Impact of the Crisis on Remittances to the Arab

Countries

Bachir Hamdouch

University Mohamed V

Rabat ,Morocco

IntroductionRemittances to the developping countries:sizeable and increasing volumes:-1995:$ 58 billion,57% of global remittances-2007: $ 240 billion (1995x4),75% of global remittances-More than ODA , FDI and Private debt flows-More stable... but impact of the crisis ?

Introduction(2)

• Caution :

- These figures should be interpreted with great caution because of the uneven quality of the remittances data .

- Formal remittances only (formal channels).

- Cash remittances only ( remittances in Kinds: 13% of total remittances in Morocco) .

Introduction(3)

• Contents: 2 parts:1.Remittances to the Arab countries 1.1. Arab countries of emigration:2 groups 1.2. Remittances magnitude varies2.Impact of the crisis on remittances to the the Arab countries 2.1. Impact of the crisis on migration flows 2.2. Impact on remittances Conclusion: Policy implications

1.Remittances to the Arab Countries

1.1. Arab Countries of Emigration:2 groups

• Countries (main Arab countries of emigration ):10 countries, 2 groups: Intensity , history and characteristics of the migration and the remittances differs between the 2 groups and inside the 2 groups(petrol exporting versus non exporting):

• First group: Maghreb countries :Morocco, Algeria , Tunisia. Emigration mainly to Western Europe ( France ,Spain,Italy…): becoming permanent immigration from mid seventies.

. Second group: Machrek countries (Egypt, Sudan, Jordan,Palestine,Lebanon,Syria,Yemen)

Emigration mainly to other Arab countries (Gulf +Libya:relatively recent , temporary immigration ?) and North America (old and permanent immigration)…

1.Remittances to the Arab countries(2)

1.2. Remittances magnitude varies:• Volume of remittances• Remittances /GDP

Tables & Graphe

Table 1: Remittance to Arab Countries (1990-2005) (million of US $) Country 1990 1995 2000 2001 2002 2003 2004 2005

Group I Morocco Algeria TunisiaGroup II Egypt Sudan Jordan Palestine Lebanon Syria Yemen

2006352551

428462

449-

1818385

1498

19701120680

3226346

1441626

1225339

1080

2161790796

2825669

184511242110656

1288

3261670927

2911819

2011799

2308653

1295

287710701071

289310862143676

2544610

1294

361417501250

296112182201692

3507676

1270

422124601432

334115802330692

5592855

1283

459519501242

501716792500692

4257855

1283

All Arab countries receiving remittances

11468 12 121 14 353 15 717 16 519 19 435 26 079 24 371

FDI 1394 1628 5699 7514 5779 9575 9115 17 913

ODA 10431 5269 4554 5060 6398 5854 6347 6347

Source: AMF ,IMF,WB.

Graphe 1:Remittances ,FDI and ODA to Arab Countries

0

5 000

10 000

15 000

20 000

25 000

30 000

1990 1995 2000 2001 2002 2003 2004 2005

All Arab countriesreceiving remittancesFDI

ODA

Table 2: Remittances / GDP (%) (1990-2005)

Country 1990 1995 2000 2001 2002 2003 2004 2005

Group IMoroccoAlgeria TunisiaGroup IIEgyptSudanJordanPalestineLebanonSyriaYemen

7.60.64.4

12.10.310.8

-64.72.816.7

5.92.73.8

5.47.1

21.717.511.02.0

20.9

6.51.44.1

2.95.1

21.827.312.73.5

13.3

9.81.24.6

3.25.6

22.420.913.53.2

13.0

7.91.94.6

3.46.6

22.419.513.83.0

12.0

8.22.64.6

3.66.421.617.717.63.110.7

8.42.94.9

4.37.2

20.416.725.73.59.3

8.81.94.3

5.65.9

19.715.419.33.17.9

Source: AMF ,IMF,WB.

Table 3: Source of remittances (%) (2005)

Source Receiving country

Arab Countries

European Union

North America

Other Countries

Morocco Algeria Tunisia Egypt Jordan Lebanon Syria

6.3

85.0

4.0

4.7

7.0

88.0

1.0

4.0

9.7

85.0

1.0

4.3

48.4

11.0

32.0

8.6

85.0

5.0

7.0

3.0

45.0

10.0

25.0

20.0

65.0

5.0

10.0

20.0

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source: AMF ,IMF,WB.

2.Impact of the crisis on remittances to the Arab

countries

• 2.1.Impact of the crisis on migration

- Reduction of activity of immigrants:

increase of unemployment : last in, first out (LIFO) in labour markets.

- Flows of migration:

.less inflows ( better frontiers control, expulsions,readmission agreements )

.more outflows (return migration ?)

2.Impact of the crisis on remittances to the Arab countries(2)

• 2.1.Impact on remittances:

• -Fall of remittances in all labour sending countries …but degree of decline differs; depends on:

.deepness of the crisis in the labour receiving country , his immigration policy …

• .patterns of migration and characteristics of immigrants.

• .evolution of remittances volumes

2.Impact of the crisis on remittances to the Arab countries(3)

• 2.1.Impact on remittances(2):• -Impact on emigration countries depends on:• . Size of remittances: % of GDP, % of households

receiving remittances and % of the remittances in their revenues ( budget) …

• . Uses of remittances: example of Morocco:• Consumption(household current expenditures): 71.0 • Investment : 7.7• Bank deposit: 20.9• Other : 0.4• Total : 100.0

•

Conclusion

• -Impact more or less important :• Impact of the crisis on the economy of the remittances receiving

country;

• Impact of the crisis on remittances (% of remittances on GDP …)

• -Durable ?• Deep economic and financial crisis and deep impact on migration

flows and remittances;

• -Policy implications:

Conclusion(2): Policy implications

• -Migration and development in Arab labour sending countries:• Reduce dependancy on remittances: development is • « made at home »;• Better use of remittances for development ;• Use of know how and migrants expertise for development .• -Migration policy :departure, return,brain drain ….

• -Diaspora policy : maintain and strengthen links with origin country.

• Conclusion:reduce dependancy of development on migration and remittances; use migration and remittances for development.

• •

• •