Transcript Ersado_Eng

Europe and Central Asia Region, The World Bank
The Global Economic Crisis, Migration,
and Remittance Flows to Armenia:
Implications for Poverty
International Conference on Migration
Yerevan, Armenia
June 24-25, 2010
-5
Latvia
Ukraine
Lithuania
Armenia
Estonia
Russia
Slovenia
Romania
Montenegro
Moldova
Hungary
Croatia
Bulgaria
Turkey
Slovak Republic
Czech Republic
Georgia
B&H
Serbia
Macedonia, FYR
Belarus
Kazakhstan
Poland
Kyrgyz Republic
Albania
Tajikistan
Turkmenistan
Uzbekistan
Azerbaijan
Annual percentage rate
Europe and Central Asia Region, The World Bank
Armenia was one of the hardest hit countries by the
2008-09 global economic crisis
10
5
0
ECA
-5.23%
-10
-15
-20
2
Europe and Central Asia Region, The World Bank
The impact of the crisis was most severe on the
construction sector
Quarterly GDP, Construction and
Remittances
GDP by sectors (billion AMD)
4000
50
3500
405
40
3000
332
600
30
20
1203
1295
2000
500
10
400
0
981
-10
2009
Industry
Agriculture
Services
Net taxes
Construction
-50
100
Remittances, US$M per qt (right axis)
-60
0
QT309
2008
0
Construction (%, left axis)
QT109
431
-40
QT308
478
Real GDP (%, left axis)
QT108
500
200
-30
QT307
513
QT107
580
-20
QT306
1000
300
QT106
595
QT305
1500
QT105
2500
700
3
Europe and Central Asia Region, The World Bank
Global Economic Crisis
The main transmission channels of the global
economic crisis
Financial Markets
Labor Markets
Migration and
Remittances
Impact on
Household
Wealth
Product Markets
Government Services
4
Europe and Central Asia Region, The World Bank
The crisis affected all income groups more
broadly
Annual percentange change of consumption per
capita
Growth incidence curve, 2008-09
0
0
10
20
30
40
50
60
70
80
90
100
-5
-10
-15
Total
Urban
Rural
Average
-20
-25
Consumption per capita percentile
5
Europe and Central Asia Region, The World Bank
Armenia avoided substantial potential increase in
poverty during the crisis
Overall Poverty (%)
Extreme Poverty (%)
10.0
10.0
9.0
9.0
8.0
7.9
8.0
7.0
7.0
7.0
6.0
6.0
4.9
5.0
4.0
5.0
3.9
4.0
3.1
3
3.0
3.0
2.0
2.0
1.0
1.0
0.0
0.0
Projected Increase Actual Inccrease Potential Increase
Avoided
Projected Increase Actual Inccrease Potential Increase
Avoided
6
Europe and Central Asia Region, The World Bank
Reason #1 for avoiding worse outcomes: Public
mitigation response measures
More Households Relied on Government
Support than other Coping Strategies
Poverty reducing impact of the public transfers
increased
50
Headcount Poverty (%)
45
40
45.7
35
38.9
30
25
20
26.5
23.8
15
10
19.2
5
15.1
0
4.1
With SP Without SPDifference With SP Without SPDifference
2008
2009
Net
Impact
7
Europe and Central Asia Region, The World Bank
Reason #3: Households’ own coping strategies
(%, households)
Withdrew or postponed admission to school,…
Started working odd jobs
Sent a member of household to work elsewhere as…
Increased use public transport or walking
Decreased amount of food consumption
Stopped buying some non-food items
Reduced or stopped buying medicines
Reduced or stopped visits to healthcare centers
Starting meeting with friends less
Replaced consumption of expensive food items…
Started less use of the entertainment
0
Affected
10
20
30
40
50
60
70
Not Affected
8
Europe and Central Asia Region, The World Bank
Reason #3: Resilience of remittance flows, particularly
those from non-migrant resources, and high incidence of
remittances among the poor
Income Sources (%, total income)
Wage
Self employment
Pension
Family Benefit
Agriculture
7
1
7
3
1
10
30
9
31
11
9
9
5
12
4
7
5
19
17
19
6
6
6
47
48
Q2
Q3
6
22
Q1
2008
Other transfer
Other sources
4
1
8
10
1
7
6
5
8
1
8
6
6
8
5
23
24
23
3
3
4
48
45
45
47
Q4
Q1
Q2
Q3
6
42
Remittance
2009
9
Europe and Central Asia Region, The World Bank
Who benefits from migration and remittances?
International Experience
 Individuals and Families:
As migrants tend to come typically from non-poor
households, direct beneficiaries are lower-middle to
middle-income families
The poor could benefit from remittances mainly in
subsequent rounds via multiplier effects
 Local Economy
Increased consumption and investment spending.
 National Economy
Large share of GDP
Source of foreign exchange
Europe and Central Asia Region, The World Bank
Migration, remittances and poverty impact
 Migration:
Why do people migrate (within or outside home country)
Where are the destinations?
What are their main economic activities at the
destination?
What are the characteristics of migrants (origin,
education, age, gender, etc.)
 Remittance flows:
Sources, size
To whom they accrue
Poverty Impact
11
Europe and Central Asia Region, The World Bank
After a steady increase, migrant workers abroad
decreased in 2009 …
140,000
Tavush
120,000
Vayots Dzor
Sjunik
100,000
Shirak
80,000
Kotayk
Lori
60,000
Gegharkunik
40,000
Armavir
Ararat
20,000
Aragatsotn
Yerevan
2005
2006
2007
2008
2009
Europe and Central Asia Region, The World Bank
….but internal migration surged, particularly out of
Yerevan
12,000
Tavush
10,000
Vayots Dzor
Sjunik
8,000
Shirak
Kotayk
6,000
Lori
Gegharkunik
4,000
Armavir
Ararat
2,000
Aragatsotn
Yerevan
2005
2006
2007
2008
2009
Europe and Central Asia Region, The World Bank
Construction is the main sector of employment
for Armenia’s migrants abroad (2009)
Construction
32
Trade
Manufacturing
Agriculture
Other
10
1
3
8
6
5
2
79
54
Domestic
Abroad
14
Europe and Central Asia Region, The World Bank
Migrants have similar education profile and are
predominantly men
Education profile (%)
Gender profile (%)
Female
Primary and Below
Lower Secondary
Upper Secondary
Vocational/Secondary
Male
Higher Education
19
18
22
26
53
44
6
1
Migrant
9
2
All
48
91
52
9
Migrant
All
Europe and Central Asia Region, The World Bank
Russia is the destination for most Armenian
migrant laborers
Share of migrant workers destined to Russia (%)
90
Reasons to go to Russia
To Work
To Look for Work
85
80
16
22
75
70
84
78
65
60
2005
2006
2007
Yerevan
Other Urban
2008
Rural
2009
2008
2009
Europe and Central Asia Region, The World Bank
The share of migrants to Russia decreased; to Yerevan
and marzs increased during the crisis
100
100
8
11
10
8
8
90
90
5
15
13
5
1
0
9
10
18
6
5
28
80
80
40
70
70
60
60
72
50
84
81
82
83
50
71
57
96
94
77
91
40
40
84
9
10
0
0
20
10
5
3
5
3
3
6
3
5
11
2005
2006
2007
2008
2009
Yerevan
Marzs
Russia
Other Countries
0
19
51
9
20
32
80
30
30
70
83
10
7
21
25
20
14
1
9
8
2
5
4
0
2
2
1
0
0
0
2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009
Yerevan
Aragatsotn
Yerevan
Armavir
Marz
Gegharkunik
Russia
Kotayk
Sjunik
Other Countries
17
Europe and Central Asia Region, The World Bank
Receipts of non-migrant remittances increased;
those from migrants decreased
Households with migrant worker receiving
remittances (%)
90
2008
Households with no migrant worker, but receiving
remittances (%)
25
2009
2008
2009
80
20
70
60
15
50
40
10
30
20
5
10
0
0
18
Europe and Central Asia Region, The World Bank
Amount of remittance flows decreased overall (9%), but
increased for non-migrant households (15%).
(AMD per household per month)
All
Households Receiving Remittances
Households
All
Migrant
Non-migrant
2005
6,175
31,475
49,118
25,394
2006
6,431
34,914
50,774
26,909
2007
9,033
4,428
65,338
32,860
2008
10,147
47,387
63,587
35,297
2009
9,217
46,605
61,240
40,679
Change (2008-09) -9%
-2%
-4%
+15%
Migrant remittances larger than non-migrant remittances, but
less frequent
19
Europe and Central Asia Region, The World Bank
Official remittances declined by over $330 million (or
31 percent)
$1,200,000,000
$1,000,000,000
ODA
FDI
2002
2003
Remittances
$800,000,000
$600,000,000
$400,000,000
$200,000,000
$2000
2001
2004
2005
2006
2007
2008
2009
20
Europe and Central Asia Region, The World Bank
In the absence of remittances, poverty incidence
would be considerably higher
45
40
40
35
35
35
34
31
30
30
30
29
27
27
25
25
24
20
15
10
5
5
5
4
5
7
6
0
2004
2005
2006
Actual
W/o Remittances
2007
2008
2009
Poverty Impact
Importance of remittance increased during the crisis, esp. in
Yerevan
21
Europe and Central Asia Region, The World Bank
Huge poverty reduction impact among remittance
recipients (poverty continued to decline despite the crisis)
70
63
60
57
54
50
52
51
49
47
44
37
40
35
31
29
30
20
18 16
18 17
13 12
10
0
Actual
Without
All Remittances
Poverty
Impact
Actual
Without
Poverty
Impact
Migrant Remittances
2008
Actual
Without
Poverty
Impact
Non-migrant Remittances
2009
Remittances do appear to be going to some of the most
vulnerable households in Armenia!
22
Europe and Central Asia Region, The World Bank
Remittance receiving households tend to have
lower labor or other earnings
(AMD per household per month)
Source of
Income
Wage
Self
employment
Pension
Family Benefit
Agriculture
Households Not
Receiving
Remittances
(a)
77,018
Households
Receiving
Remittances
(b)
28,419
(b/a) (%)
37
6,149
2,703
44
19,886
3,112
14,043
2,795
71
90
5,168
1,612
31
23
Europe and Central Asia Region, The World Bank
…but households receiving remittances do spend more
on education, health and other goods and services
(AMD per household per month)
Source of
Income
Health
Education
Household
Goods
Durables
Clothing
Households Not
Receiving
Remittances
Households
Receiving
Remittances
(a)
(b)
(b/a) (%)
10,011
126
5,593
171
7,650
103
7,957
3,269
7,413
10,493
10,849
4,396
5,909
103
134
24
Europe and Central Asia Region, The World Bank
Remittance receiving households have higher rate
of saving, esp. in rural areas
16
25
All
(%, households)
14
Rural
(%, households)
20
12
10
15
8
10
6
4
5
2
0
0
2005
2006
2007
2008
2009
2005
2006
2007
2008
Households w/o Remittances
Households w/o Remittances
Households w/ Remittances
Households w/ Remittances
2009
25
Europe and Central Asia Region, The World Bank
Summary and final remarks
 There was appreciable decline in external migration,
and increase in both internal and external return
migration
Most are destined to Russia (80%) and mainly engaged in
the construction sector (85%)
 Although decreased, remittance flows remained
relatively more resilient
 A significantly larger share of households receive
remittances (>60%) from individuals outside of the
immediate family
Incidence of non-migrant remittances increased during the
crisis
…but the amount of non-migrant remittances are smaller
than migrant remittances
Europe and Central Asia Region, The World Bank
Summary and final remarks (2)
 Remittances play an important role in poverty
reduction and accrue to some of the poorest and
most vulnerable households
Huge poverty reduction impact on recipients
Higher rate of savings
More spending on education, health and other goods and
services
 …but there is evidence that remittance flows may
discourage labor supply
Remittance recipient households borrow less