You are on page 1of 37

Trends

T
d and
dO
Outlook
l k ffor Mi
Migration
i
and Remittances Worldwide
Dilip Ratha
The World Bank
The 4th ADBI-OECD-ILO Roundtable on Labour Migration in Asia:
27 28 JJanuary 2014
27-28
2014,
ADBI, Tokyo, Japan
The views expressed in this presentation are the views of the author and do not
necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI),
the Asian Development Bank (ADB), its Board of Directors, or the governments they
represent. ADBI does not guarantee the accuracy of the data included in this paper and
accepts no responsibility for any consequences of their use
use. Terminology used may not
necessarily be consistent with ADB official terms.

Key messages
There is a need for increased labor migration due to income
gaps
g
p and demographic
g p
p
pressures

Remittances to developing countries estimated to be $414


billion and to Asian developing countries $242 billion in 2013
2013.

Migration costs remain a formidable barrier to people mobility.

Trends in migration
Globally, some 3% of world population (or 232 million) are
international migrants.

73 million people from Asian developing countries live outside


their home countries in 2013
2013.

More than half of them (44 million) live in developing


countries.

Asian developing countries refer to ADB member countries. EAP refers to


East Asia and Pacific as defined by World Bank and includes a smaller
group of countries.

In the EAP region, intra-regional people mobility


is increasing
35.0

(Million)

30.0

8%

25 0
25.0

33%

20.0

6%

15.0

38%

10.0

48%

5.0

46%

0.0
2000
EAP

N America and W Europe

2013
Middle East

Source: World Bank (2013), Migration and Development Brief 21, October.

Others

Stylized facts on migration in Asia


Most migrants are unskilled.
The share of undocumented workers is large.
g
The share of female migrants has been increasing,
especially in Indonesia and the Philippines.
Philippines

Migration offers opportunities.

Over a billion jobs will have to be created in the


coming decades, both at home and abroad
Projected Change in Labor Force, 200550
((millions),
), ages
g 15-64
Sub-Saharan Africa
Middl E t & N.
Middle-East
N Africa
Af i
East and South Asia

699
187
727

Western Europe
North America
Eastern Europe & Central
Asia

-88
-12
12
-26

Source: Koettl (2010); Shaping the Future : A Long-Term Perspective of People and Job Mobility for the Middle East
and North Africa (World Bank 2008)

Demography
g p y a key
yp
pull factor for future
migration in Asia

Share of working
g age
g
population

Source: World Bank (forthcoming), International Migration and Development in the East Asia and Pacific Region.

Demography
g p y a key
yp
pull factor for future
migration in Asia
Share of population older
than 64 years
years.

Source: World Bank (forthcoming), International Migration and Development in the East Asia and Pacific Region.

Japan: Rapid aging population

United Nations Department of Economic and Social Affairs/Population Division

Remittances to developing countries estimated


to be $414 billion in 2013
800

$ billion

FDI

700
600
500
400
300
200
100
0

Source: Development Prospects Group, World Bank

Remittances
Private
debt &
portfolio
equity
ODA

Remittances to Asian developing countries


estimated to be $242 billion in 2013
450

$ billion

400

FDI

350
300
250

Remittances

200
150
100

Private
debt &
portfolio
equity

50
0
-50
50
Source: Development Prospects Group, World Bank

ODA

Remittance flows to developing countries


$ billion

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

2011

2012

2013e

2014f

2015f

2016f

373
106
38
59

389
107
38
60

414
115
43
61

449
126
47
68

491
139
52
75

540
154
58
84

43
97
30

47
107
30

49
114
32

51
123
35

54
133
38

57
145
41

Growth rate

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

11.9% 4.3% 6.3% 8.6%


12.4% 1.0% 7.4% 9.5%
0 8% 10
17 6% 1.6%
17.6%
1 6% 10.8%
10.3%
3%
6.1% 0.9% 2.5% 10.5%
6.3% 10.8% 3.6% 4.9%
6.8%
8% 7.7%
18 4% 9.7%
18.4%
9 7% 6
7 7%
4.5% -0.4% 6.2% 8.6%

Source: World Bank (2013), Migration and Development Brief 21, October.

9.3% 9.9%
10.2% 10.5%
11 2% 11.6%
11.2%
11 6%
11.1% 11.6%
5.4% 5.6%
8 5% 9.4%
8.5%
9 4%
9.2% 9.5%

Asian countries top


p remittances in 2013
$ billion,
billion 2013e

as % of GDP
GDP, 2012

71

48

60

31
26

25 25 24
22 21 20

15 15

11

Source: World Bank (2013), Migration and Development Brief 21, October.

21 21 21 20

17

Remittance growth is picking up in all regions


Growth,
G
o t ,%
18.0

East Asia and Pacific

Europe
p and Central Asia

Latin America and Caribbean

Middle-East and North Africa

South Asia

Sub-Saharan Africa

13.0

8.0

3.0

2010
-2.0

2011

2012

2013

2014

Source: Development Prospect Group, the World Bank

2015

2016

Remittance growth is picking up in all regions


Growth %
Growth,

East Asia and Pacific

18.0

13.0

80
8.0

3.0

2010
-2.0

2011

2012

2013

2014

Source: Development Prospect Group, the World Bank

2015

2016

Double dip in remittance flows to Mexico


but recovering
*year-to-year growth of 3-month moving average
35%
25%
15%
5%
-5%
-15%
15%
-25%
Jan 04
Jan-04

Sep 05
Sep-05

Source: Banxico

Apr 07
Apr-07

Dec 08
Dec-08

Aug 10
Aug-10

Apr 12
Apr-12

Nov 13
Nov-13

In the US
US, employment is recovering faster for
migrant workers than for natives*
millions
illi

125

24

123
Natives (left scale)

121

23

119
117
22

11
115
Migrants (right scale)

113
111

Jan-08

Jul-08 Jan-09

Jul-09 Jan-10

*3-month moving averages


Source: Current Population Survey

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12 Jan-13 Jul-13

21

A decoupling of housing starts in the US and


remittance flows to Mexico
Year-on-year growth (%)

30%

40%
Housing starts (right scale)

20%
10%

0%
-20%

-10%
Remittances to Mexico

-40%

3-month moving averages

Jul-13

Feb-13

Sep-12

Apr-12

Nov-11

Jun-11

Jan-11

Aug-10

Mar-10

Oct-09

May-09

Dec-08

Jul-08

Feb-08

Sep-07

Apr-07

Nov-06

-60%
60%
Jun-06

-30%
30%

Currency depreciation to encourage remittances


to India
20.0

65
Remittances ($ bn,
left axis)

18 0
18.0

60

16.0

55
Rupee/$

14.0

50

12 0
12.0

45

10.0

40

8.0

35
Q1
2007

Q4
2007

Q3
2008

Q2
2009

Source: Internal Financial Statistics, IMF

Q1
2010

Q4
2010

Q3
2011

Q2
2012

Q1
2013

After a decline during the crisis, remittance flows


from Russia to Central Asian countries are
recovering with increase in oil prices
140

9
8

120

7
100

80

60

4
3

40
Avg oil (Brent/Dubai/WTI) $/B

Russia outflows ($ billion, right axis)

0
Jan-2004 May-2005 Oct-2006 Feb-2008 Jul-2009 Nov-2010 Apr-2012

20

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

Registered Syrian Refugees are increasing


Registered Syrian Refugees (thousands)
2,500
2,000
1 500
1,500
1,000
500
0
Dec-11

Apr-12

Aug-12

Jan-13

May-13

Sep-13

Source: UNHCR based on available data from Egypt, Iraq, Jordan, Lebanon and Turkey

Jan-14

Remittance price is falling, but not as much in


l
low
volume
l
corridors
id
where
h
remittance
itt
is
i more
important
10%

Cost of sending $200

9%
8%

Global simple
average

7%
6%

Global weighted
g
average

5%
%

Source: World Bank (2013), An Analysis of Trends in the Average Total Cost of Migrant Remittance
Services, Remittance Prices Worldwide, December.

Remittance costs are still too high


Cost of sending $200 (%)

2013-Q4
12.6

83
8.3

SSA

EAP

86
8.6

Global

7.8

MENA

Source: Remittance Prices Worldwide, World Bank.

7.0

LAC

6.6

SA

6.3

ECA

In EAP, remittance costs are high,


especially in Australia and Japan
Cost of sending $200
$
(%) in 4Q2013

16.2
13 7
13.7

94
9.4
7.2

7.6

Australia to
Phili i
Philippines

Singapore to
Chi
China

3.7

Singapore to
Phili i
Philippines

Japan to
Chi
China

Source: Remittance Prices Worldwide, World Bank.

New Zeland to Australia to


Fiji
Fiji

Are remittance costs rising?

Liftingg fees
Closing of MTO accounts by correspondent banks

Recruitment costs can be a drain on migrants


income
Sending
Destination/Occupation country
Domestic worker in
Hong Kong

Construction worker in
Middle East

Manufacturing worker
in Korea

Average recruitment
cost ($)

In months of
wages

Indonesia

2,708

5.4

Philippines

1 719
1,719

34
3.4

Nepal

1,200

6.0

Bangladesh

2,891

14.5

Bangladesh

950

<1

Sources: ITUC, IMWU and HKCTU, June 2012; APL-HK and PLU, April 2013; Martin 2013, Human Rights Watch 2013, World Bank
2011 (Nepal report), Koreas EPS. These data should be viewed as preliminary.

Challenges to capitalize migration and


remittance links for development.
development
Remittances

Knowledge
g and
technology transfer

Philanthropy

Trade

Investment &
p
p
entrepreneurship

Tourism

Skills

Values & advocacyy

The wealth of the diaspora can be mobilized


through diaspora bonds
Diaspora size
(millions)
Developing countries

Estimated savings
($ billions, 2009)

161.5

397.5

East Asia & Pacific

21.7

83.9

Europe & Central Asia

43.0

72.9

Latin America & Caribbean

30.2

116.0

Middle East & North Africa

18 0
18.0

41 2
41.2

Sub-Saharan Africa

21.8

30.4

South Asia

26.7

53.2

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


Source: Ratha and Mohapatra (2011).

Global Knowledge Partnership on


Migration and Development (KNOMAD)
An open, inclusive, multidisciplinary knowledge
partnership.
partnership

Aims to generate a menu of policy choices, based


on analytical evidence and quality control through
peer-review.

A global public good that is also a learning process.

Data

Internal
migration

Environmental
h
d
change
and
migration

Mobilizing
other
diaspora
resources

Highskilled
labor
migration

Migration
and
security

Thematic
Working
Groups

Demography
and
migration

Integration
issues in host
communities

Migrant
rights and
social
aspects
Remittances

Lowerskilled labor
migration

Policy and
institution
al
coherence

Thematic Working Groups


1. Data on migration and remittance flows 10.Mobilizing diaspora resources as
2. Skilled labor migration
3. Low-skilled labor migration
4. Integration issues in host communities
5. Policy and institutional coherence
6. Migration, security and development
7 Migrant rights and social aspects of
7.
migration

8. Demographic changes and migration


9. Remittances, including access to
finance and capital markets

g
of social and economic change
g
agents

11.Environmental change and migration


12 Internal migration and urbanization
12.
Cross-cutting themes:

1. Gender
2. Monitoring and impact evaluation
3. Capacity building
4. Public perceptions and communications

Highlights
g g
of TWG Work Programs
g

1 Data: Handbook on Improving Data on Migration


1.
and Development: A Practical Guide.
(B Hovy,
(B.
Hovy UN DESA; F
F. Laczko,
Laczko IOM)

2. Skilled labor migration: Emerging global patterns


off skilled
kill d migration.
i ti
(S. Angenendt, BMZ; C. Ozden, World Bank)

3. Low skilled labor migration: Database on


recruitment costs;; Assessment of implementation
p
of bilateral agreements
(M Abella; M.
(M.
M Tomei,
Tomei ILO)

Highlights
g g
of TWG Work Programs
g
4. Integration
g
issues: Comparative
p
case study
y of
effects of integration in host country and reintegration in homeland.
(H. Duncan, Metropolis; G. Appave, IOM)
5 Policy coherence: Identification of coherence
5.
criteria & development typology/assessment tool.
(B. Godenzi, SDC; D. Khoudour, OECD; S.
Rosengaertner, UNDP)
6. Security: Inventory of data on border security
(K. Koser, Geneva Centre for Security Policy;
M. Fowke, UNODC)

Highlights
g g
of TWG Work Programs
g
7. Migrant rights: Development of indicators
(W. Gois, MFA; R. Saab, UNICEF; P. Oberoi,
OHCHR)
8. Demographic change: Impact of international
migration on fertility and mortality in countries of
origin and destination.
((R. Muenz;; A. Pawliczko,, UNFPA))
8. Remittances: TA on remittance data according to
new IMF BPM6; Regulations affecting remittance
service providers.
(D Ratha; WB)
(D.

Highlights of TWG Work Programs


10.Diaspora Resources: Diaspora Profiles;
Assessment of diaspora
p
p
programs.
g
(K. Newland, MPI; S. Plaza, WB)
11.Environmental
11
E i
t l change:
h
IImpacts
t off slower
l
environmental change and planned relocation.
(S. Martin, Georgetown)
g
Drivers and effects of internal
12.Internal migration:
migration; Mechanisms to cope with migrants'
vulnerability.
(C. Abrar; University of Dhaka; R. VargasLundius; IFAD)

Partnerships
p

International and regional agencies


Universities and research institutions
Think tanks
International initiatives
Networks
Civil society

Website: www.knomad.org