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Notes from the Global Forum on Migration and Development Athens-2009

November 22, 2009

Civil society representatives in the Global Forum for Migration and Development 2009 (GFMD) taking place in Athens this week (some weeks ago) have recommended to their governmental counterparts to increase efforts for reducing the cost of remittances and make transfer easier and safer.

The money transfer market, known as the remittance market, has flourished during the last twenty years based mostly on developments relating to immigration flows, disparities among national economies and technological innovation.

According to the Economist Intelligence Unit close to one billion people, mostly poor, benefit somehow from remittances. India, China, Mexico and Philippines have been the main destination countries of money transfer in 2007.

The World Bank has calculated remittances sent to developing countries during 2008 up to 338 billion dollars.

The idea, brought up by various participants during roundtable discussions of the forum, for an initiative that will help migrants escape the aggressive profiteering of money transfer agencies received a warm welcome by many delegates in GFMD.

Dilip Ratha, a Senior Economist with the World Bank, argued that the average commission charged on remittances worldwide, which today is past 10 percent, could fall below 1 if appropriate measures are adopted.

Money transferred to developing countries goes mostly for covering immediate needs and living expenses, financing schooling, hygiene and health. “Remittances are the best, and sometimes the only, opportunity many countries have for building up their human capital says Patrick Taran, a migration specialist with International Labour Office in Switcherland.

“Remittances have a direct impact on the quality of peoples’ life” he told. “Eighty percent of families in Seychelles have someone sending money from abroad. As a result the majority of kids don’t have to drop out of school and many attend private ones, thus increasing educational capacity and their chance for better opportunities when they grow up”.

According to Ratha the weight of infants in Sri Lankan households receiving remittances is greater than to the ones who do not.

The decline of this driving force would mean enormous losses for hundreds of thousands around the globe. Thus an urgent question for researchers these days is the estimation of the impact of the global financial recession on money transfers.

Based on data released by central national banks the World Bank estimates that remittance flows to developing countries will fall to 317 billion in 2009, a modest declined. They expect a minor recovery in 2010 and 2011.

Antigoni Liberakis, professor of economics in Panteio University of Athens, says that in order to interpret the impact of recession on remittances one needs to take in account currency balances and other complications of economic activity.

“If a local currency has been recently devaluated, meaning it has lost some of its value towards the dollar, then the transfer of a smaller amount might mean better value than before” she told. “Additionally one should think that the crisis does not affect all sectors of an economy equally, some will face harsher challenges than others”.

Yet again significant risks are still lying ahead. Redirection of migration routes and advancement of restrictive migration policies in the rich western countries, unpredictable exchange rates and the increase of unemployment will continue affecting remittances flows around the globe.

Transfer flows to South Asia have grown more than anywhere else in 2008 but according to Dr. Irudaya Rajan from Centre for Development Studies based in India a decline is expected “since the Gulf countries, where eight million contracted Asian workers are employed are facing economic decline. Ten percent of them will return home next year.”

In spite of the impact of global economic crisis the stock of global migration is increasing making sure that remittances will retain their central economic and social role of fulfilling the hopes and dreams of thousand of people.

International Labour Office www.ilo.org/migrant

Centre for Development Studies http://www.cds.edu/

Global Forum for Migration and Development

http://www.gfmdathens2009.org/index.php?id=9&L=0

Conventional wisdom pictures Europe as the main destination targeted by the biggest wave of migrants. But this is not true. Intra-Asian migration represents nearly 20 percent of all international migration and it is larger than the influxes directed towards Europe from all other regions. Another stereotype challenged by … is emigration from Afrika to Europe. While media have created a picture of mass migration real numbers disprove that. Only three percent of Afrikans live in a country different from where they were born and less than one percent of Afrikans move to Europe.

While those stereotypes are to some extend distorting the proportions of the problem Europe faces, other places receive less attention despite the migration challenges are equal or even wider. A trend that remains largely unnoticed is that South Asian and South East Asian countries account for 60 per cent of temporary workers in the Gulf.

One of the regions facing the serious consequences of the crisis is that of the Gulf Cooperation Council (GCC) countries which accommodate a large concentration of temporary migrant contract workers. The ILO has estimated that 10 per cent of the unskilled workers from the GCC countries will return home in 2009. The return of a large number of migrant workers and the decline of labour flows to the GCC countries will create serious economic problems and adjustments among migrant workers in the countries of destination and migrant households in the labour exporting countries in both South and South East Asia.

Workers are largely unprotected throughout GCC and very vulnerable to working condition and contract abuses, with harassment of domestic workers being one of the most important problems. Access to legal support and courts is inaccessible. Reduction of migrant workers will deteriorate the position of those already at workplace in those countries.

Mr. Jim Clifton and Mrs Neli Esipova from Gallup Inc. presented the results of an international survey for migration, according to which about of 16% of subjects – that roughly translates to 700 million people – would like to move permanently to another country if they had the opportunity. The United States is the most desired destination country, since approximately 24% of subjects, that is more than 165 million adults – name the United States as their desired country of residence.

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