Impact of the Crisis on Remittances to the Arab Countries Bachir Hamdouch University Mohamed V Rabat,Morocco

Introduction Remittances to the developping countries:sizeable and increasing volumes: -1995:$ 58 billion,57% of global remittances -2007: $ 240 billion (1995x4),75% of global remittances -More than ODA, FDI and Private debt flows -More stable... but impact of the crisis ?

Introduction(2) Caution : - These figures should be interpreted with great caution because of the uneven quality of the remittances data. - Formal remittances only (formal channels). - Cash remittances only ( remittances in Kinds: 13% of total remittances in Morocco).

Introduction(3) Contents: 2 parts: 1.Remittances to the Arab countries 1.1. Arab countries of emigration:2 groups 1.2. Remittances magnitude varies 2.Impact of the crisis on remittances to the the Arab countries 2.1. Impact of the crisis on migration flows 2.2. Impact on remittances Conclusion: Policy implications

1.Remittances to the Arab Countries 1.1. Arab Countries of Emigration:2 groups Countries (main Arab countries of emigration ):10 countries, 2 groups: Intensity, history and characteristics of the migration and the remittances differs between the 2 groups and inside the 2 groups(petrol exporting versus non exporting): First group: Maghreb countries :Morocco, Algeria, Tunisia. Emigration mainly to Western Europe ( France,Spain,Italy…): becoming permanent immigration from mid seventies.. Second group: Machrek countries (Egypt, Sudan, Jordan,Palestine,Lebanon,Syria,Yemen) Emigration mainly to other Arab countries (Gulf +Libya:relatively recent, temporary immigration ?) and North America (old and permanent immigration)…

1.Remittances to the Arab countries(2) 1.2. Remittances magnitude varies: Volume of remittances Remittances /GDP Tables & Graphe

Table 1: Remittance to Arab Countries ( ) (million of US $) Country Group I Morocco Algeria Tunisia Group II Egypt Sudan Jordan Palestine Lebanon Syria Yemen All Arab countries receiving remittances FDI ODA Source: AMF,IMF,WB.

Graphe 1:Remittances,FDI and ODA to Arab Countries

Table 2: Remittances / GDP (%) ( ) Country Group I Morocco Algeria Tunisia Group II Egypt Sudan Jordan Palestine Lebanon Syria Yemen Source: AMF,IMF,WB.

Table 3: Source of remittances (%) (2005) SourceReceiving country Arab Countries European Union North America Other Countries MoroccoAlgeriaTunisiaEgyptJordanLebanonSyria Total100.0 Source: AMF,IMF,WB.

2.Impact of the crisis on remittances to the Arab countries 2.1.Impact of the crisis on migration - Reduction of activity of immigrants: increase of unemployment : last in, first out (LIFO) in labour markets. - Flows of migration:.less inflows ( better frontiers control, expulsions,readmission agreements ).more outflows (return migration ?)

2.Impact of the crisis on remittances to the Arab countries(2) 2.1.Impact on remittances: - Fall of remittances in all labour sending countries …but degree of decline differs; depends on:.deepness of the crisis in the labour receiving country, his immigration policy ….patterns of migration and characteristics of immigrants..evolution of remittances volumes

2.Impact of the crisis on remittances to the Arab countries(3) 2.1.Impact on remittances(2): -Impact on emigration countries depends on:. Size of remittances: % of GDP, % of households receiving remittances and % of the remittances in their revenues ( budget) …. Uses of remittances: example of Morocco: Consumption(household current expenditures): 71.0 Investment : 7.7 Bank deposit: 20.9 Other : 0.4 Total : 100.0

Conclusion -Impact more or less important : Impact of the crisis on the economy of the remittances receiving country; Impact of the crisis on remittances (% of remittances on GDP …) -Durable ? Deep economic and financial crisis and deep impact on migration flows and remittances; -Policy implications:

Conclusion(2): Policy implications -Migration and development in Arab labour sending countries: Reduce dependancy on remittances: development is « made at home »; Better use of remittances for development ; Use of know how and migrants expertise for development. -Migration policy : departure, return,brain drain …. -Diaspora policy : maintain and strengthen links with origin country. Conclusion :reduce dependancy of development on migration and remittances; use migration and remittances for development.