Migration, Post-2015 Development Goals, And the KNOMAD Dilip Ratha World Bank New York January 24, 2013

Outline  Migration and development  Migration and development goals  KNOMAD

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

Remittances to developing countries estimated to reach $406 bn in 2012 Source: Development Prospects Group, World Bank

Top remittance recipients in 2012 $ million, 2012e as % of GDP, 2011

Remittances have reduced poverty in Nepal Source: World Bank, DFID, ADB Study 2006, Glinskaya and others 2006

Remittances helped reduce poverty in Sri Lanka % of Sri Lankan households that moved up to a higher income decile after receiving remittances, * Income Decile Source: De and Ratha (2012)

Remittances tend to rise following crisis, natural disaster, or conflict Remittances as % of private consumption Note: Crisis refers to Asian financial crisis in

Significant share of remittances spent on human capital and physical capital investments varies by level of development Percent of remittances from outside Africa * Uganda excludes unspecified use of remittances (2/5 th of total remittances) Source: Africa migration project household surveys; GLSS

Migration associated with higher educational attainment

Migration associated with access to banking

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

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 Sub-Saharan Africa699 Middle-East & N. Africa187 East and South Asia727 Western Europe-88 North America-12 Eastern 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

Cost of remittances can be reduced 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)

International Remittances Agenda 1. Monitoring, analysis, projection -Size, corridors, channels -Counter-cyclicality -Effects on poverty, education, health, investmen -Policy (costs, competition, exchange controls) 2. Retail payment systems -Payment platforms/instruments -Regulation (clearing and settlement, capital adequacy, exchange controls, disclosure, cross- border arbitration) -Anti-money laundering/Countering financing of terrorism (AML/CFT) 3. Financial access -Deposit and saving products -Loan products (mortgages, consumer loans, microfinance) -Credit history for MFI clients -Insurance products 4. Capital market access -Private banks and corporations (securitization) -Governments (diaspora bonds) -Sovereign credit rating

The wealth of the diaspora can be mobilized through diaspora bonds Diaspora size (millions) Estimated savings ($ billions, 2009) Developing countries East Asia & Pacific Europe & Central Asia Latin America & Caribbean Middle East & North Africa Sub-Saharan Africa South Asia Source: Ratha and Mohapatra 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 implications 1. 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 1 st yr, 5 afterward Tuition $30K per year, for 4 years; 25 local students trained free Revenue 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 T HEMATIC W ORKING G ROUPS 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 Groups 1. Data 2. High-skilled labor migration 3. Low-killed 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 migration 8. Demography and migration 9. Remittances, incl. access to finance and capital markets 10. Mobilizing diaspora resources 11. Environmental change and migration 12. 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 –  Exit

How might KNOMAD contribute to the Post-2015 development agenda?

Data and other resources are available at