capturing information on remittances and other flows – a fact-finding in europe violetta damia 24...
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Capturing information on remittances and other
flows – a fact-finding in Europe
Violetta Damia
24 - 25 January 2005
International Technical Meeting on Measuring Migrant Remittances
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
Overview
Workers’ remittances:
2nd largest source of external finance for developing countries
size relevant to GDP vs. low volatility shown
conceptual framework given by IMF BoP Manual (5th edition)
General considerations
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
Overview
Compensation of employees: the earnings of border, seasonal, and other workers paid by an employer resident in one economy to employees resident in other economies paid in kind and/or in cash recorded under current account / income
Workers’ remittances: the remittances of funds to families abroad by residents (living in the host economy for 12 months or more)
recorded under current account / current transfers
Migrants’ transfers: the net worth of migrants at the time of migration (cash and goods transferred) –
recorded under capital account / capital transfers
Definitions (BPM5)
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
Overview
EU Member States were requested to send available information on
1. Compensation of employees,
2. Workers remittances, and
3. Migrant transfers
with the objective to assess the magnitude of flows at the European level
Fact-finding exercise (WG-ES)
data and metadata
if available, with geographical allocation
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
Overview
Compensation of employees:
The information reported is
1. partly collected by settlement systems, tax and social security systems and the resident credit institutions
2. partly estimated based on the previous years, number of foreign workers, average wages, social contributions and census
Results: Meth. Issues (1)
Compensation of employees:
Main caveats:
1. high thresholds
2. diversity of methods to transfer money
3. 1-year-rule : difficult to apply in practice
difficulty to differentiate between compensation of employees and workers’ remittances
Results: Meth. Issues (2)
Workers’ remittances:
The information reported is
1. mainly collected by settlement systems, by banks and post offices, through household surveys, from foreign exchange reports
2. difficult to estimate
Results: Meth. Issues (3)
Workers’ remittances:
Main caveats:
1. high thresholds
2. diversity of methods of money transfers
3. the presence of illegal foreign workers
4. 1-year-rule : difficult to apply in practice
Results: Meth. Issues (4)
Migrant transfers:
The most difficult to measure
difficulty for most countries to monitor the flows separately
hence migrants transfers are recorded under workers’ remittances
the estimations are based on number of migrants and the average assets transferred
Results: Meth. Issues (5)
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
Overview
Results: Magnitude of flows (1)
Results: Magnitude of flows (2)Compensation of employees:
mainly EU25: temporal, seasonal and border workers
American continent (especially the debit side)
Workers’ remittances:
mainly EU25
debit side: balanced distribution worldwide
Migrant transfers:
even distribution of low level flows: underestimation?
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
Overview
Main conclusionsneed to fill the recording gaps so as to have a
more concrete measurement
review thresholds applied
importance to follow harmonised methods to ensure comparability (based on BPM5)
further improvement of BPM5 in terms of definitions
encouragement for the utilisation of formal channels by reducing transfers’ costs
increase quality of information (underestimations)
development of estimation methods for capturing reality (e.g. refinement of households surveys)
Questions?