The World Bank today announced the establishment of the Global Knowledge Partnership on Migration and Development (KNOMAD), envisioned to become a global hub of knowledge and policy expertise on migration issues.
KNOMAD was initiated in response to the rapid growth in migration and remittances over the last decade. Nearly one billion people – that is, one out of every seven persons on the planet – have migrated internally and across international borders in search of better opportunities and living conditions, with profound implications for development.
Remittance flows to developing countries have more than quadrupled since 2000. Global remittances, including those to high-income countries, are estimated to have reached $514 billion in 2012, compared to $132 billion in 2000.
"Migration and remittances offer a vital lifeline for millions of people and can play a major role in an economy's take-off. They enable people to partake in the global labor market and create resources that can be leveraged for development and growth. But they are also a source of political contention, and for that very reason deserving of dispassionate analysis,” said Kaushik Basu, the World Bank’s Chief Economist and Senior Vice President for Development Economics, as he participated in an event to mark the launch of KNOMAD. “The World Bank has played a critical role in migration and remittance research and KNOMAD will be critical in taking this agenda forward."
Established with the support of Switzerland and Germany, KNOMAD aims to generate and synthesize knowledge on migration issues for countries; generate a menu of policy choices based on multidisciplinary knowledge and evidence; and provide technical assistance and capacity building to sending and receiving countries for the implementation of pilot projects, evaluation of migration policies, and data collection.
The program will focus on a number of key thematic areas: improving data on migration and remittance flows; skilled and low-skilled labor migration; integration issues in host communities; policy and institutional coherence; migration, security and development; migrant rights and social aspects of migration; demographic changes and migration; remittances, including access to finance and capital markets; mobilizing diaspora resources; environmental change and migration; and internal migration and urbanization. It will also address several cross-cutting themes, such as gender, monitoring and evaluation, capacity building, and public perceptions and communication.
Drawing on global expertise, KNOMAD’s outputs will be widely disseminated and will be available as global public goods.
According to the latest edition of the World Bank’s Migration and Development Brief, issued today, officially recorded remittance flows to developing countries grew by 5.3 percent to reach an estimated $401 billion in 2012. Remittances to developing countries are expected to grow by an annual average of 8.8 percent for the next three years and are forecast to reach $515 billion in 2015.
Given that many migrants send money and goods through people or informal channels, the true size of remittances are much larger than these official figures.
The top recipients of officially recorded remittances for 2012 are India ($69 billion), China ($60 billion), the Philippines ($24 billion), Mexico ($23 billion) and Nigeria and Egypt ($21 billion each). Other large recipients include Pakistan, Bangladesh, Vietnam, and Lebanon.
As a percentage of GDP, the top recipients of remittances, in 2011, were Tajikistan (47 percent), Liberia (31 percent), Kyrgyz Republic (29 percent), Lesotho (27 percent), Moldova (23 percent), Nepal (22 percent), and Samoa (21 percent).
“The role of remittances in helping lift people out of poverty has always been known, but there is also abundant evidence that migration and remittances are helping countries achieve progress towards other Millennium Development Goals (MDGs), such as access to education, safe water, sanitation and healthcare,” said Hans Timmer, Director of the Bank’s Development Prospects Group.
However, the high cost of sending money through official channels is an obstacle to the utilization of remittances for development purposes, as people seek out informal channels as their preferred means for sending money home. The global average cost for sending remittances was 9 percent in the first quarter of 2013, broadly unchanged from 2012.
The Brief also discusses efforts to feature migration and remittances in the Post-2015 Development Framework that is currently being discussed as we approach 2015, the target date for reaching the MDGs.
“Migration is a defining issue for global development,” said Dilip Ratha, Manager of the World Bank’s Migration and Remittances Unit and head of KNOMAD. “This underscores the need for an initiative such as KNOMAD, which will generate evidence-based research to facilitate constructive debate and discussion on migration issues with the aim of developing practical policy options for sending and receiving countries.”
The East Asia and Pacific region received an estimated $109 billion in remittances in 2012, about $5 billion lower than the estimate we made at the end of 2012, due mainly to a downward revision of inflows to China by the same amount. The first half of 2012 saw a substantial decline in remittances to China, which may be a reflection of fewer funds being channeled through officially recorded remittances into investments such as property, as the government seeks to dampen the overheated real estate market. Nevertheless, remittance inflows to the region were an increase of 2.5 percent over the 2011 value of $106 billion.
Remittances to Eastern Europe and Central Asia are estimated to have declined by 3.9 percent to about $40 billion in 2012, partly due to the depreciation of the euro against the US dollar (lowering remittances in dollar terms). Continued strong growth in oil-exporting Russia underpinned buoyant remittances to Tajikistan and Ukraine, while weak conditions in the Euro Area depressed remittances to Romania, Russia and Serbia. With officially recorded remittance inflows of about $6.5 billion in 2012, the Ukraine is the largest recipient in the region, followed by Russia ($5.7 billion), and Tajikistan ($3.7 billion). As economic conditions improve in Europe, and growth in Russia remains robust, officially recorded remittances to the region are expected to rebound in 2013-2015, exceeding the pre-crisis peak in 2014 and reaching US$52 billion in 2015.
The Latin America and Caribbean region saw a slight increase in remittances in 2012 to $62 billion, still more than $2.5 billion below the peak reached in 2008. Mexico, which received $23 billion in 2012, accounts for 56 percent of total remittances to the region, followed by Brazil ($4.9 billion). The US is the largest source of remittances to the region, accounting for 73 percent of the total inflows in 2012. Although the potential impact of immigration reform currently being considered in the US remains unclear, improvements in the US housing market and faster job creation this year are projected to underpin strong growth in officially recorded remittances to Latin America in 2013-2015, rising to over US$81 billion in 2015.
With remittance inflows of an estimated $49 billion in 2012 (an upward revision of about US$2 billion from previous estimates), the Middle East and North Africa (MENA) region experienced the fastest expansion of remittances in 2012, growing by 14.3 percent over 2011. Egypt, which accounted for over 40 percent of total remittance inflows to the region, has seen a six-fold increase in remittances over the last eight years, making it the largest recipient in the region, ahead of Lebanon, Morocco, Jordan and Tunisia. Although Egypt has a large stock of highly skilled expatriates in the US, the UK and Europe, about two-thirds of its migrants are working in oil rich countries within the MENA region. Remittance flows to the MENA region are expected to grow by 5-6 percent, rising to $58 billion in 2015.
Officially recorded remittance flows to South Asia are estimated to have increased sharply by 12.8 percent to $109 billion in 2012. This follows growth averaging 13.8 percent in each of the previous two years. India remains the largest recipient country in the world, receiving $69 billion in 2012. In addition to large numbers of unskilled migrants working mainly in the oil-rich Gulf Cooperation Council (GCC) countries, India also has a large skilled diaspora the US and other high-income countries. Flows to Bangladesh, Pakistan and Nepal have also been robust, helped by strong economic growth in the GCC and India. Remittances to the region are projected to remain buoyant in the coming years, reaching $140 billion in 2015.
Remittance flows to Sub-Saharan Africa have been recovering from the contraction associated with the global financial crisis, but growth has been modest. In 2012, the region is estimated to have received about $31 billion in remittances, only about a 1 percent increase over 2011. Nigeria is by far the largest recipient of remittances in the region, accounting for about 67 percent of the inflows to the region in 2012, followed by Senegal and Kenya. Zero growth in flows to Nigeria in 2012 is partly attributable to the feeble labor market recovery of its major remittance source countries in Europe, the UK in particular. Remittance flows to Nigeria and the rest of the region are expected to grow significantly in the coming years to reach about $39 billion in 2015.