Migration, Post-2015 Development Goals, And the KNOMAD

Dilip RathaWorld Bank

New YorkJanuary 24, 2013

Outline

Migration and development

Migration and development goals

KNOMAD

South-South migration is larger than migration from developing countries to OECD countries

South44%

High-income non-OECD

14%

High-income OECD42%

Note: South = Developing countries

Source: Migration and Remittances Factbook 2011

Destination of migrants from the South

There were more than 215 million migrants worldwide in 2010.

Migration affects development

Skills

Investments

Remittances

19911993

19951997

19992001

20032005

20072009

2011e2013f

2015f0

100

200

300

400

500

600$ billions

Remittances to developing countries estimated to reach $406 bn in 2012

Source: Development Prospects Group, World Bank

IndiaChina

Philippines

Mexico

NigeriaEgyp

t

Pakist

an

Banglad

esh

Vietnam

Leban

on

70 66

24 24 21 18 14 149 7

Top remittance recipients in 2012

$ million, 2012e as % of GDP, 2011

Tajikis

tan

Liberia

Kyrgyz

Rep

ublic

Lesotho

MoldovaNep

al

Samoa

Haiti

Leban

on

Kosovo

47

31 29 2723 22 21 21

18 18

Remittances have reduced poverty in Nepal

23

42

32 31

15

20

25

30

35

40

45

% of householdreceiving remittances

Poverty headcount rate%

1995/62003/4

Source: World Bank, DFID, ADB Study 2006, Glinskaya and others 2006

Remittances helped reduce poverty in Sri Lanka

0 0 1

1620

83 5

-1-7

-10

-5

0

5

10

15

20

25

1 2 3 4 5 6 7 8 9 10

% of Sri Lankan households that moved up to a higher income decile after receiving remittances, 1999-2000*

Income Decile

Source: De and Ratha (2012)

Remittances tend to rise following crisis, natural disaster, or conflict

Remittances as % of private consumption

0.5

1.7

1.21.4

2.0 2.0

1.0

1.82.0

Indonesia Thailand Mexico

year beforeyear of crisisyear after

Note: Crisis refers to Asian financial crisis in 1997-98

Significant share of remittances spent on human capital and physical capital investments varies by level of development

Percent of remittances from outside Africa

30 37 43 4767

51 35 33 26

14

1927 24 27

19

Kenya Nigeria Uganda BurkinaFaso

Senegal

Other uses

Housing, land &businessinvestmentsFood, education &health

* Uganda excludes unspecified use of remittances (2/5 th of total remittances)Source: Africa migration project household surveys; GLSS 2005-06

Migration associated with higher educational attainment

Migration associated with access to banking

Remittances improve country creditworthiness External debt as share of exports and remittances

0%100%200%300%400%500%600%700%800% Including remittances

Excluding remittancesExternal debt as % of exports

Downside of Remittances and Migration

Large remittance flows may lead to currency appreciation

Remittances may create dependency

Remittance channels may be misused for money laundering and financing of terror

Social impact on family left behind

Competition in job markets

Impact on culture and identity in destination communities

Migration pressures will grow in future because of demographic changes, and income gaps

Projected Change in Labor Force, 2005–50 (millions), ages 15-64

Sub-Saharan Africa 699Middle-East & N. Africa 187East and South Asia 727

Western Europe -88North America -12Eastern Europe & Central Asia -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)

High-skilled migration is larger in poor countries which already suffer from low skill levels

But migration can augment skill levels in developing countries through brain gain, skill and technology transfers, and return migration

Middle Income Low Income0%

5%

10%

15%

20%

25%

Share of the Tertiary Educated in the Labor ForceMigration Rate among the Tertiary Educated

Cost of remittances can be reduced

$23.1

$17.9$17.0

$15.1 $14.5$13.1

Source: World Bank Remittances Prices Worldwide database (January 2011)

Average cost of sending $200 to developing regions

*EAP excludes Pacific Islands

Post offices and mobile phone companies can play a major role in expanding access to the poorest, but need to avoid exclusive partnerships (both in source and destination countries)

The wealth of the diaspora can be mobilized through diaspora bonds

Diaspora size(millions)

Estimated savings($ billions, 2009)

Developing countries 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 41.2

Sub-Saharan Africa 21.8 30.4

South Asia 26.7 53.2

Source: Ratha and Mohapatra 2011.

Also remittances can be used as collateral to raise bond financing for development projects

Development also affects migration

Interactions between migration and development are complex, and multi-dimensional

Policy implications1. The international remittances agenda

2. Know your migrants/diaspora

3. Help potential migrants acquire globally marketable skills

4. Point-based systems can produce adverse effects on developing countries – Labor markets

5. But ethical recruitment policies may be ineffective, and unethical

6. Improve transparency in recruitment of migrants

7. Border control policies should be revisited

8. Migration is not a substitute for job creation at home

New Idea:Diaspora bonds for funding medical training

50 diaspora students, attrition rate 10 1st yr, 5 afterwardTuition $30K per year, for 4 years;

25 local students trained freeRevenue per year: $4.65 mn

Cost of training: $2.32 mn

Cash flow: $2.33 mn

At 5% coupon this could support debt of $46 mn into perpetuity

Source: Ketkar and Ratha (2011)

New Idea:Leveraging remittances for the global fight against malaria

Migration must feature in post 2015 development goals

Migration affects development; and development affects migration.

Migrants, like those in the informal sector, should be included in MDG discussions

And development goals should not always be country-specific

Migration must feature in post 2015 development goals

Channels: Remittances, Skills, Investments

Targets: Cost of remittances; Cost of migration; Amount of financing

Principles: “Treat your immigrant the way you want your migrants to be treated every where”;

“Every one should have basic human rights, at home and abroad”

Global Knowledge Partnership on Migration and Development (KNOMAD)

Rationale for KNOMAD

Vast knowledge not always accessible to policy makers

Knowledge spread out over many disciplines

There are information and knowledge gaps in many key areas of migration and development

KNOMAD

Open, inclusive, multidisciplinary knowledge partnership

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

Structure Twelve thematic working groups supported by a small

secretariat

Advisory committee

Contractual as well as voluntary contributions

Multi-donor trust fund at the World Bank

KNOMAD THEMATIC WORKING GROUPS

Data

High-skilled labor

migration

Lower-skilled labor migration

Integration issues in host communities

Policy and institution

al coherence

Migrant rights and

social aspects

Demography and

migration

Remittances

Mobilizing other

diaspora resources

Environmental change and migration

Internal migration

Migration and

security

Thematic Working Groups1. Data 2. High-skilled labor migration3. Low-killed labor migration4. Integration issues in host communities5. Policy and institutional coherence6. Migration, security and development7. Migrant rights and social aspects of migration8. Demography and migration9. Remittances, incl. access to finance and capital markets10. Mobilizing diaspora resources11. Environmental change and migration12. Internal migration and urbanization

Cross-cutting themes

Monitoring and Impact Evaluation

Capacity Building

Gender

Public perception and communication?

Partnerships

International and regional agencies Universities and research institutions Think tanks International Initiatives Networks Civil Society

Outputs

• A menu of policy choices• Analytical research products• Policy briefs• Operational toolkits, fact books• Web-based anthologies, archives, blogs• Few pilot projects and capacity building activities

Time line

Inception phase (ending March 2013)

Implementation phase (April 2013-Dec 2017)

Evaluation – 2016

Pilot projects – 2016-17

Exit

How might KNOMAD contribute to the

Post-2015 development agenda?

Data and other resources are available at

www.worldbank.org/migration

www.knomad.org