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  • Tendances des couts des transferts:Average of corridor level remittance costs weighted by updated bilateral remittance estimates of Ratha and Shaw (2007) for a balanced sample of country corridors starting from 2008 onwards. Country corridors and RSPs where exchange rates applied to the transaction were not provided (including corridors originating in Russia) were excluded from the sample.Cout moyen de l’envoi de transferts vers les régions en développementAverage of corridor level remittance costs weighted by updated bilateral remittance estimates of Ratha and Shaw (2007). Country corridors and RSPs where exchange rates applied to the transaction were not provided (including corridors originating in Russia) were excluded from the sample
  • ILC Resolution from 2004 regarding the discussion on migrant workers (par. 17):“Promotion of policies that maximize the contribution of migration to development is another essential component of a comprehensive policy to address the global context of migration. Among urgent required components are measures to reduce the costs of remittance transfers as well as developing incentives to promote productive investment of remittances.”

Money transfers and financial education1 Money transfers and financial education1 Presentation Transcript

  • Money transfers and financial education Migration in ACP Countries :Promoting Development and Enhancing Protection
  • ObjectivesOverview of the main aspects of the phenomenon of moneytransfers, the latest trends and challenges with respect todevelopmentReflection on possible actions that could be taken toimprove the management of transfers and their impact oneconomic and social developmentSpecific focus on financial education as an area of possibleaction to be developed concerning migrants and theirfamilies Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Money transfers  Definition  Trends Links to development Migration in ACP Countries :Promoting Development and Enhancing Protection
  • DefinitionMigrant remittances calculate the net financial flow between amigrant and a household in their country of origin, regardless ofthe length of their migration and independently of migrant status(employee or self-employed, regular or otherwise, etc.) andsources of income (wages, welfare, etc.)Transfers to developing countries reached USD 351 billion in2011, an increase of 8% compared to 2010. Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Money transfer flows to developing countries have regained theirdynamism, but should increase at a slower pace in 2012-14 Source: World Bank Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Leading countries in terms of destination of transfersTop 10 recipients of Top 10 recipients of migrantmigrant remittances remittances as a share of GDP Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Sources of transfers by region in 2010 Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Average cost of sending transfers to Trends in the costs of transfers developing regions Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Significance for the ILO: transfers as a workers’ rightConventions 97 and 143:“Any Member for whom this convention is in force undertakes to allow, taking into consideration the limits set by national legislation on the export and import of currencies, the transfer of any part of the earning and savings of migrant workers which they wish to transfer”.ILO Multilateral Framework on Labour Migration (Migration – ILC 2004)15.4. promoting and providing incentives for enterprise creation and development, including transnational business initiatives and micro-enterprise development by men and women migrant workers in origin and destination countries;15.5. providing incentives to promote the productive investment of remittances in the country of origin;15.6. reducing the costs of remittance transfers, including by facilitating accessible financial services, reducing transaction fees, providing tax incentives and promoting greater competition between financial institutions;15.7. adopting measures to mitigate the loss of workers with skills Migration in ACP Countries : Promoting Development and Enhancing Protection
  • ILO declaration of principles: Microfinance for Decent Work (GB294; Nov.2005),The Governing Body gave the ILO the mandate to: “Facilitate the access of migrantworkers to remittances, through financial literacy programmes, measures to reducetheir costs and risks and leverage remittances for investment via links to micro lendingprogrammes”.Global Jobs PactCalls on states to act: to “build a stronger, more globally consistent supervisory andregulatory framework for the financial sector so that it serves the real economy andpromotes sustainable enterprises and decent work and offers better protection forindividual savings and pensions”.Result 7 of 2010 – 2011 P&BIndicator 7.2. Number of Member States that, with ILO support, adopt gender-sensitivelabour migration policies and practices that reflect the ILO Multilateral Framework witha view to promoting productive employment and decent work for migrant workers. Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Group WorkUnderstanding the determining factorsand positions of the main stakeholders in the remittance cycle Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Positive impacts of money transfers• Increases the income of the country• Improves solvency and access to international capital markets• Supports entrepreneurial activity• Represents sustainable and counter-cycle sources of income• Contributes to savings• Creates demand for local goods and services• Stimulates cross-border trade and investments• Reduces poverty• Feeds into household savings and investment Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Negative impacts• Increases the demand for imported goods, causing an appreciation of currency and reduced competition for exports• Inflation• Increases inequalities between households• Causes dependence and “moral hazard”• Increases property prices• Indirectly, loss of skilled labour• Cannot offset a failure to act by the State or foreign development aid Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Remittances and development: key issues• Reduces informality, improves competition and reduces costs• Allows financial intermediation projects with cooperatives and MFIs• Creates an interest for banking establishments to offer a larger range of financial services• Offers products that include education and health• Supports projects that improve investment opportunities in the country of origin• Technical assistance for financial education• Implicates governments and the private sectors as activators of the business environment Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Circuits chosen and impact on developmentInformal circuits linked to consumption: increase inhousehold income has an effect on developmentFormal circuits: greater impact, a multiplying effectand associated financial services • Savings: allows an injection of capital that can be loaned to investors • Loans: property or business start-up • Health insurance Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Work with migrants and their familiesObjective:Increase the ability of migrant workers and their familiesto make rational and enlightened decisions on the use oftransfersMeans:• Transparency of information• Consumer protection• Financial inclusion, including financial education• Financial and other incentives for investments Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Work with financial institutionsObjective:Create a competitive payment system market with suitableand innovative financial servicesMeans:• Adapted legal and statutory environment• Technical assistance to support innovations• Support for the interplay between financial and non- financial services Migration in ACP Countries : Promoting Development and Enhancing Protection
  • Thank you for listening Migration in ACP Countries : Promoting Development and Enhancing Protection