1. MIBE The economics of emerging economies The role of Finance in economic development and the emerging economies development and the emerging economies Gianni Vaggi, April 2014 Finance 1-3 5-REMITTANCES-A

2. Estimates and projections for remittance flows to developing countries, 2009-2016

3. Top 10 recipients of migrant remittances

4. Remittances ANTICICLICAL (increase after “standard” financial crises, natural disaster, conflicts – Mexico 1995, Indonesia and Thailand 1998) Smooth consumption Contribute to stability when local currency devaluates

5. Remittances are anticiclical

6. MACROECONOMIC EFFECTS Securitization of future remittances Use them as collateral to raise financing form international markets to finance development projects Bond issue

7. Who is sending money? The role of DIASPORA(S) COLLECTIVE dimension … …made up by INDIVIDUALS affects policy development

8. Incentives for remittances 1.Holding dual /multiple citizenship 2.Return Initiatives by sending countries 3.Destination Countries’ support for diaspora 4.Incentives for return by host countries 5.Tax exemptions 6.Banks allowed to use $ for local transactions 7.Residents allowed to have a current account in $ 8.Offer bank services to migrants

9. REMITTANCES & DEVELOPMENT POSITIVE effects to finance MACRO CREDIT (investments in social sectors: education, health) NEGATIVE effects because of brain drain Role of Institutions Strengthen bank system

10. Major destination countries for emigrants from Africa, 2010 (share of african emigrants)

11. Top countries of origin of African immigrants in the US, 2010

12. Uses of remittances Investment in pyhisical capital and entrepreneurship Education Health Insurance against adverse shocks Information and communication technology Financial access

13. Use of remittances by receipien housholds in selected african countries, by source of remittances (percent of total remittances)