Migration and Remittances for Development Asia

By Asian Development Bank and The World Bank

Asia and the Pacific has a significant rise in migration: about one in three migrants comes from Asia according to the United Nations. Currently, over 80 million people from Asia and the Pacific live and work outside of their countries of origin. Migration and remittances have both positive and negative effects. For the countries, remittances became an important source of foreign exchange. At the household level, remittances enable families to spend more on education and health. However, migration also has a negative social impact, including the exploitation and abuse of workers. This report explores ways to enhance the welfare of migrant workers as well as ways to improve the productive investments of remittances to support the countries' growth and development.

• Language: English
• Publisher: Asian Development Bank
• Release date: May 1, 2018
• ISBN: 9789292611293

Book preview

CHAPTER 1

Introduction and Overview

Mayumi Ozaki

1.1 Background and Objective of the Report

Asia and the Pacific region experienced a dramatic rise in migration during the last few decades. The wave of migration increased from the 1970s when the oil price surge provided the impetus for the oil-producing Middle East to scale up their infrastructure investments. From the mid-1980s, countries in the region, such as Singapore and the Republic of Korea, started receiving migrant workers. While the region sent out a significant number of highly skilled workers, the majority of migrants from the region are low-skilled or semiskilled workers.

There were over 247 million stock of migrants in the world in 2013. Of the total migrant stock, 80 million, or about 30% of the total migrants, were from Asia and the Pacific region. The top three migrant origin countries are the People’s Republic of China, with emigrant population of 13.8 million; India, 9.6 million; and Bangladesh, 7.5 million. In terms of the percentage of the population, the top three are the Pacific island countries of Samoa, with emigrant population of 60.2% of the total population; Tonga, 53.6%; and Tuvalu, 39.3%. Major migrants’ destination countries include the United States and other high-income Organisation for Economic Co-operation and Development countries, as well as Middle East countries such the United Arab Emirates, Saudi Arabia, Kuwait, and Qatar. The region also has significant numbers of intraregional migrations such as from Bangladesh to India, from Myanmar to Thailand, and from Indonesia to Malaysia.

Corresponding to the rise of migration, remittance inflow to Asia and the Pacific region also drastically increased. The total remittance inflow to the region increased from $104 billion in 2006 to $244 billion in 2016, and reached $252 billion in 2017.¹ The top three remittance-receiving countries are India with $72.2 billion; the People’s Republic of China, $63.9 billion; and the Philippines, $29.7 billion. In terms of the percentage of gross domestic product (GDP), the Kyrgyz Republic was expected to receive 37.1%, followed by Tajikistan with 28.0% and Nepal with 27.2% in 2017.² However, those are officially recorded figures and, if informal remittances—that is, remittances channeled through informally—are included, the actual amount of remittances is considered to be much higher. For many developing countries in the region, remittances are the lifeline of the economy and the most important foreign exchange source.

The region’s growing migration and remittances are expected to continue as long as significant income disparities exist between migrants’ home countries and host economies. However, to date, efforts to understand migration’s dynamics and remittances’ effect on the countries’ long-term development are rather limited.

The Asian Development Bank (ADB) hosted an international forum on Promoting Remittances for Development Finance on 18–19 March 2015.³ The Forum’s objective was to increase the knowledge on migration and remittances in the region, and maximize remittances’ potential for the receiving economies’ growth and development. The Forum identified key policy recommendations. To enhance the benefits of remittances, the countries should (i) enhance access to formal remittance services while bringing informal remittance flows into the formal financial system, (ii) leverage remittances by channeling to productive public and private investments, and (iii) improve impact of remittances by developing innovative remittance-linked financial products.

This report intends to provide updates on emerging subjects on migration and remittances and offers insights on how to maximize the economic benefits of remittances while minimizing the social costs of migration. The remittance-receiving countries’ continued policy attentions on the issues of migration and remittances are essential to capture the benefits of remittances and improve the welfare of migrant workers.

1.2 Organization of the Report

The report consists of eight chapters on the different aspects of migration and remittances across the regions. The key highlights are as follows:

Appropriate policies can enhance the economic benefits of migration for both sending and receiving countries (Chapter 2). Remittances that migrants send can stabilize both household and national incomes (Chapter 3). To better mobilize this resource, however, migrants and their family members who are left behind would gain from financial literacy programs (Chapter 4). More cost-efficient and accessible financial transfer mechanisms would further improve their welfare (Chapter