- International migration – the movement of people across international boundaries – has enormous implications for growth and poverty alleviation in both origin and destination countries.
- According to newly available census data, more than 247 million people were living outside of their countries of birth in 2013, and over 750 million migrate within their countries. In the coming decades, demographic forces, globalization and climate change will increase migration pressures both within and across borders.
- International migration boosts world incomes. By allowing workers to move to where they are more productive, migration results in an increase in aggregate output and income.
- Remittances generally reduce the level and severity of poverty and lead to: higher human capital accumulation; greater health and education expenditures; better access to information and communication technologies; improved access to formal financial sector services; enhanced small business investment; more entrepreneurship; better preparedness for adverse shocks such as droughts, earthquakes, and cyclones; and reduced child labor.
- Diasporas can be an important source of trade, capital, technology, and knowledge for countries of origin and destination.
- Officially recorded remittances to developing countries were $427 billion in 2014, an increase of about 3.3% over the previous year. Global remittance flows, including those to high-income countries, are estimated at $580 billion in 2014.
- The top recipients of officially recorded remittances in 2014 were India ($70 billion), China ($62 billion), the Philippines ($28 billion), and Mexico ($25 billion). Other large recipients included Nigeria, Egypt, Pakistan, Bangladesh, Vietnam and Indonesia. However, as a share of GDP, remittances were larger in smaller and lower income countries; top recipients relative to GDP in 2014 were Tajikistan (42%), Kyrgyz Republic (30%), Nepal (30%), and Moldova, Tonga, and Liberia (all 26%).
- Remittances sent home by migrants to developing countries are equivalent to more than three times the size of official development assistance.
- Remittance flows to developing countries are projected to slow down to 2.0 percent growth in 2015 (to $435 billion), owing to economic difficulties in the major remittance-source countries, especially Russia. Depreciation of the euro and the ruble against the U.S. dollar further dampened remittance flows in US dollar terms, especially to countries in Europe and Central Asia. Remittances to developing countries are expected to rise by about 4 percent in 2016 and 2017, buoyed by the continuing recovery in the United States and a modest acceleration of economic activity in Europe. However, the potential for further dollar appreciation against the currencies of remittance-sending countries and the possibility of reduced remittance flows from oil-exporting countries should oil prices remain low are important downside risks to this forecast.
- Remittance costs have fallen steadily in recent years, but they remain high, especially in Africa and in small nations where remittances provide a lifeline to the poor. Globally, migrants pay an average cost of 7.7% to send money home. Reducing the average remittance price to 5 percent, in line with G8 and G20 targets, could save migrants around $14 billion a year.
World Bank Group Engagement
Recognizing the close links between migration and development, the WBG is deepening its engagement on this broad agenda, including:
- Building partnerships and strengthening collaboration: The WBG initiated the Global Knowledge Partnership on Migration
and Development (KNOMAD), which is aimed at generating and synthesizing knowledge on migration issues for countries, generating a menu of policy choices based on multidisciplinary knowledge and evidence, and providing technical assistance and capacity building to sending and receiving countries for the implementation of pilot projects, evaluation of migration policies, and data collection. KNOMAD was launched in 2013, and is being supported with funding from Germany’s Federal Ministry of Economic Cooperation and Development (BMZ), Sweden’s Ministry of Justice, Migration and Asylum Policy, and the Swiss Agency for Development and Cooperation (SDC). The WBG is closely involved in global partnerships to develop policy coherence on the treatment of migration, including active participation in the Global Migration Group and the Global
Forum on Migration and Development. In 2015 the WBG is the chair of the Global Migration Group. The WBG also supported efforts to reflect migration issues in the Post-2015 Development Agenda and is now involved in measurement and implementation of the related SDGs.
- Mobilizing diaspora financial resources for development: The WBG is supporting client efforts to develop financing instruments for leveraging migration and remittances for national development purposes. Diaspora bonds can be a powerful financial instrument for mobilizing diaspora savings to finance specific public and private sector projects. The WBG has set up a Task Force for the Implementation of Diaspora Bonds to provide technical assistance to clients. Such innovative financing instruments are attracting increased interest from developing countries for financing the post-2015 development goals.
- Improving data collection: The WBG is working with statistics gathering agencies to strengthen the collection of data on migration and remittance flows. The WBG publishes a comprehensive dataset on annual remittances data (inflows and outflows), monthly remittances data to selected countries, and estimates of bilateral migration and medical ‘brain drain’ for over 200 countries. The WBG has also prepared a dataset on second-generation diaspora stocks.
- Providing policy advice: The WBG is actively engaged in identifying migration policies, regulations, and institutional reforms in both receiving and sending countries that are expected to contribute to superior development outcomes.
- Strengthening the links between remittances and financial inclusion: The WBG is supporting efforts to enhance the integrity of money transfer systems and realize the potential of regular remittance flows to improve access to wider financial services for migrants and remittance recipients.
- Measuring the global average cost of remittances: Through the Remittance Prices Worldwide database, the WBG provides a tool for monitoring progress towards the G20’s 5x5 objective. The WBG chairs the Global Remittances Working Group, which was formed in 2008 at the request of G8 countries in order to coordinate global activities on remittances.
- Facilitating a reduction in the cost of making remittances: The WBG is working to create an enabling environment for the reduction of remittance prices by helping to improve the infrastructure for domestic and cross-border payments, remove legal barriers to the development of sound remittance markets, and foster market competition. In FY 2013, the WBG assisted more than 20 countries worldwide, including Indonesia, Nicaragua, Samoa, and Liberia, in implementing policy reforms, technical improvements, and regulatory changes aimed at enhancing the remittance market for consumers.
The WBG publishes a Migration and Remittances Factbook, which provides a snapshot of migration, skilled migration and remittances, and socio-economic characteristics for all countries, regions and income groups. A new edition of the Factbook will be
published in 2015. A more frequent Migration and Development Brief is published at least twice annually.
In 2012, the WBG published the “Guidance Report for the Implementation of the CPSS-World Bank General Principles for International Remittance Services,” for national authorities, international organizations, private sector stakeholders, civil society, and other entities working on remittance policy and market reform. In 2007, the WBG collaborated with the Committee on Payment and Settlement Systems of the Bank for International Settlements to publish the General Principles for International Remittances Services.
During 2011, the WBG issued several books related to migration, including Migration and Remittances during the Global Financial Crisis and Beyond; Leveraging Migration for Africa: Remittances, Skills, Investments and two companion volumes on Diaspora for Development of Africa, and Remittance Markets in Africa.
In 2006, the WBG published Global Economic Prospects 2006: Economic Implications of Remittances and Migration, and Remittances: Development Impacts and Future Prospects.