Migrant remittances in Europe and Central AsiaRecent trends and global experiences in remittance data collection

Sanket Mohapatra (with D. Ratha, J. Irving and A. Silwal)Development Prospects GroupWorld Bank

ECA Migration and Remittances Peer Assisted Learning Network (MiRPAL)Washington DCMarch 26, 2010

Outline

Recent trends in migration and remittances in Europe and Central Asia

◦ Intra-regional and out of region migration

◦ Impact of financial crisis on remittance flows

Improving remittance data collection – global experiences

◦ Findings from global survey of central banks on collection of remittances data

◦ Recent policy initiatives to improve remittance data collection

Global experiences in data collection of remittances

Draws on findings from global survey of central banks on migrant remittances - by Dilip Ratha, Jacqueline Irving, and Sanket Mohapatra (forthcoming as World Bank Working Paper)

One of the aims of global survey to gain a better understanding of how central banks collect data and other information on migrant remittance flows.

Survey questions on data collection

Which institutions collect data? What are the methods? What RSPs are covered? How are these changing? How are RSPs regulated? How does regulation affect costs? What factors affect the choice of

remittance channel?

Inflows and outflows of remittances

Two main versions: focusing on inflows and outflows

Sent to 176 countries worldwide 112 countries have submitted survey responses:

Of which [XX] countries are in Europe and Central Asia

Remittance receiving countries

Remittance source countries

Inflows are better monitored than outflows

Almost all (96%) remittance-receiving countries collect data, vs. 84% of remittance-sending countries

Data collection has been going on longer for inflows than for outflows:

72% of remittance-receiving countries collecting data for more than 5 years

55% of remittance-sending countries collecting data for more than 5 years

Under-recording of remittances

Lower priority given to recording remittance outflows by many migrant host countries—particularly where remittances are small relative to GDP ◦ Russian Federation a notable exception

Use of cross-border data reporting thresholds Many central banks until recently relied on data

reported solely by banks; more nonbank RSPs are beginning to report data

Remittances hand carried by migrants and others visiting migrants’ home countries

In-kind remittances

Some lack of coordination in data collection

Within the same institutionAcross national institutionsBetween counterpart national

institutions, including for major remittance corridors

Data collection/estimates of informal remittances

42% of the remittance-receiving countries said they collect data on informal remittances

70% of the remittance-receiving countries that collect these data reported doing so with regularity

But a considerably fewer number of remittance-receiving countries (17%) provided actual informal flows data estimates

Only two of the remittance-sending countries (Germany and Russia) indicated that they collect data on informal remittances

Methods of estimating informal flows

3

3

3

3

7

7

13

27

47

0 10 20 30 40 50

Errors & omissions in BoP

Number of workers abroad

Information from newspapers

Expert estimates

Foreign embassies on labour permits

Cash carried across borders bycourrier/transport companies

Cash carried at entry points

Share in foreign exchange transactions

Propensity to remit from surveys

Percent of central banks

Regulation of RSPs is weak in remittance- receiving countries

Many new market entrants’ remittance activities are not regulated:◦ 39% of post offices◦ 37% of MFIs◦ 25% of mobile phone service providers◦ 23% of MTOs

Better statistics and studies are cited as areas needing attention

28

42

47

49

61

63

0 20 40 60 80

Financial integrityissues

Increased competitionamong RSPs

New remittancetechnologies/products

Delivery of remittancesto remote areas

Better statistics onremittances

Better statistics &studies on migrants

Remittance-receivingcountries

% of central banks citing area as needing improvement to increase efficiency, security of transfer s

High cost was cited as top factor inhibiting use of formal channels

15

29

42

49

50

50

57

0 20 40 60

Exchange controls

Mistrust of formal financial institutions

Sender's lack of valid ID

No bank branch near beneficiary

Mistrust/lack of info. on electronic transfers

Recipient's lack of access to bankaccounts

High cost

% of central banks

Remittance-receiving countries

Policy recommendations – improving data collection

Improve procedures for remittances data collection and monitoring, including by compiling and monitoring cross-border remittance flows data at higher frequencies and disaggregated by source country where possible.

For many remittance-receiving countries, revise data compilation methods to better distinguish remittance inflows from other capital inflows.

As new RSP entrants emerge, it becomes increasingly important for countries to give priority to determining an effective means of taking into account these new channels and technologies in data collection and monitoring.

Policy recommendations - improving coordination within and across countries

Improve coordination in data monitoring, with more systematic data and information exchange, better communication, and more effective division of labor to avoid duplication of efforts.

Better coordination in data collection both across different institutions and between different divisions within the same institution.

For major remittance corridors, developing some means of regular, more systematic data and information sharing and exchange on migrant remittance flows between counterpart national institutions.

One of four thematic areas of Global Remittances Working Group (GRWG) is on improving remittances data Technical meeting in June 2009, Washington DC

(follow-up meeting in Rome in November 2009). Technical working group will meet periodically to:

◦ Promote sharing of detailed metadata about country practices◦ Develop web-based mechanism for controlled exchange of

“bilateral” data, to help countries examine asymmetries◦ Provide global coordination mechanism for regional initiatives

(such as the CEMLA program)◦ Promote country capacity building and technical assistance

Improving data collection efforts through household/labor force surveys◦ Using household surveys to improve Balance of Payments

statistics

◦ Compilation of household surveys containing migration and remittance questions/modules

Thematic Area 1 leader: Neil Fantom, Development Data Group, World Bank.