How to produce statistics on Remittances? Nordic meeting for Trade in Goods and Services/BoP – 18 September in Tórshavn, Faroe Island Christian Surtin

Remittances according to BPM6 “Remittances represent household income from foreign economies arising mainly from the temporary or permanent movement of people to those economies.” “Remittances include cash and noncash items that flow through formal channels, such as via electronic wire, or through informal channels, such as money or goods carried across borders. They largely consist of funds and noncash items sent or given by individuals who have migrated to a new economy and become residents there, and the net compensation of border, seasonal, or other short- term workers who are employed in an economy in which they are not resident.”

… ” For many economies, remittances represent a sizable and stable source of funds that sometimes exceed official aid or financial inflows from foreign direct investment. Remittances may have a significant impact on poverty reduction and can finance economic growth in receiving economies.”

Three categories of remittances are defined (BPM6 extract) (a) Personal remittances. From the perspective of the recipient economy, personal remittances are defined as: Personal transfers receivable; + Compensation of employees receivable; – Taxes and social contributions payable (related to compensation of employees); – Transport and travel expenditures payable by residents employed by nonresidents + Capital transfers receivable from households. (b) Total remittances. From the perspective of the recipient economy, total remittances are defined as Personal remittances receivable; + Social benefits receivable. Although conceptually, total remittances include nonlife insurance transactions (net nonlife insurance premiums and nonlife insurance claims), these transactions are excluded on practical grounds. (c) Total remittances and transfers to NPISHs. From the perspective of the recipient economy, this category is defined as: Total remittances receivable; + Current transfers receivable by NPISHs; + Capital transfers receivable by NPISHs. Current and capital transfers to NPISHS are generally recorded under miscellaneous current transfers or other capital transfers.” mandatory

Standard components (BPM6) Personal transfers - workers´remittances (supplementary item) Compensation of employees

Data Sources (the IMF guide on remittances) International Transactions Reporting Systems (ITRS) Direct Reporting by Money Transfer Operators (MTO) Surveys of Households Indirect Data Sources (Demographic-, Econometric-, Residual models)

Attributes (the IMF guide on remittances) Date of transaction Direction of flows (outbound or inward) Country of destination (for outward flows) / of origin (for inward flows) Transaction amount Transaction purpose In addition Source of income Nationality

The Swedish method for Personal transfers Before 2003 – settlement system (ITRS) – same values every year 2013 – MTO-method for outflow Inflow is estimated as a relation to outflow Undercoverage (bank payments, informal channels) Frame – registers of operators hold by The Swedish Financial Supervisory Authority (Finansinspektionen) Lack of information on nationality, purpose and source of income - overcoverage (foreign residents, trade in goods/services, financial/capital transactions) - workers´remittances hard to estimate - geographical breakdown – some problems

The Swedish method for Compensation of employees Undercoverage - the trade in services survey is not designed for compensation of employees - no information about inflow (Inflow is estimated as a relation to outflow) Improved estimation model is in progress based on: - statement of income - national registration - mirror statistics

Characteristics of remittents (from the Swedish Living Standards Servey) Share of foreign-borns in Sweden that remit is relatively low (10%> 6000 sek/year)due to high level of family immigration Significant characteristics of remittents: Part of family left in country of origin Income and employment Residence time (16-20 years in Sweden) years old (inverted U-curve) Other Asia > Other Europe>Middle East&Africa>Latin America>EU countries Asylum seekers>labour immigrants

Questions to participating countries The relation between inflow and outflow? - Personal transfers? - Compensation of employees? The share of workers´remittances to personal transfers? - outflow? - inflow?