.1
74.9
24.1
4.1
11541.0
7.7
1993
3.0
130.5
76.3
27.1
4.2
11825.9
7.9
1994
3.4
124.8
77.8
30.2
4.3
12065.0
8.5
1995
3.2
119.1
79.2
33.2
4.5
12411.6
10.7
1996
3.3
113.2
80.7
36.3
4.6
12734.4
11.7
1997
3.6
107.3
82.1
39.3
4.7
13164.7
12.8
1998
3.6
101.4
83.6
39.3
4.8
13593.1
13.7
1999
4.0
95.5
85.0
42.4
4.9
13992.8
15.3
2000
4.2
89.6
86.5
44.0
4.9
14557.9
17.2
2001
4.5
84.9
87.9
45.4
5.7
15056.0
25.8
2002
6.0
80.2
89.4
46.8
5.5
15450.3
29.0
2003
6.1
75.6
90.8
46.9
5.5
15989.9
28.7
2004
6.3
70.9
92.3
43.9
5.1
16716.9
30.5
2005
7.2
66.2
93.7
42.9
5.6
17435.4
33.8
2006
8.8
62.3
94.5
43.4
6.5
18311.3
39.0
2007
9.6
58.7
93.8
44.1
7.0
19205.5
40.2
2008
11.2
55.2
91.9
42.3
7.5
20107.9
40.7
2009
11.8
52.0
95.1
42.3
7.9
20971.2
41.5
75
Table A-II:
India
Years
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Remittances
(as % of
GDP)
0.2
0.2
0.3
0.4
0.6
0.8
0.9
1.0
1.5
1.2
1.3
1.2
1.1
1.1
0.9
1.0
0.8
0.9
0.8
1.2
1.2
1.3
1.8
1.7
2.3
2.5
2.3
2.5
2.8
3.0
3.1
3.5
2.6
2.7
3.0
3.0
2008
2009
4.1
3.6
Credit
Mortality
to
rate,
School
School
School
GDP per Private
under -5 enrollment, enrollment, enrollment,
capita
sector
(per
primary
%
1,000)
(% gross)
(% gross)
gross)
LCU)
GDP
164.3
79.9
24.0
5.0
11365.6
2.1
164.3
83.3
24.5
5.0
11480.6
2.1
164.3
82.8
24.0
5.0
11356.6
2.1
164.3
83.5
25.5
4.9
12116.2
2.5
161.22
83.1
25.8
4.9
12038.7
2.8
158.14
85.8
26.5
4.8
12620.9
2.7
155.06
82.2
26.9
4.9
13040.7
2.8
151.98
82.1
28.0
4.9
12080.4
3.0
148.9
83.6
29.1
5.0
12607.8
3.0
146.12
85.0
30.6
5.3
13069.7
3.5
143.34
85.7
32.1
5.0
13228.9
4.1
140.56
87.5
34.2
5.6
13891.9
4.4
137.78
88.9
35.6
5.9
14122.8
5.5
135.00
88.4
36.7
5.9
14561.6
5.9
131.64
90.1
37.8
6.1
14929.2
6.5
128.28
88.0
37.3
6.4
15193.8
6.7
124.92
89.6
37.4
5.6
16312.7
7.4
121.56
93.1
37.4
5.8
16931.6
8.8
118.2
93.0
39.4
6.0
17510.6
9.2
116.04
93.2
41.5
6.1
17349.4
12.5
113.88
94.0
43.5
6.0
17962.5
15.3
111.72
96.1
45.5
5.9
18473.4
15.5
109.56
97.3
46.0
5.7
19350.5
14.9
107.4
96.7
45.9
5.6
20447.1
14.8
104.46
96.0
46.0
6.3
21608.0
16.2
101.52
95.2
46.8
6.6
22095.9
17.1
98.58
92.5
45.5
7.6
23064.2
19.6
95.64
93.1
44.2
8.6
24350.7
21.3
92.7
94.1
46.2
9.6
24910.5
24.2
89.46
93.5
46.4
9.8
25789.9
26.1
86.22
94.0
48.1
10.4
26348.8
28.5
82.98
102.0
50.4
10.9
28131.7
26.4
79.74
110.4
51.9
11.3
30028.2
25.9
76.5
112.3
54.2
11.0
32380.8
25.8
73.6
112.3
54.8
11.8
34897.6
27.5
70.8
113.1
57.0
13.5
37813.2
24.4
68.2
65.6
76
116.9
116.9
60.0
60.0
9.6
5.8
39150.0
42145.9
31.3
33.0
Table A-III:
Pakistan
Credit
Mortality
to
rate,
School
School
School
GDP per Private
Remittances under -5 enrollment, enrollment, enrollment,
capita
sector
(as % of
(per
primary
%
Years
GDP)
1,000)
(% gross)
(% gross)
gross)
LCU)
GDP
1972
3.1
162.5
46.4
16.1
1.9
14033.1
3.3
1973
3.1
162.5
46.4
16.8
1.9
14552.4
5.2
1974
3.1
162.5
46.4
17.1
1.9
14594.3
3.6
1975
3.1
162.5
46.4
18.1
1.9
14733.7
3.7
1976
3.1
160.7
45.0
17.9
2.0
15013.1
4.1
1977
5.8
158.9
43.6
17.9
2.1
15126.8
4.4
1978
7.3
157.1
42.2
17.8
2.2
15850.5
4.6
1979
7.6
155.3
40.8
16.2
2.2
15960.8
5.0
1980
8.6
153.5
39.4
16.5
2.2
17086.1
4.8
1981
7.4
150.9
40.5
16.4
2.3
17926.8
4.6
1982
8.4
148.3
41.5
16.3
2.4
18587.6
5.2
1983
10.2
145.7
42.6
16.9
2.5
19318.2
6.4
1984
8.3
143.1
43.6
17.4
2.6
19757.3
6.7
1985
8.1
140.5
44.7
18.0
2.7
20694.4
7.9
1986
7.7
138.48
45.3
18.1
2.9
21259.0
9.0
1987
6.5
136.46
45.9
18.4
2.8
22042.2
9.9
1988
4.9
134.44
46.6
18.7
3.1
23106.0
9.3
1989
5.0
132.42
47.2
19.4
3.1
23642.1
9.8
1990
5.0
130.4
47.8
20.1
3.1
24077.4
10.9
1991
3.4
128.58
55.1
23.2
3.1
24662.2
11.4
1992
3.2
126.76
62.3
26.1
3.0
25905.0
13.9
1993
2.8
124.94
69.6
26.2
3.0
25707.8
14.2
1994
3.4
123.12
73.8
26.3
2.9
26008.0
15.5
1995
2.8
121.3
68.5
26.3
2.9
26635.5
15.7
1996
2.0
118.58
69.3
26.4
2.8
27250.6
18.2
1997
2.7
115.86
69.3
26.5
2.8
26874.0
20.3
1998
1.9
113.14
69.3
26.6
2.7
26904.9
22.2
1999
1.6
110.42
69.3
26.6
2.7
27225.9
22.9
2000
1.5
107.7
69.3
26.7
2.6
27709.4
21.5
2001
2.0
105.28
70.1
26.8
2.6
27585.4
22.2
2002
4.9
102.86
71.1
26.9
2.5
27796.5
22.9
2003
4.8
100.44
73.7
26.8
2.5
28449.3
22.2
2004
4.0
98.02
78.5
29.9
3.1
29817.9
24.8
2005
3.9
95.6
83.0
28.8
4.5
31339.4
27.6
2006
4.0
93.4
79.5
30.0
4.6
32570.1
27.2
2007
4.2
91.2
84.8
32.4
5.2
33691.6
29.3
2008
4.3
89.1
84.8
32.9
5.2
33503.9
33.3
2009
5.4
87.0
85.1
33.1
6.4
33985.0
38.1
77
Table A-IV:
Sri Lanka
Years
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Remittances
(as % of
GDP)
0.2
0.2
0.2
0.2
0.4
0.5
1.4
1.8
3.8
5.2
6.1
5.7
5.0
4.9
5.1
5.2
5.1
5.1
5.0
4.9
5.6
6.1
6.1
6.2
6.1
6.2
6.5
6.8
7.1
7.5
7.7
7.6
7.7
8.2
7.7
7.8
2008
2009
7.2
8.0
Credit
Mortality
to
rate,
School
School
School
GDP per Private
under -5 enrollment, enrollment, enrollment,
capita
sector
(per
primary
%
1,000)
(% gross)
(% gross)
gross)
LCU)
GDP
64.0
94.7
53.2
1.1
32465.9
1.8
64.0
92.0
53.4
1.1
34057.2
1.6
64.0
86.9
52.0
1.1
34672.6
1.5
64.0
84.2
50.4
1.1
36090.0
1.5
60.48
83.8
48.7
1.1
36590.7
2.1
56.96
88.8
50.2
1.5
37748.7
2.6
53.44
93.0
51.7
1.9
39172.7
4.8
49.92
95.4
53.2
2.3
40974.6
5.5
46.4
98.5
54.7
2.8
42677.7
8.3
43.88
100.0
55.5
2.8
44437.8
9.4
41.36
99.2
56.1
2.9
45630.9
10.5
38.84
98.5
58.1
3.7
47187.4
11.2
36.32
98.8
60.0
4.1
48938.7
9.4
33.8
100.3
61.2
4.2
50701.8
11.3
32.72
102.2
63.3
3.8
52198.2
11.6
31.64
107.0
67.7
3.9
52382.6
12.7
30.56
109.2
69.1
3.4
52959.1
15.5
29.48
110.9
70.4
3.0
53467.6
14.7
28.40
111.5
71.6
3.1
56170.9
15.2
27.74
112.8
71.7
3.2
58039.6
10.3
27.08
111.8
73.7
3.3
59883.8
16.0
26.42
111.5
75.2
3.8
63305.6
15.6
25.76
110.6
77.2
4.3
66162.4
16.1
25.1
112.4
77.2
4.7
69146.7
21.0
24.22
106.5
78.3
4.7
71168.3
21.4
23.34
105.5
79.5
4.7
75153.7
21.7
22.46
104.5
80.6
4.7
78152.5
23.6
21.58
105.5
81.7
4.7
81019.1
27.7
20.7
106.5
82.8
4.7
85410.5
33.7
19.98
107.5
84.0
4.7
83718.0
40.6
19.26
111.2
85.1
4.7
86466.7
40.4
18.54
111.4
85.3
4.7
90399.1
39.3
17.82
108.5
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4.7
93905.9
43.8
17.1
111.0
87.0
4.7
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43.9
16.5
107.8
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4.7 105126.6
49.0
15.9
105.1
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4.7 111577.0
49.8
15.3
14.7
78
101.4
96.9
87.0
87.0
4.7
4.7
117358.4
120634.7
46.4
45.6

Impact of Remittances On HRD

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Impact of Remittances On HRD

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Impact of HRD on

Foreign Remittances in South Asia

SAARC Human Resource Development Centre

Global Research Insight for Development (GRID)

SAARC Human Resource Development Centre

Dr. Vaqar Ahmed

South Asia: Macroeconomic Indicators

South Asian GDP Growth 1961-2010

Asian Development Bank

Introduction and Background

Socio-Economic Overview of South Asian Economies

Source: The World Bank-2010

Migration and Remittances fact book 2011, The World Bank

Source: The World Bank-2010

The World Bank Report 2005

Figure 2.4 : Workers Remittances % of GDP -South Asia

Source: The World Bank-2010

population, increased exports and remittances prospects, however their individual

Source: The World Bank-2010

Table 2.1: South Asia: Macroeconomic Indicators

Exports of goods and services (% of GDP) 32.3

Current State of HRD in South Asia

Figure 3.1: Educated Unemployed in South Asia

Unemployed with tertiary education

Unemployed with primary education

Unemployed with secondary education

Source: The World Bank-2010

Source: The World Bank-2010

Figure 3.3: Education Expenditure Annual Average 2005-2010

Source: Asian Development Bank Online Database-2011.

Figure 3.4: Health Expenditure Annual Average 2005-2010

Source: Asian Development Bank Online Database-2011

Human Development Index

Source: UN Statistics Department-2011

Education and Literacy South Asia 2009

Source: Asian Development Bank Online Database-2011

Mean Year of Schooling- South Asia (%)

2007 2008 2009 2010

South Asia Pupil Teacher Ratio

Country/Indicators Primary PupilTeacher Ratio

Secondary PupilTeacher Ratio

Source: Asian Development Bank Online Database-2011

Figure 3.5: South Asia School and Tertiary Enrollment

Tertiary Enrollment (% gross)

Source: The World Bank-2010

South Asian Health Indicators (2009)

Source: Asian Development Bank Online Database-2011

5. Current Trends of Remittances in South Asia

Figure 5.1: External Resource Inflow South Asia 1980 2010

Private capital flows

Net ODA and official aid

Source: The World Bank-2010

Figure 5.2: Global Workers Remittances

East Asia & Pacific

Europe & Central Asia

Latin America & Caribbean

Source: The World Bank-2010

Figure 5.3: Worker's Remittances relative to GDP

East Asia & Pacific

Europe & Central Asia

Latin America & Caribbean

Source: The World Bank-2010

Source: The World Bank-2010