Migration and Development Brief

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Migration and Development Briefs are prepared by the Migration and Remittances Unit, Development Economics (DEC). The brief aims to provide an update on key developments in the area of migration and remittance flows and related policies over the past six months. It also provides medium-term projections of remittance flows to developing countries. A special topic is included in each brief. The brief is produced twice a year.

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  • Publication
    Migration and Remittance Trends 2009 : A Better-Than-Expected Outcome So Far, But Significant Risks Ahead
    (World Bank, Washington, DC, 2009-11) Ratha, Dilip; Silwal, Ani
    Newly available data show that officially recorded remittance flows to developing countries reached $338 billion in 2008, higher than our previous estimate of $328 billion. Based on monthly and quarterly data released by some central banks and in line with the World Bank's global economic outlook we estimate that remittance flows to developing countries will fall to $317 billion in 2009. This 6.1 percent decline is smaller than our earlier expectation of a 7.3 percent fall. While new migration flows have fallen, existing migrants are not returning even though the job market has been weak in many destination countries. We maintain our expectation of a recovery in migration and remittance flows in 2010 and 2011, but the recovery is likely to be shallow. In all the regions, remittance flows are likely to face three downside risks: a jobless economic recovery, tighter immigration controls, and unpredictable exchange rate movements. Despite these risks, remittances are expected to remain more resilient than private capital flows and will become even more important as a source of external financing in many developing countries. Policy responses should involve efforts to facilitate migration and remittances, to make these flows cheaper, safer and more productive for both the sending and the receiving countries.
  • Publication
    Outlook for Remittance Flows 2009-2011 : Remittances Expected to Fall by 7-10 Percent in 2009
    (World Bank, Washington, DC, 2009-07) Ratha, Dilip; Silwal, Ani
    Newly available data show that remittance flows to developing countries reached $328 billion in 2008, larger than previous estimate of $305 billion. Remittances grew rapidly during 2007 and 2008, but have slowed down in many corridors since the last quarter of 2008. In line with a recent downward revision in the World Bank's forecast of global economic growth, also lowered forecasts for remittance flows to developing countries to -7.3 percent in 2009 from the earlier forecast of -5 percent. Flows to Latin America have been falling in a lagged response to the construction sector slowdown in the US, but there are emerging signs of a bottoming out. In contrast, flows to South Asia and East Asia have been strong; but there is risk of a slowdown going forward. The predicted decline in remittances is far smaller than that for private flows to developing countries. The resilience of remittances arises from the fact that while new migration flows have declined, the stock of migrants has been relatively unaffected by the crisis. Sources of risk to this outlook include uncertainty about the depth and duration of the current crisis, unpredictable movements in exchange rates, and the possibility that immigration controls may be tightened further in major destination countries.
  • Publication
    Revised Outlook for Remittance Flows 2009‐2011 : Remittances Expected to Fall by 5 to 8 Percent in 2009
    (World Bank, Washington, DC, 2009-03) Ratha, Dilip
    The authors have revised forecasts for remittance flows in the light of a downward revision to the World Bank's global economic outlook. The authors now expect a sharper decline of 5-8 percent in 2009 compared to earlier projections outlined in migration and development brief 8 (report no. 46715). This decline in nominal dollar terms is small relative to the projected fall in private capital flows or official aid to developing countries. However, considering that officially recorded remittances registered double-digit annual growth in the past few years to reach an estimated $305 billion in 2008, an outright fall in the level of remittance flows as projected now will cause hardships in many poor countries.
  • Publication
    Outlook for Remittance Flows 2008-2010 : Growth Expected to Moderate Significantly, But Flows to Remain Resilient
    (World Bank, Washington, DC, 2008-11) Ratha, Dilip; Xu, Zhimei
    The outlook for remittances for the rest of 2008 and 2009-10 remains as uncertain as the outlook for global growth, oil and non-oil commodity prices, and currency exchange rates. In the past, remittances have been noted to be stable or even counter-cyclical, during an economic downturn in the recipient economy, and resilient in the face of a slowdown in the source country. This time, however, the crisis has affected all countries, creating additional uncertainties.
  • Publication
    Protecting Temporary Workers : Migrant Welfare Funds from Developing Countries
    (World Bank, Washington, DC, 2008-10) Ruiz, Neil G.; Rannveig, Dovelyn Agunias
    This brief provides an overview and lessons on how countries of origin governments can play a major role in protecting their migrants abroad through migrant welfare funds. It draws from a study by the Migration Policy Institute, on the Philippine Overseas Workers Welfare Administration (OWWA), a US$172 million government-operated welfare fund that is funded by a mandatory US$25 membership fee for departing Overseas Filipino Workers (OFWs). The Philippine experience shows that a welfare fund has to: (1) find the right balance of services; (2) create meaningful partnerships; (3) build accountability with its members; and (4) actively involve destination countries.
  • Publication
    Managing Migration : Lessons from the Philippines
    (World Bank, Washington, DC, 2008-08) Ruiz, Neil G.
    This note provides a glimpse of the institutions built to manage migration in the Philippines. It describes how one country of origin government helps its migrants by regulating overseas employment recruitment, informing migrants of available resources abroad through a mandatory deployment process, providing protection and representation through a migrant welfare fund and absentee voting, and developing recording mechanisms to understand migrants' needs. Managing migration also comes with a price and governments need to develop a coordinated strategy to sustain such endeavors.
  • Publication
    Revisions to remittance trends 2007
    (World Bank, Washington, DC, 2008-07) Ratha, Dilip; Vijayalakshmi, K. M.; Xu, Zhimei
    Revised estimates show that remittance flows to developing countries were $251 billion in 2007, up 11 percent from 2006. This Brief discusses the slowdown in remittance flows to Mexico in the first part of 2008. Remittances to countries in Latin America and the Caribbean (El Salvador, Honduras, Guatemala), and Asia (Bangladesh, Pakistan, and the Philippines) continue to grow robustly.
  • Publication
    International Migration and Technological Progress
    (World Bank, Washington, DC, 2008-02) Burns, Andrew; Mohapatra, Sanket
    Along with international trade and foreign direct investment (FDI), international migration is an important channel for the transmission of technology and knowledge. However, the direction and scale of technology flows that result from international migration are less clear than for FDI and trade. Remittances to developing countries have grown steadily in recent years, reaching an estimated $240 billion in 2007, and are now larger than FDI and equity inflows in many countries, especially small, low-income countries. Remittances can support the diffusion of technology by reducing the credit constraints of receiving households and encouraging investment and entrepreneurship. Remittance flows have also contributed to the extension of banking services (often by using innovative technologies), including microfinance, to previously unserved, often rural sectors.
  • Publication
    Remittance Trends 2007
    (World Bank, Washington, DC, 2007-11) Ratha, Dilip; Vijayalakshmi, K. M.; Xu, Zhimei
    This note describes broad regional and country specific trends in remittance flows worldwide, and highlights some structural changes that will affect remittance flows in the future. The main messages are: remittance flows to Latin America and the Caribbean slowed on the back of a weakening U.S. economy and tighter enforcement of immigration laws. Nevertheless, the growth of remittances to developing countries remains robust because of strong growth in Europe and Asia. The remittance industry is experiencing some positive structural changes with the advent of cell phone and internet-based remittance instruments. These changes may have profound effects on remittance flows to previously underserved areas. The diffusion of these structural changes, however, is slowed by a lack of clarity on key regulations (including those relating to money laundering and other financial crimes). Remittance costs have fallen, but not far enough, especially in the South-South corridors.
  • Publication
    Remittance Trends 2006
    (World Bank, Washington, DC, 2006-11) Mohapatra, Sanket; Ratha, Dilip; Xu, Zhimei
    In nominal dollar terms Latin America and the Caribbean region remains the largest recipient of (recorded) remittances 2006. However, as a share of gross domestic product (GDP) remittances are highest in the Middle East and North Africa region. Due to a lack of data, remittance flows to Sub-Saharan Africa are grossly underestimated. Recorded remittance flows have grown robustly in virtually every region, although most quickly in Europe and Central Asia and in East Asia and the Pacific. The doubling of recorded remittances over the past five years is a result of: (a) increased scrutiny of flows since the terrorist attacks of September 2001; (b) reduction in remittance costs and expanding networks in the remittance industry; (c) the depreciation of the U.S. dollar (which raises the value of remittances denominated in other currencies); and (d) growth in the migrant stock and incomes. Although the United States remains the largest single source of remittances, many remittance-receiving developing countries also have a significant number of migrants in countries in the Euro area. Since remittances receipts in developing countries are typically measured in US dollars, movement in the Euro-dollar exchange rates can have a significant valuation effects on remittance, even without accounting for the wealth effect when the Euro appreciates or depreciates in real terms relative to the dollar.