Transcript TSG/2/7

Capturing information on
remittances and other flows –
a fact-finding in Europe
Violetta Damia
International Technical Meeting
on Measuring Migrant Remittances
24 - 25 January 2005
Overview
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
General considerations
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)
Overview
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
Definitions (BPM5)
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
Overview
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
Fact-finding exercise (WG-ES)
EU Member States were requested to send
available information on
1. Compensation of employees,
2. Workers remittances, and
3. Migrant transfers
data and metadata
if available, with geographical allocation
with the objective to assess the magnitude
of flows at the European level
Overview
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
Results: Meth. Issues (1)
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 (2)
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 (3)
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 (4)
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 (5)
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
Overview
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
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?
Overview
General considerations
Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?
Main conclusions
need 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?