Remittances Data Quality: A review in progress

Evis Rucaj, consultant, World Bank

Content

• Remittances flows – Background• Remittances within the BoP framework• Data Discrepancies• Key problems

Remittances flows

Remittances flows by regions, 2001-2007 (US$ billion)

2001 2002 2003 2004 2005 2006 2007Inflows

Developing countries 95.2 115.5 144.3 164.4 194.8 228.7 280.7 East Asia and Pacific 20.1 29.5 35.4 39.2 46.7 52.9 65.2 Europe and Central Asia 12.4 13.7 15.5 22.2 31.2 38.3 50.4 Latin America and Caribbean 24.2 27.9 36.6 43.3 50.1 59.2 63.1 Middle-East and North Africa 14.7 15.2 20.4 23.0 24.3 25.7 31.3 South Asia 19.2 24.1 30.4 28.7 33.1 39.6 52.1 Sub-Saharan Africa 4.7 5.0 6.0 8.0 9.4 12.9 18.6

Low-income countries 10.9 15.3 16.7 19.6 23.9 30.9 39.9 Middle-income countries 84.3 100.2 127.6 144.8 170.9 197.8 240.7 Lower MICs 57.8 70.6 88.1 94.6 109.8 125.9 160.9 Upper MICs 26.5 29.7 39.5 50.2 61.1 71.9 79.9

High income OECD 50.3 52.9 60.7 67.1 69.2 73.8 85.7 High income non-OECD 1.2 1.1 2.3 3.4 3.9 4.1 4.4

World 146.8 169.5 207.3 234.9 267.8 306.6 370.8 Source: World Bank, 20009

Remittance flows (1)

Remittance flows to Major Remittances Receiving Countries 2007

No. Country Region In US $ billion Regional Share Worldwide share1 India South Asia 35.3 68% 9.5%2 China East Asia & Pacific 32.8 50% 8.9%3 Mexico Latin America & Caribbean 27.1 43% 7.3%4 Philippines East Asia & Pacific 16.3 25% 4.4%5 France High income: OECD 13.7 16% 3.7%6 Spain High income: OECD 10.7 12% 2.9%7 Poland Europe & Central Asia 10.5 21% 2.8%8 Nigeria Sub-Saharan Africa 9.2 50% 2.5%9 Germany High income: OECD 8.6 10% 2.3%

Remittance flows (2)

• Top remittances-receiver as % of GDPPercent of GDP

0% 5% 10% 15% 20% 25% 30% 35% 40%

MoldovaTajikistan

TongaKyrgyz Republic

HondurasLesothoGuyana

LebanonHaiti

JordanJamaicaArmenia

El SalvadorNepal

Bosnia and HerzegovinaAlbania

West Bank and GazaSerbia and Montenegro

PhilippinesGambia, The

NicaraguaCape VerdeGuatemala

Remittances (3)

Top remittances-sender countries

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

United States

Russian Federation

Switzerland

Saudi Arabia

Germany

Impact of Crisis on RemittancesOutlook for remittance flows to developing countries, 2009-11

Base case forecast Low case forecast

2008e 2009f 2010f 2011f 2009f 2010f 2011f

$ billion Developing countries 305 290 299 317 280 280 289

(as share of GDP, %)* (1.9) (1.8) (1.7) (1.6) (1.8) (1.6) (1.4) East Asia and Pacific 70 67 68 72 64 64 65 Europe and Central Asia 53 48 50 53 46 47 50 Latin America and Caribbean 63 60 62 65 58 58 59 Middle-East and North Africa 34 33 34 36 32 32 32 South Asia 66 63 65 70 61 62 64 Sub-Saharan Africa 20 19 20 21 18 18 19

Low-income countries 45 43 45 48 41 42 44 Middle-income countries 260 247 254 269 239 238 245

Growth rate (%) Developing countries 8.8% -5.0% 2.9% 6.3% -8.2% -0.2% 3.2% East Asia and Pacific 6.6% -4.2% 1.9% 5.6% -7.5% -1.3% 2.1% Europe and Central Asia 5.4% -10.1% 4.2% 7.5% -12.7% 1.6% 5.1% Latin America and Caribbean 0.2% -4.4% 2.3% 5.6% -7.7% -1.0% 2.5% Middle-East and North Africa 7.6% -1.4% 2.9% 5.6% -5.2% -0.9% 2.1% South Asia 26.7% -4.2% 3.4% 6.8% -7.3% 0.5% 4.2% Sub-Saharan Africa 6.3% -4.4% 3.5% 6.7% -7.9% 0.0% 3.5%

Low-income countries 13.0% -5.4% 4.4% 7.5% -8.2% 1.6% 4.9% Middle-income countries 8.1% -4.9% 2.7% 6.0% -8.1% -0.5% 2.9%

e = estimate; f=forecast

Source: Migration and Development Brief 8 for the methodology for the estimates for 2008 and forecasts for 2009 and 2010

Remittances within the BoP framework

Remittance flows are usually measured through BoP statisticsOld definition:

– Remittances are usually the sum of a few BoP items• workers remittance • compensation of employees • migrant transfers,

– The migration status of a remitter is critical to measurement of remittance flows

New definition:• Replace workers’ remittances with personal transfers• personal remittance• total remittance• total remittance and transfers to NPISHs

– Remove “migrants transfers” and the concept of migrant from the BOP framework

– Replace migration status with residence status

Data Discrepancies

• Global Discrepancies (inflows-outflows)

• Bilateral Data Asymmetries

• Discrepancies between IMF and WB remittances data

Global Discrepancies

Discrepanies between global inflows and outflows(US$ Billion)

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

2001 2002 2003 2004 2005 2006 2007

Inflows Outflow Gap

Source: World Bank staff estimates and the International Monetary Fund's Balance of Payments Statistics Yearbook 2008.

Key problems

• Sender vs. Receiver countries

• Metadata issues– Concepts and definition inconsistency– Compilation procedures

• Threshold• Data sources• Estimation of informality

Bilateral Asymmetries

• A few or no bilateral data• No comparison framework

– Different channels– Representation of the migration

IMF vs. WB remittances data

Discrepancies on IMF reporting data and WB estimation 2006-2007

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2006 2007 2006 2007

Inflows Outflows

IMF WB

Key issues

• Different methodologies

– IMF: no filling in the missing of the data– 11% of the countries do not report remittances

to the IMF– Many countries report data to the IMF with a

time lag of at least two years – IMF yearbook lags one year