Migration and the Post 2015
Development Agenda
Dilip Ratha
The World Bank
Integrating Migration into Development Strategies and into the Post 2015
Agenda
Session: Migration and Inclusive Economic Growth
July 1, 2014,
Brussels,, Belgium
Key questions
 Which measurable indicators for reducing the costs of labor
migration?
 What can be done to increase productive use of remittances?
 What can be done to boost diaspora investments for
development?
Outline of presentation:
Possible migration-specific goals for post2015 agenda
 Reduce cost of remittances
 Mobilize additional sources of financing for
development
 Reduce the costs of migrating including
recruitment, visa, passport cost and residency
permits
 Protect the rights and safety of migrants
Remittances to developing countries estimated
to be $404 billion in 2013
800
$ billion
FDI
700
600
500
Remittances
400
300
200
100
0
Source: Development Prospects Group, World Bank
Private
debt &
portfolio
equity
ODA
Remittance price is falling, but not as much in
low volume corridors where remittances are
more important
10%
Cost of sending $200
9%
8%
Global simple
average
7%
6%
Global weighted
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 $200 (%)
2013-Q4
12.6
8.3
8.6
7.8
7.0
SSA
EAP
Global
MENA
Source: Remittance Prices Worldwide, World Bank.
LAC
6.6
SA
6.3
ECA
Global remittances agenda
•
•
•
•
1. Monitoring,
analysis,
projection
2. Retail payment
system
3. Financial
access for
households,
SMEs
4. Capital market
access for
countries,
companies
Size, corridors, channels
Counter-cyclicality
Effects on poverty, education, health, investment
Policy (costs, competition, exchange controls)
• Payment platforms/instruments, disclosure, crossborder arbitration
• Excclusive partnerships between national post
offices and MTOs
• Anti-money laundering (AML/CFT)
•
•
•
•
Deposit and saving products
Mortgage, consumer loans, microfinance
Credit history for MFI clients
Insurance products
• Sovereign credit rating
• Bonds backed by future remittances as collateral
• Diaspora bonds
A nation of migrants would be the sixth
largest economy in the world
Estimated GDP
($ trillions, 2012)
United States
16.2
China
8.2
Japan
5.9
Germany
3.4
France
2.6
Nation of migrants
2.6
United Kingdom
2.5
Source: De, Ratha and Reza 2014.
The wealth of the diaspora can be mobilized
via diaspora bonds
Estimated savings
($ billions, 2012)
Developing countries
511
East Asia & Pacific
116
Europe & Central Asia
93
Latin America & Caribbean
146
Middle East & North Africa
47
Sub-Saharan Africa
37
South Asia
72
Source: De, Ratha and Reza 2014.
Reduce Migration costs
 Visa, passport cost and residency permits
 Recruitment costs
Reducing recruitment costs
 Recruitment costs are high, regressive and nontransparent
 Recruitment costs can be reduced significantly
via regulation and monitoring of recruitment
practices, educating migrants about their rights,
and cooperation between sending and receiving
countries
 Reducing recruitment costs will benefit the
migrant, the employers and migrant’s families left
behind; it will also encourage more regular
migration
Recruitment costs can be high
Destination/
Occupation
Sending
country
Average
migration cost
In months of
wages
Domestic worker in
Hong Kong
Indonesia
$2,708
5.4
Philippines
$1,719
3.4
$1,200
6.0
$2,891
14.5
Construction worker in
Middle East
Nepal
Bangladesh
Sources: ITUC, IMWU and HKCTU, June 2012; APL-HK and PLU, April 2013; Martin 2013, Human
Rights Watch 2013, World Bank 2011 (Nepal report), Korea’s EPS. These data should be viewed
as preliminary.
Recruitment process
1st mile:
Sending
country
Migration
process
Last mile:
Destination
country
Recruitment process
1st mile:
Sending
country
Migration
process
Last mile:
Destination
country
Key questions
 How to reduce the cost?
 By how much?
 Who will benefit?
How to reduce recruitment costs
1st mile: Sending country
Regulate recruitment agencies
Educate potential migrants about their rights as workers
Equip embassies abroad to provide services to migrant
workers, especially open windows for consultations and
complaints
Negotiate with destination countries about employment
conditions of workers
Publish data on recruitment costs by job category
How to reduce recruitment costs
Last mile: Destination country
Regulate employers and recruitment practices
(Korea: government-managed Employment Permit System,
recruitment cost declined to $950 in 2012 from $3,509 in 2001)
Educate migrants about their rights and employment
conditions
Work with sending countries
Publish data on recruitment costs
How to reduce recruitment costs
2nd mile: Migration/Transportation
Examine visa policies
Streamline passport issuance
Provide information on employment opportunities
to facilitate job-matching
Provide loans for migration costs? Perhaps not.
How much reduction in recruitment costs
is feasible?
 Compare with the cost of recruiting high-skilled
migrant workers (e.g., nurses)
 Develop bilateral matrices of recruitment costs for
agricultural workers, construction workers and
domestic workers
Who would benefit from lower migration
costs?
 Migrants incomes, savings, remittances would increase;
loan burden would decrease
 Employers would also benefit
 Sending countries would earn foreign exchange via
remittances and investments by migrants
 Irregular migration is likely to decrease
 Need for a good analytical study on benefits of reducing
recruitment costs
KNOMAD work program on indicators
 Bilateral remittance costs under Global Remittances
Working Group
 Bilateral recruitment costs for construction workers,
agricultural workers and domestic workers
 Indicators of migrants’ access to rights in different
countries
 “Voices of migrants”
Thank you
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