MIGRATION AND DEVELOPMENT BRIEF 28 OCTOBER 2017 MIGRATION AND REMITTANCES Recent Developments and Outlook Special Topic: Return Migration Migration and Development Brief reports an update on migration and remittance flows as well as salient policy developments in the area of international migration and development. The Global Knowledge Partnership on Migration and Development (KNOMAD) is a global hub of knowledge and policy expertise on migration and development. It aims to create and synthesize multidisciplinary knowledge and evidence; generate a menu of policy options for migration policy makers; and provide technical assistance and capacity building for pilot projects, evaluation of policies, and data collection. KNOMAD is supported by a multi-donor trust fund established by the World Bank. Germany’s Federal Ministry of Economic Cooperation and Development (BMZ), Sweden’s Ministry of Justice, Migration and Asylum Policy, and the Swiss Agency for Development and Cooperation (SDC) are the contributors to the trust fund. The views expressed in this paper do not represent the views of the World Bank or the sponsoring organizations. All queries should be addressed to KNOMAD@worldbank.org. KNOMAD working papers, policy briefs, and a host of other resources on migration are available at www.KNOMAD.org. MIGRATION AND DEVELOPMENT BRIEF 28 Migration and Remittances: Recent Developments and Outlook Special Topic: Return Migration October 2017 Contents SUMMARY................................................................................................................................................................. V 1. TRENDS IN GLOBAL REMITTANCE FLOWS......................................................................................................1 1.1. Remittances to Rebound in 2017................................................................................................................ 1 Trends in the Cost of Remittances............................................................................................................. 4 1.2.   xclusivity Contracts Hinder Competition on the Remittance Market..................................................... 4 1.3. E  e-risking by Commercial Banks Impacts Remittance Costs................................................................... 5 1.4. D 2. MIGRATION ISSUES.............................................................................................................................................7 L arge Movements of Refugees and Migrants Taper in the European Union............................................ 7 2.1.  2.2. Worker-Paid Recruitment Costs................................................................................................................. 9 2.3. Global Compact on Migration..................................................................................................................12 3. SPECIAL TOPIC: RETURN MIGRATION............................................................................................................15 Conceptualizing and Quantifying Return Migration.................................................................................15 3.1.  Forced Return—Challenges for Destination Countries...........................................................................17 3.2.   orced Return—Challenges for Origin Countries....................................................................................18 3.3. F  valuating Forced Return Policies.............................................................................................................18 3.4. E 3.5. Voluntary Return........................................................................................................................................19 4. REGIONAL TRENDS IN MIGRATION AND REMITTANCE FLOWS...............................................................21  emittances to the East Asia and Pacific (EAP) Region to Rebound in 2017.......................................... 21 4.1. R  emittances to Europe and Central Asia (ECA) Projected to Increase in 2017...................................... 22 4.2. R  emittance Flows into Latin America and the Caribbean to Continue Rising in 2017........................... 23 4.3. R  emittances to the Middle East and North Africa (MENA) Region to Recover in 2017......................... 25 4.4. R  emittances to the South Asia Region (SAR) to Remain Modest in 2017............................................... 26 4.5. R  emittances to Sub-Saharan Africa Accelerated in 2017........................................................................ 27 4.6. R APPENDIX A. DATA NOTES AND FORECAST METHODOLOGY.....................................................................33 References....................................................................................................................................................... 36 Endnotes.......................................................................................................................................................... 39 List of Figures  emittance Flows to Developing Countries Are Larger than Official Development Assistance and Figure 1.1. R More Stable than Private Capital Flows, 1990–2019......................................................................................1 Outward Remittances from Russia and Ruble/$ Exchange Rate..................................................................3 Figure 1.2.  Figure 1.3. Top Remittance Receivers in 2017....................................................................................................................3 The Cost of Sending $200 Has Remained Nearly Flat in 2017......................................................................4 Figure 1.4.  Figure 1.5. Sub-Saharan Africa Continues to Have the Highest Cost of Sending $200...............................................5 Figure 2.1. International Migrant and Refugee Stock........................................................................................................7 First-Time and Pending Asylum Applications in the EU-28...........................................................................8 Figure 2.2.  Refugee Stock in EU-28 and Worldwide..........................................................................................................8 Figure 2.3.  Top Country Hosts of Refugees and Asylum Seekers in the World, 2016 (in millions)..............................9 Figure 2.4.  Worker-paid Recruitment Costs for Pakistani Workers in Saudi Arabia.................................................... 11 Figure 2.5.  Worker-paid Recruitment Costs by Origin-Destination Corridors............................................................ 11 Figure 2.6.  Female Filipino Migrant Workers in the Domestic Sector Pay Much Lower Placement Fees................ 12 Figure 2.7.  Worker-paid Recruitment Costs are Higher When Immigration Quotas Are Enforced.......................... 13 Figure 2.8.  Detection of Potential Forced Returnees and Forced Returns................................................................... 15 Figure 3.1.  European Union—Increase in Potential Returnees (Undocumented Detected), 2008–16..................... 16 Figure 3.2.  European Union and United States—Potential Returnees Have Risen at Varying Pace, 2009–16......... 16 Figure 3.3.  Share of Deportations in Total Forced Returns, 2014 and 2016.................................................................. 17 Figure 3.4.  Deportations from Saudi Arabia, South Africa, and South Korea, Various Years..................................... 17 Figure 3.5.  Figure 4.1. China Remains the Top Recipient of Remittances in East Asia and Pacific...............................................22 Figure 4.2. Remittance-dependent ECA Countries Will Benefit from Recovery in 2017............................................23 Figure 4.3. Remittance Inflows to Latin America Were Strong Led by Mexico............................................................24 Figure 4.4. Recovery of Remittances to the MENA Region Is Driven by Egypt...........................................................25 Figure 4.5. Remittances to SAR Countries Are Large in Absolute Terms and Relative to GDP................................27 Figure 4.6. Countries with High Remittance Inflows and Remittances as Percentage of GDP..................................28 List of Tables Table 1.1. Estimates and Projections for Remittances to Low- and Middle-Income Regions....................................2 List of Boxes Box 2.1: Definition and Measurement of Recruitment Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Box 4.1: Diaspora Bonds for Nigeria—Successes and Shortfalls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Summary T his Migration and Development Brief reports global trends in migration and remittance flows, major policy developments, and the Sustainable Development Goal (SDG) indicators for reducing remittance costs and recruitment costs. The Brief reports new data on recruitment costs, a potential indicator for the SDG of promoting safe and regular migration. The special focus of the Brief is return migration, a challenging issue around the world amid a rise in asylum seekers and undocumented migrants. Migration crisis. In 2016, the worldwide stock of refu- stricter immigration policies in many remittance-source gees reached 17.2 million (or under 7 percent of 250 countries—including labor market “nationalization” million international migrants). While the European policies in the Gulf Cooperation Council (GCC) coun- migration crisis appears to be past its peak, elsewhere tries—are slowing down the hiring of foreign workers refugee movement continues to be significant. The and dampening remittance flows. number of first-time asylum seekers in the European Union (EU) has fallen by nearly two-thirds, from a peak Remittance flows to Sub-Saharan Africa are projected of 167,190 in October 2015 to 51,325 in June 2017. to grow by 10 percent, to Europe and Central Asia by Low- and middle-income countries (LMICs) continue to 8.6 percent, and to Latin America and the Caribbean bear the brunt of forced displacement by hosting over by 6.9 percent in 2017; in the other world regions, 90 percent of refugees. remittances are expected to grow between 1 and 5 percent. The trend is expected to continue: in 2018, Remittance trends. In 2017, remittance flows to LMICs remittance flows to LMICs are expected to grow 3.5 are projected to rebound by 4.8 percent to $450 percent to reach $466 billion. billion. Worldwide, remittance flows are projected to reach $596 billion. The welcome rebound in remittance Remittance costs. The global average cost of send- flows, after two successive years of decline, is driven ing remittances has remained nearly stagnant, at 7.2 by stronger economic growth in the EU, the Russian percent in 2017 Q3, significantly higher than the SDG Federation, and the United States. In U.S. dollar terms, target of 3 percent (World Bank 2017b). Two major the recovery is further accentuated by the valuation factors contributing to high costs are the de-risking effects of the recent strengthening of the euro, the behavior of commercial banks and exclusive part- British pound, and the ruble against the U.S. dollar. nerships between national post office systems and a But structural constraints, such as de-risking behavior single MTO. An exclusive partnership between the by international correspondent banks and increased national post office or commercial banks of either regulatory burdens on money transfer operators the source or the recipient country and any single (MTOs) continue to hinder the growth of remittances, MTO stifles market competition. The share of the especially through formal channels. Also, longer-term remittance fee received by the post office is equiv- risks remain: rising anti-immigration sentiments and alent to a highly regressive tax. Paradoxically, while v vi M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K many developing countries have outlawed exclusivity a shortage of workers, loss of productivity and price contracts, most of the large remittance-source coun- increases in sectors employing migrants, and overall tries, especially in Europe, allow this anti-competition loss of growth potential and competitiveness in the lon- practice. ger run. Forced expulsion can be administratively costly for host governments. Many destination countries offer Recruitment costs. Surveys conducted by the financial incentives for migrants to return home, but the International Labour Office–Global Knowledge actual number of returnees tends to be low, and often, Partnership on Migration and Development (ILO- returnees migrate again. The success of return policies KNOMAD) show that recruitment costs paid by depends on the reintegration of returnees back in the low-skilled migrant workers can be exorbitantly high country of origin. In general, reintegration is more likely in some corridors. For example, a significant num- to occur for returnees who were economically well off ber of Pakistani construction workers in Saudi Arabia prior to migration, and who expected their stay abroad reportedly paid over $5,000 to recruitment agents, an to be temporary, and so maintained strong social amount equivalent to 20 months (and at times over networks with origin communities. Forced returns are 30 months) of earnings. The structure of worker-paid traumatic for the returnees, who may suffer psychologi- recruitment costs is highly regressive—poor people cal, social, and financial impacts. pay progressively larger recruitment fees. Gender- specific differences, too, arise from migration policies The voluntary return of migrants to their home country targeting specific occupations. The admission policies supports economic development and job creation as of destination countries, meant to regulate the inflow returnees bring capital and knowledge back with them. of workers, have a noticeable impact on costs. High Migrants who return voluntarily often have better recruitment costs are common where a lack of oppor- employment possibilities in developing countries than tunities at home and excess demand for foreign jobs those who never migrated in the first place. There is at destination create a black market for opportunistic evidence that returnees enjoy upward occupational recruitment practices. Efforts to reduce recruitment mobility. Also, most are self-employed, thus potentially costs would require curbing the exploitative prac- contributing to employment generation and economic tices and abuses of illegal recruitment agents (or growth at home. Return migration has impacts on subagents), allowing direct recruitment by certified, knowledge diffusion and innovation in countries of bona fide overseas employers. Bilateral coordination origin. This is further catalyzed if the origin country between labor-sending and destination countries provides a framework and good conditions for return- would ensure greater pathways for regular migration at ees to make use of their skills and investments. The substantially lower costs. ability to secure jobs, access independent housing, and develop social contacts while abroad supports Return migration. Following the surge in the num- the social and economic reintegration of returnees. ber of asylum applications in Europe, the number Integration in the destination country, in other words, of potential returnees—those denied asylum and supports reintegration and sustainable return. By migrants detected but lacking valid documents—has extension, restrictive migration policies undermine risen in recent months. In the EU, the number of return programs and may damage prospects for reinte- potential returnees rose from 1.4 million in 2011 to gration upon return. over 5 million in 2016. But Europe is not alone. In the United States, the stock of potential returnees The effectiveness of return programs depends on rose from around 1.5 million in 2011 to 3 million in the efforts of both destination and origin countries. 2016. Also, Saudi Arabia and South Africa annually Aid conditionality, for example, is not an effective deported more than 5 percent of their migrant stock, tool in managing return migration. Also, researchers on average, in recent years. express a general skepticism of the efficacy of assisted return programs. The effectiveness of deportations Large-scale forced returns can have disruptive economic as a deterrent is also questionable since they do not consequences for the host country. They can lead to address the fundamental drivers of irregular migration: SUMMARY vii notably, an unfavorable economic and political envi- abroad; the possibility to secure a permanent resi- ronment in origin communities. Policies that promote dency in the host country; antidiscrimination and equal voluntary return and successful reintegration include: access programs in the countries of origin, and the the recognition of skills and qualifications acquired portability of social benefits. This Brief was prepared by Dilip Ratha, Supriyo De, Kirsten Schuettler, Ganesh Seshan, and Nadege Desiree Yameogo of the Migration and Remittances Unit of the Jobs Group, Social Protection and Jobs Global Practice; Sonia Plaza of the Trade and Competitiveness Global Practice; and Eung Ju Kim of the Development Prospects Group of the World Bank. Petra Niedermayerova and Iloila L. Tan helped with research support. Useful comments and contributions were received from the World Bank’s regional chief economists, Global Practices, country teams, and others, in particular from Manolo Abella, Xavier Devictor, Bingjie Hu, Martin Rama, Hans Timmer, and Manuela Tomei. Thanks to Michal J. Rutkowski and David A. Robalino for helpful comments and suggestions. viii M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K Migration and Remittances: Recent Developments and Outlook Special Topic: Return Migration 1 Trends in Global Remittance Flows 1.1. Remittances to Rebound in 2017 Remittance flows in U.S. dollar terms seem to be impacted by the higher valuation effects of a weakening After two consecutive years of decline, remittance of the U.S. dollar against the euro and the ruble. In the flows to low- and middle-income countries (LMICs) are Gulf Cooperation Council (GCC) countries—major des- projected to increase by 4.8 percent between 2016 and tinations for low-skilled migrants from East and South 2017, to $450 billion (figure 1.1 and table 1.1). This mod- Asia—fiscal tightening due to low oil prices, and policies est recovery is likely to benefit from the cyclical growth discouraging the recruitment of foreign workers, have recovery observed in Europe, Russia, and the United dampened outward remittance flows. States.1 But burdensome regulations and anti-immigra- tion sentiments in many migrant-destination coun- Anti-immigration sentiments have become more tries continue to constrain the growth of remittances. pervasive, affecting countries of various income levels FIGURE 1.1.   Remittance Flows to Developing Countries Are Larger than Official Development Assistance and More Stable than Private Capital Flows, 1990–2019 800 700 600 FDI 500 ($ billion) 400 Remittances Private debt & portfolio 300 equity 200 ODA 100 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f 2019f Sources: World Bank staff estimates; World Development Indicators. See appendix A for data and forecast methods. Note: FDI = foreign direct investment; ODA = official development assistance. 1 2 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K TABLE 1.1.  Estimates and Projections for Remittances to Low- and Middle-Income Regions 2010 2014 2015 2016 2017p 2018f 2019f  Region ($ billions) Low and Middle Income 341.1 443.8 439.1 429.4 450.1 466.0 481.0 East Asia and Pacific 95.9 121.2 125.9 122.7 128.0 132.4 137.3 Europe and Central Asia 37.8 51.7 40.5 39.5 42.9 45.8 47.9 Latin America and Caribbean 56.5 64.5 68.4 73.6 78.6 81.5 84.5 Middle East and North Africa 39.0 54.1 51.2 48.9 51.2 52.7 54.3 South Asia 82.0 115.8 117.6 110.4 111.6 114.4 117.5 Sub-Saharan Africa 29.9 36.5 35.4 34.4 37.8 39.2 39.6 World 467.6 597.7 581.9 573.6 595.7 615.7 640.2 Developing countries a 335.1 435.4 431.5 421.9 442.0 457.2 471.4   (Growth rate, percent) Low and Middle Income 11.3 3.7 –1.1 –2.2 4.8 3.5 3.2 East Asia and Pacific 19.4 4.9 3.9 –2.6 4.4 3.4 3.6 Europe and Central Asia 4.9 –5.3 –21.7 –2.5 8.6 6.8 4.6 Latin America and Caribbean 2.6 4.8 6.1 7.5 6.9 3.6 3.7 Middle East and North Africa 18.2 7.2 –5.3 –4.4 4.6 2.9 3.1 South Asia 9.4 4.5 1.5 –6.1 1.1 2.6 2.6 Sub-Saharan Africa 9.8 4.9 –2.8 –3.0 10.0 3.8 0.8 World 8.4 3.8 –2.6 –1.4 3.9 3.4 4.0 Source: World Bank. Note: p = projection; f = forecast. a. Previous income classification: This group excludes Equatorial Guinea; the Russian Federation; Venezuela, República Bolivariana de; and Argentina, which were classified as high-income countries earlier. These countries are included in the group of low- and middle-income countries in the table. See appendix A for data and forecast methods. and in different regions (see appendix B for more De-risking—when international correspondent banks regional details). Voter concerns about immigration close the bank accounts of money transfer opera- are widely believed to have influenced the outcomes tors (MTOs), to avoid risks of money laundering and of Brexit and the U.S. elections. In the European financial crime—continues to place regulatory burdens Union (EU), public surveys reveal a widespread on MTOs, especially smaller and newer players. This perception of migration as one of the most import- is preventing the diffusion of newer technologies and ant challenges facing society today. Thailand and innovative remittance platforms. Furthermore, the per- Malaysia have been cracking down on undocumented sistence of exclusive arrangements between state-run migrants, and have recently started a regularization agencies, such as post offices, and large remittance program. There is also large scale return of Afghan companies creates noncompetitive market structures. refugees from Pakistan. Countries in Latin America are This raises remittance costs and diverts remittances to also in the process of toughening their migration pol- informal channels, thereby retarding their macroeco- icies. Nations are discouraging the hiring of foreign nomic benefits. workers, cracking down on undocumented workers, and tightening norms for refugees. This is increasing Regional growth trends are summarized in table 1.1, the potential for large-scale return migration, posing and more detailed discussion is provided in section challenges for both origin and destination countries 4. Remittances to Sub-Saharan Africa are expected (the topic of special focus in section 3). This also has to increase by 10 percent, led by Nigeria, largely due the potential to dampen remittance flows, especially to the devaluation of the naira. Latin America and the through formal channels. Caribbean is expected to register a strong growth T R E N D S I N G L O B A L R E M I T TA N C E F L O W S 3 FIGURE 1.2.   Outward Remittances from Russia and to be an artifact of both the low base, given three Ruble/$ Exchange Rate years of decline, and of ruble/$ exchange rate move- ments: in the first half of 2017, outgoing remittances 20 70 from Russia, the main source of remittances to Central Asian countries, decreased in ruble terms, due to the Change in remittances, year-on-year, % 10 appreciation of the ruble against the U.S. dollar (figure 65 1.2). Variations in the recovery of regional remittance 0 flows mark a continuation of the “new normal” of slow growth—cyclical upswing and exchange rate effects partially offset by structural constraints (see previous Ruble/$ –10 60 issues of this Brief). –20 In 2017, the top five remittance recipient countries are expected to be India, China, the Philippines, 55 Mexico, and Nigeria (figure 1.3). As a share of gross –30 domestic product (GDP) for 2017, the top five recipi- ents are smaller countries—the Kyrgyz Republic, Haiti, –40 50 Tajikistan, Nepal, and Liberia. 2016 2017 In US$ In Ruble Ruble/$ (right-axis) Given the global economic outlook, remittances to Source: World Bank’s World Development Indicators. LMICs are expected to grow at about 3.5 percent in 2018, to $466 billion (table 1.1). (The methodology for forecasting remittance flows is outlined in appen- dix A.) Risks to this outlook, however, are mainly on rate of 6.9 percent in 2017 on the back of the relatively the downside. No solutions are in sight yet for the strong U.S. economy. Remittance flows to Europe and de-risking of correspondent banks, or for antimi- Central Asia are expected to register a growth rate of gration sentiments and restrictive migration policy 8.6 percent in U.S. dollar terms. This growth appears stances. FIGURE 1.3.  Top Remittance Receivers in 2017 $ billion Percentage of GDP 65.4 62.9 37.1 31.2 28.0 27.2 25.9 32.8 30.5 21.1 21.0 20.4 19.9 18.4 22.3 19.8 18.2 13.8 12.9 8.7 India China Philippines Mexico Pakistan Nigeria Egypt, Arab Rep. Bangladesh Vietnam Guatemala Kyrgyz Republic Haiti Tajikistan Nepal Liberia Moldova Comoros Gambia, The Tonga Honduras Sources: International Monetary Fund; World Bank’s World Development Indicators; staff estimates. Note: GDP = gross domestic product. 4 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K  rends in the Cost of 1.2. T Exclusivity Contracts Hinder 1.3.  Remittances Competition on the Remittance Market The cost of sending money to LMICs continues to be high, well above the Sustainable Development An exclusive partnership between the national post Goal (SDG) target of 3 percent. According to the office of either the source or the recipient country Remittance Prices Worldwide database, the global and any single MTO stifles market competition and average cost of sending remittances of $200 (inclusive allows the MTO to raise remittance fees. The same is of all fees and charges) was 7.2 percent in 2017 Q3 also true for exclusivity partnerships involving national (figure 1.4). Among the regions in 2017 Q3, South commercial banks. Worse, the share of the remittance Asia had the lowest costs, at 5.4 percent, while Sub- fee received by the post office or another entity of the Saharan Africa continued to have the highest average state is equivalent to a highly regressive tax on poor cost, at 9.1 percent (figure 1.5; see World Bank 2017a migrants and their relatives. This practice directly con- for details). Remittance costs across many African cor- travenes the SDG goal of reducing remittance costs by ridors and small islands in the Pacific remain above 10 2030, and a similar goal of the European Union–African percent, because of the low volumes of formal flows, Union (EU-AU) Valetta Summit agreement with a inadequate penetration of new technologies, and lack deadline of 2020. Paradoxically, while many develop- of a competitive market environment. ing countries (for example, Bangladesh, Ghana, India, Nigeria, Pakistan, and Rwanda) have outlawed exclu- Two major factors contributing to high costs are sivity contracts, most of the large remittance-source (i) exclusive partnerships between national post office countries, especially in Europe, continue to allow this systems and any single MTO; and (ii) the de-risking anticompetition practice (World Bank 2006; Ponsot behavior by commercial banks. 2011). A simple solution to this problem would be to FIGURE 1.4.   The Cost of Sending $200 Has Remained Nearly Flat in 2017 10 9 8 7 6 Percent 5 4 3 2 1 0 Q1 2009 Q3 2009 Q1 2010 Q3 2010 Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Source: Remittance Prices Worldwide, World Bank. T R E N D S I N G L O B A L R E M I T TA N C E F L O W S 5 FIGURE 1.5.  Sub-Saharan Africa Continues to Have the Highest Cost of Sending $200 10 9.5 9.1 9 8.2 8.0 8 7.4 7.4 7.2 7.0 7 6.4 6.4 6.2 6 5.7 5.4 5.4 Percent 5 4 3 2 1 0 Global average SAR LAC ECA EAP MENA SSA Third quarter 2016 Third quarter 2017 Source: Remittance Prices Worldwide, World Bank. open the partnerships to multiple remittance service and a survey of MTO account access showed a decline providers. in the number of correspondent banks with relation- ships in several key areas. De-risking by Commercial 1.4.  The situation worsened in 2016, according to an International Finance Corporation (IFC) global Banks Impacts Remittance survey of banks in emerging markets: 27 percent of Costs banks surveyed globally—35 percent in Sub-Saharan Africa—reported a decrease in relationships with During the past three years, regulations concerning corresponding banks (IFC 2017). Banks also reported anti-money laundering/countering financing of terror- that they were raising fees and reducing credit lines ism (AML/CFT) have impacted cross-border transfers, to their customers. The data points to three primary including remittance flows. In this context, de-risking challenges reported by banks: (i) several requests from includes closing the bank accounts of customers in multiple regulators; (ii) expensive software and system countries or sectors deemed to pose a high risk of upgrades; and (iii) lack of harmonization in global, money-laundering or terrorist financing. regional, and local regulatory requirements.4 Banks perceived MTOs as high risk since not all MTOs have a De-risking has created significant challenges, reducing good system of risk management. In the Pacific Islands, remittance costs and constraining broader develop- MTOs’ compliance with customer due diligence ment objectives.2 Meanwhile, the restrictions on regu- requirements was cited as one reason banks withdraw lated and legal remittance providers could divert flows correspondent banking relationships (Erbenová et al. toward informal channels, which in turn could increase 2016). In Sub-Saharan Africa, lack of customer infor- AML/CFT risks.3 MTOs have faced a reduction in the mation, including nonexistent national identification number of correspondent banks operating in small-vol- cards and the impossibility of verifying addresses in ume corridors or in fragile countries. The 2015 World rural areas, was cited as the second-most-important Bank surveys on correspondent banking relationships challenge. 6 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K Based on the survey results, three suggestions to help remittances, any solution to de-risking must adopt a two- mitigate de-risking have been proposed: (i) greater pronged approach: develop risk metrics, and recognize harmonization of regulatory requirements; (ii) a central- that small remittances below certain thresholds do not ized registry for due diligence data, and (iii) assistance in represent significant AML/CFT risks. Almost certainly understanding and adopting new compliance standards. small remittances do not pose systemic risks, especially In the end, and absent evidence of risks associated with those going through small and start-up MTOs. 2 Migration Issues  arge Movements of Refugees 2.1. L FIGURE 2.1.  International Migrant and Refugee Stock and Migrants Taper in the 300 European Union 250 250 As of 2015, there were some 250 million international migrants throughout the world (figure 2.1), with women 200 making up 48 percent of the total (World Bank 2016a). Approximately one-third of international migrants were Million 150 under the age of 30 (UNDESA 2016). More than 150 million were migrant workers (ILO 2015). The total for- eign-born population in the Organisation for Economic 100 Co-operation and Development (OECD) rose from 120 million in 2013 to 124 million in 2015 (OECD 2017). 50 17.2 As shown in Figure 2.1, the global stock of refugees includes 17.2 million refugees recorded by the United 0 International migrants Refugees* Nations High Commissioner for Refugees (UNHCR), and an additional 5.3 million Palestinian refugees reg- Source: World Bank, Migration and Remittances Factbook 2016 and UNHCR. istered by the United Nations Relief and Works Agency Note: *Refugee data excludes 5.3 million Palestinian refugees (UNRWA). Although the stock increased significantly reported by UNRWA. Refugees data for end of year 2016. in 2014 and 2015, it has yet to reach the historical high recorded in the early 1990s. arrivals from around 1.8 million to 0.5 million between The European migration crisis seems to be past its 2015 and 2016 and a change in route preferences with peak. The number of first-time asylum seekers to sharp falls in the Eastern Mediterranean and Western the 28 EU countries (EU-28) has fallen, from the peak Balkans and a slight rise in the Central Mediterranean. of 167,190 in October 2015 to 51,325 in June 2017 The EU-Turkey agreement has resulted in low num- (figure 2.2). The number of persons awaiting a decision bers of irregular arrivals in Greece and enabled on their asylum cases fell from about 1.2 million in almost 10,000 Syrians to be resettled in the European September 2016 to 0.9 million in June 2017. While the Union. Irregular crossings and deaths in the Central pressure of new arrivals and the addition of refugees Mediterranean decreased significantly. has weakened, the stock of refugees in the EU-28 rose to 1.9 million in 2016 (or 11 percent of the world refu- While the global policy dialogue is focused on the EU gee stock, figure 2.3). Frontex data on irregular entries migration crisis, LMICs outside the European Union into the European Union also shows an overall dip in continue to bear the brunt of forced migration (figure 7 8 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K FIGURE 2.2.   First-Time and Pending Asylum Applications in the EU-28 1,200 1,000 800 Thousand 600 400 200 0 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Pending asylum applications First-time asylum seekers Source: Eurostat. FIGURE 2.3.   Refugee Stock in EU-28 and Worldwide 18 16 14 12 10 Millions 8 6 4 2 0 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 World EU Source: United Nations High Commissioner for Refugees. 2.4). Turkey and Pakistan are the top two refugee and Ethiopia, and Kenya face significant strain on their asylum seeker host countries, followed by Germany. limited resources given the presence of many refu- Countries such as Lebanon, Uganda, Iran, Jordan, gees and asylum seekers. Sub-Saharan Africa faces M I G R AT I O N I S S U E S 9 FIGURE 2.4.   Top Country Hosts of Refugees and Asylum Seekers in the World, 2016 (in millions) 3.5 0.2 3.0 2.5 2.0 Million 1.5 0.0 0.6 0.0 0.0 0.0 1.0 0.0 0.7 0.4 0.0 0.5 2.9 1.4 0.7 1.0 0.9 1.0 0.8 0.7 0.3 0.5 0 Turkey Pakistan Germany Lebanon Uganda Iran Ethiopia Jordan United States Kenya (Islamic Rep. of) of America Refugees Asylum seekers Source: UNHCR. a comparable yet more burdensome rise in refugee their families, and could also enhance the efficiency and asylum seeker numbers from 2.6 million in 2006 and mutual benefits that can be reaped from labor to 5.6 million in 2016. During the first half of 2017, migration regimes. The previous Migration and Sub-Saharan Africa had 2.6 million new displacements Development Brief reported on ongoing efforts by (2.1 million caused by conflict and violence, and about the Global Knowledge Partnership on Migration and 0.5 million by environmental disasters, according to Development (KNOMAD) and the International Labor the Internal Displacement Monitoring Centre). The Organization (ILO) to measure worker-paid recruitment Democratic Republic of Congo is the most affected costs incurred by workers in low or unskilled positions country in the region, with almost a million newly (see World Bank 2017a). displaced people. In the Lake Chad Basin, there are almost 2.3 million internally displaced persons (IDPs), Survey data were collected between 2014 and early mostly from Nigeria (UNHCR 2017). In the Horn of 2017 using a standardized questionnaire as part of the Africa, major refugee flows are from South Sudan and methodological work to develop a new SDG indi- Somalia. In East Asia, the evolving Rohingya crisis has cator (10.7.1). An explanation of recruitment costs, a seen over 400,000 persons move from Myanmar to proposed indicator, and data sources are summarized Bangladesh. (More details are provided in section 4.) in box 2.1. The proposed Recruitment Cost Indicator (RCI) is the average worker-incurred recruitment cost paid for securing an overseas job, expressed as a mul- 2.2. Worker-Paid Recruitment Costs tiple of monthly foreign earnings. Migration costs—in particular, recruitment costs The survey data reveal the following messages. First, borne and paid for by workers—has been identi- recruitment costs can be exorbitant, greatly reducing fied as a key indicator of the SDG promoting safe, the benefits accruing to migrants and their families. orderly, and regular migration (SDG indicator 10.7.1). In the case of Pakistani construction workers in Saudi Reducing such costs would put billions of dollars Arabia, for example, worker-paid recruitment costs back into the pockets of poor migrant workers and varied widely, exceeding in some cases more than 20 10 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K BOX 2.1:  Definition and Measurement of Recruitment Costs Worker-paid recruitment costs can be defined as all the monetary costs incurred by workers (above and beyond those incurred by employers) to establish an employment relationship. Such costs broadly encompass placement fees paid to the recruitment agency or to their agents, documentation fees (such as to cover a passport, visa, medical certificate, security clearance, or language test), transportation costs, and informal payments. The cost of servicing migration loans is currently excluded. The proposed Recruitment Cost Indicator (RCI) is the average worker-incurred recruitment cost paid for securing an overseas job, expressed as a multiple of monthly foreign earnings. While numerous countries legally restrict the amount that workers should pay, poor enforcement often results in excessive up-front payments. The International Labour Organization’s (ILO’s) Fair Recruitment initiative calls for no recruitment fees or related charges to be incurred by workers. Until recently, there was no systematic effort to document worker-paid recruitment costs. Purposeful surveys con- ducted with migrant workers since 2014 as part of a joint initiative involving the Global Knowledge Partnership on Migration and Development (KNOMAD) and the ILO have produced new evidence on costs paid in more than 30 bilateral corridors, involving interviews with over 5,500 workers. Surveys were conducted with migrants at various performance sites: in the destination country or in the origin countries at their residence or at the airport—both on arrival from abroad or prior to their departure for jobs overseas. Lessons learned from these experiences are being used to produce guidelines to support national statistical agencies in collecting data on a regular basis as part of efforts to monitor progress toward the Sustainable Development Goals. While these data have greatly enhanced our understanding of recruitment costs, challenges remain in terms of identifying a representative sample, accessing migrant workers, and obtaining accurate and timely information on the various costs that are incurred by workers, who may not be willing to talk freely or may not be fully aware of what they paid for. Random representative sampling is nearly impossible to conduct, so a snowball sampling strat- egy was used. That is likely to have skewed the data reported here, as the most vulnerable migrants may not have responded, and as such the RCI reported above should be treated as a lower bound of actual recruitment costs in terms of monthly earnings. months (and at times 30 months) of earnings (figure of a worker’s foreign earnings can be observed in 2.5). Second, the scatter plot reveals the highly regres- the fourth quintile of the distribution (see figure 2.6). sive nature of recruitment costs, that is, these costs are Saudi Arabia was, until the recent workforce nation- proportionally higher for workers with lower earnings. alization policy (Nitaqat), the primary destination Third, there is considerable heterogeneity in paid for Pakistani migrants, followed by the United Arab recruitment costs across migration corridors. These can Emirates. Pakistani migrants paid less to move to the be attributed to the regulatory practices and policies United Arab Emirates, though still far more than in of both origin and destination countries. Also, there other migration corridors. In contrast, workers from the are gender-specific differences that likely arise from Philippines to Saudi Arabia and Qatar incurred some migration policies targeting specific occupations. of the lowest fees, averaging below 1.5 times their Finally, the admissions policies of destination countries monthly overseas income. regulating the inflow of workers have a noticeable impact on costs. The data show that Filipino women who moved to work in Saudi Arabia and Qatar in the fourth quarter of The Pakistan to Saudi Arabia corridor remains one of 2016 paid relatively lower fees to recruitment agencies the costliest in terms of up-front recruitment costs. than their male compatriots (see figure 2.7). This could Costs of over $5,000 or the equivalent of 12 months be indicative of the Philippines’ policy of exempting M I G R AT I O N I S S U E S 11 FIGURE 2.5.   Worker-paid Recruitment Costs for Pakistani Workers in Saudi Arabia 35 30 Recruitment cost indicator (RCI) 25 20 15 10 5 0 0 200 400 600 800 1,000 1,200 Average monthly foreign earnings (constant 2016 $) Source: Authors’ calculation from KNOMAD/ILO migration costs surveys. FIGURE 2.6.   Worker-paid Recruitment Costs by Origin-Destination Corridors 6,000 12 5,000 10 4,000 8 2016 $, 4th quintile Number of months 3,000 6 2,000 4 1,000 2 0 0 PAK-SAU PAK-UAE IND-SAU VNM-MYS IND-QAT NPL-QAT NPL-SAU ETH-SAU NPL-MYS PHL-QAT PHL-SAU Costs (2016 $) (left axis) RCI – costs in months of foreign earnings (right axis) Source: Authors’ calculation from KNOMAD/ILO migration costs surveys. Note: IND = India; PAK = Pakistan; PHL = the Philippines; SAU = Saudi Arabia; MYS= Malaysia; UAE= United Arab Emirates; QAT=Qatar; ETH=Ethiopia; VNM= Vietnam. placement fees for its citizens hired to work abroad as across corridors—for example, $5 in the Philippines– domestic workers, caregivers, and seafarers. However, Saudi Arabia corridor vs $100 in the Philippines-Qatar the enforcement of the no-fee policy seems to vary corridor. Anecdotally, recruitment agents at times 12 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K FIGURE 2.7.   Female Filipino Migrant Workers in the Domestic Sector Pay Much Lower Placement Fees 421 PHL-QAT: women 459 101 712 PHL-QAT: men 826 503 412 PHL-SAU: women 218 5 569 PHL-SAU: men 583 290 USD 2016 (4th quintile) Monthly earnings Total recruitment cost Others Source: Authors’ calculation from KNOMAD/ILO migration costs surveys. Note: PHL = the Philippines; QAT = Qatar; SAU = Saudi Arabia. circumvent the no-fee policy by imposing additional This pattern of association appears to be played out in charges for training. A related regulation that restricts the data. Recruitment costs are higher when prior year placement fees from being no higher than one month’s emigration flows are lower (a proxy for a binding quota salary for other sectors of employment, other than doc- level) and vice versa (figure 2.8).6 In the case of Pakistan, ument-processing costs, seems to be borne out in the more than 80 percent of recruitment costs takes the data. The notion of requiring a “zero” placement fee, form of “visa fees.” While formal visa fees are fixed by regardless of occupation, is currently being explored the receiving country, there is a widespread practice of by the Philippines government. “visa trading” or “free visas”: visas are sold in the black market for sponsored jobs in the GCC that do not exist Corridor-specific recruitment costs incurred by workers but provide a means for a worker to “freely” pursue also vary annually. A possible explanation is the poli- jobs without being bound to a particular employer.7 cies in destination countries that regulate the inflow of foreign workers by country of origin. The GCC coun- Efforts to reduce recruitment costs would require tries are believed to implement country-specific quotas curbing the exploitative practices and abuses of illegal for low-skilled workers though these are not explicitly recruitment agencies (or subagents), allowing direct published or stated.5 Assuming steady demand for recruitment by certified, bona fide overseas employ- foreign jobs among prospective low-skilled migrant ers. Bilateral coordination between labor-sending and workers, changes in the quota would affect the supply destination countries would ensure greater pathways of jobs. Consequently, the outflow of emigrants and for regular migration at substantially lower costs. the market-clearing fees charged by recruiters would be affected as potential migrant workers bid for a limited supply of foreign positions. Costs incurred by 2.3. Global Compact on Migration migrant workers would be higher were the quota to be lowered, which would reduce emigration outflows. The development of a global compact for safe, orderly, By contrast, migrants would pay lower fees were the and regular migration, as called for in the New York country-specific quota to be relaxed. Declaration for Refugees and Migrants, will provide M I G R AT I O N I S S U E S 13 FIGURE 2.8.   Worker-paid Recruitment Costs are Higher When Immigration Quotas Are Enforced 7,000 2011 6,000 Recruitment costs (2016 $, 4th quintile) 5,000 2014 4,000 2011 3,000 2014 2,000 2011 1,000 2016 0 0 50,000 100,000 150,000 200,000 250,000 300,000 Lagged annual emigration outflows Pakistan-Saudi Arabia Nepal-Qatar Pakistan-U.A.E. Source: Authors’ calculation from KNOMAD/ILO migration costs surveys. a critical opportunity to enhance international coop- engagement of the United Nations with international eration on migration and to achieve the SDGs and financial institutions and the private sector. targets related to migrants and migration (see World Bank 2017a). The UN Secretary General has issued a A series of six informal thematic sessions on facilitating report on the progress made by the United Nations safe, orderly, and regular migration are taking place in implementing the commitments in the New York between April 2017 and November 2017 to gather Declaration. It outlines ways of achieving greater substantive input and concrete recommendations to efficiency, operational effectiveness, and system-wide inform the development of the global compact on coherence, as well as ways of strengthening the migration. 3 Special Topic: Return Migration Conceptualizing and 3.1.  seekers and refugees) who are forcibly deported, those asked to return without incentives, those offered finan- Quantifying Return Migration cial incentives to return, and those who voluntarily return to their country of origin or a third country. Return migration has gained increased attention in many migrant-receiving countries due to the recent surge in For analytical purposes, we divide return migrants into the number of refugees, asylum-seekers, and undocu- two categories: forced and voluntary. Forced return mented economic migrants. According to the European includes all cases where migrants are denied legal Commission, the approval rate for more than 2.6 million stay in the intended destination (including withdrawal asylum applications during 2015–16 was 50–60 percent, of permanent residency and citizenship) and are sent implying that the number of potential returnees in the out through deportation, official persuasion, or with medium term is about 1 million people.8 Destination financial incentives. By contrast, voluntary return occurs countries grapple with the issue of how to send back where the migrant has a valid right to remain in the people in a compassionate, sustainable, and cost-effec- destination country but chooses to return by his/her tive manner. On the flip side, origin countries to which own free will and volition.9 the migrants may eventually return are likely to face issues of reintegration and economic sustenance. Conceptually, the detection of potential forced return- ees could be at the border, in the interior, or when the The objective of the section is to provide a basic analysis persons report themselves as asylum seekers (figure of drivers and impacts of return migration together with 3.1). Following detection, administrative and judicial existing and possible policy options. The drivers, bene- processes are undertaken to determine their legal sta- fits, costs, and policy options related to return migration tus and whether they can stay or would have to return. are touched upon. It covers migrants (as well as asylum In some cases, these could involve political decisions FIGURE 3.1.   Detection of Potential Forced Returnees and Forced Returns Detection Determination of legal status Returned Border Control Deportation (Removed by Force) Administration Interior Assisted Judicial (Given incentives) Political Request Asylum Non-Assisted (Not given incentives) 15 16 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K FIGURE 3.2.   European Union—Increase in Potential FIGURE 3.3.   European Union and United States— Returnees (Undocumented Detected), Potential Returnees Have Risen at 2008–16 Varying Pace, 2009–16 2.5 6 5 2.0 4 1.5 Million Million 3 1.0 2 0.5 1 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2008 2009 2010 2011 2012 2013 2014 2015 2016 Undocumented detected Denied entry EU-28 Includes Asylum Seekers Returned EU-28 Excludes Asylum Seekers US Source: Eurostat. Note: Denied entry = third-country nationals refused entry in the Source: Calculations using data from Eurostat and Department of European Union and Schengen external border: undocumented Homeland Security. detected = illegally present third-country nationals within the Note: Asylum seekers are first-time asylum applicants from non- European Union; returned = both enforced and nonenforced; EU-28 countries. Undocumented detected stockt = undocumented European Union = EU-28 countries. Data in calendar years. detected stockt-1 + new undocumented detectedt - returnedT. based on balancing humanitarian concerns with issues mainly due to the presence of asylum seekers.10 This of domestic sentiment, national security, and economic figure also shows a gradual and substantial increase sustainability. If the persons are to be returned, the in the (estimated) stock of potential returnees in the process could be enforced (deportation), assisted with United States, from around 1.5 million in 2011 to 3 incentives, or nonassisted. At times, there are also million in 2016. political decisions that lead to mass expulsions. Interestingly, while the share of deportations in total For the European Union, potential returnees are: (i) those involuntary returns decreased in the European Union “denied entry,” that is, third-country nationals refused in recent years, it has increased in the United States entry in the European Union (EU) and Schengen external (figure 3.4). Also, it is often overlooked that deporta- border; and (ii) “undocumented detected,” namely, ille- tions are not limited to Europe and the United States. gally present third-country nationals within the European Saudi Arabia and South Africa also had average annual Union. Returned persons are both enforced (deportees) deportations in excess of 5 percent of the migrant and nonenforced (incentivized or not incentivized). stock (figure 3.5). Based on the detection of undocumented persons, the European Union saw a sharp increase in potential forced Besides deportations of individuals, many countries returnees in recent years (figure 3.2). have exercised mass expulsion based on nationality, ethnicity, or religion.11 Xenophobic attacks often pre- Figure 3.3 shows that the increase in the estimated cede such expulsions. These are often driven by polit- stock of potential returnees in the European Union was ical events such as the regime of Idi Amin in Uganda S P E C I A L T O P I C : R E T U R N M I G R AT I O N 17 FIGURE 3.4.   Share of Deportations in Total Forced FIGURE 3.5.   Deportations from Saudi Arabia, South Returns, 2014 and 2016 Africa, and South Korea, Various Years 100% 600 6 528 500 5 80% 76% 71% 400 4 % of Migrant Stock 62% 60% Thousands Share 300 3 43% 40% 187 200 2 20% 100 1 21 0% 0 0 2014 2016 2014 2016 2011–2016 2003–2011 2007–2015 Annual Annual Annual European Union 28 United States Average Average Average Saudi Arabia South Africa South Korea Source: Eurostat and U.S. Department of Homeland Security (DHS); shares calculated using data from Eurostat and DHS. Source: Calculations using data from the United Nations, Saudi Note: Data for EU-28 include 20 countries: Belgium, Bulgaria, the Arabia’s Ministry of Interior and the Gulf Labor Markets and Migration Czech Republic, Denmark, Estonia, Ireland, Spain, France, Croatia, database, South Africa’s Department of Home Affairs, and the Korean Italy, Latvia, Luxembourg, Hungary, Malta, Poland, Portugal, Romania, Ministry of Justice Immigration Service. Slovenia, Slovakia, and Sweden. Note: Bar graphs reflect the average of annual deportations over the years indicated per country. Share = average of annual deportations in the years indicated divided by the total migrant stock in the country in 2015. and reorganization of national boundaries like those following World War I and II, the partition of British India, or the breakup of Yugoslavia. In Europe, the reversal of the gains that migrants, even undocumented, last major population transfer was the deportation of bring to a country. For instance, in Côte d’Ivoire, the 800,000 and the displacement of 250,000 other ethnic mass expulsion of foreign fishermen resulted in a 60 Albanians during the Kosovo war in 1999. percent decline in fish production and an increase in fish prices by 50–150 percent (Vanga 2004). It is projected that for the United States, the removal of undocumented migrants could lead to the immediate reduction of the Forced Return—Challenges for 3.2.  GDP by 1.4 percent, and ultimately by 2.6 percent—a Destination Countries cumulative GDP reduction of $4.7 trillion over 10 years.13 Forced return often coincides with political and eco- Forced expulsion can be costly for the host govern- nomic crisis (for instance, Nigeria in 1982–83 and the ment. Deportation costs for the European Union in GCC countries in 2015–16). The rise of ethnic nation- 2015 were estimated to be $1 billion a year. In 2015, alism in host countries could also force migrants to the American Action Forum estimated that remov- return to their home countries. Socioeconomic crises ing 11.2 million undocumented migrants from the could be translated into xenophobic attacks against United States over a 20-year period would cost $420 migrants or foreign descendants.12 billion–$620 billion. The Center for American Progress estimates that the removal of 11.3 million undocu- Large-scale forced returns can have economic conse- mented immigrants would cost $114 billion ($10,070 quences in the host country. In many ways, these are a per person on average). 18 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K  orced Return—Challenges for 3.3. F  valuating Forced Return 3.4. E Origin Countries Policies How do forced returnees fare after returning to Cooperation and coordination. The exchange of their countries of origin? Existing literature sug- information, coordination, and cooperation between gests that it would depend on their ability to entities at the national and subnational levels, as well reintegrate in a manner that is deemed to be as among subnational entities, facilitates the return sustainable.14 In fact, a common yardstick for mea- of migrants. More exchange of information and suring the “success” of return programs is whether good practices among countries might also help.16 returnees remigrate and the extent to which their Examples of such collaboration are return partner- return deters others from migrating illegally. In a ships between the EU and African countries, and study of 178 assisted returnees in six home coun- migration (and mobility) partnerships between the EU tries, 76 percent of the return migrants wanted to and Turkey, and the United States and Mexico. reemigrate even after spending two years at home (Ruben, van Houte, and Davids 2009).15 Financial incentive programs. Financial incentive pro- grams to promote voluntary returns are more success- For refugees, an obligation to leave the destination ful if they are set up with a long-term perspective, and country can be traumatic. A longitudinal study of refu- if they are oriented to the reintegration of the migrants gees in Germany who participated in an assisted return in their home countries.17 Reintegration depends on program found an increase in the rate of psychiatric the socioeconomic characteristic of the returnee, disorders: from 53 percent prior to returning to their circumstances prior to migration, and living conditions home country to 88 percent nine months after return- in the destination country. Researchers express general ing (von Lersner, Elbert, and Neuner 2008). Forced skepticism of the efficacy of assisted return programs returnees to countries of the Maghreb were found to (van Houte and De Koning 2008; van Houte and Davids have a higher likelihood of unemployment than volun- 2014; Koser and Kuschminder 2016). tary returnees (David 2017). Deportations. Deportations are costly for all con- Factors affecting reintegration. In general, studies cerned; the deporting country, the receiving country, have shown that reintegration is more likely to occur and the migrants themselves. Their effectiveness as a for returnees who were economically well off prior to deterrent is questionable since they do not effectively migration, and who expected their stay abroad to be address the fundamental drivers of irregular migration: temporary, and so maintained strong social net- limited avenues for regular migration, lack of economic works with origin communities. Also, younger, more opportunities in origin countries, instability and gover- educated migrants, and families with children are nance gaps in transit countries, prevalence of people more likely to reintegrate (Black et al. 2004; Ruben, smuggling activities, and violence or conflict. van Houte, and Davids 2009; Koser and Kuschminder 2016). Living and working conditions in the host Aid conditionality and return migration. The scope country play a dominant role in reintegration. The and duration of aid programs are too limited to have a ability to secure jobs, have access to independent significant effect on migration. Therefore, aid con- housing, and the freedom to develop social contacts ditionality may not be an effective tool in managing while abroad are likely to be important factors in return migration. supporting the social and economic reintegration of returnees (Ruben, van Houte, and Davids 2009). Origin country reintegration policies. Until recently, Therefore, integration in the destination country countries have been unprepared to receive large supports reintegration and sustainable return. By numbers of deportees. The Mexican government in extension, restrictive migration policies undermine 2014 launched a program called Somos Mexicanos return programs and may damage prospects for rein- (We’re Mexican) to assist returning migrants find jobs, tegration upon return. start businesses, and deal with the emotional trauma of S P E C I A L T O P I C : R E T U R N M I G R AT I O N 19 leaving families behind in the United States. However, Those with a lower and higher income are more likely there are limited government resources to deal with an to return (Bijwaard and Wahba 2014). There is empirical expected increase in returning migrants in the coming evidence that unemployment is a key driver of return. years. Analogous to destination countries recognizing On the other hand, returns can also be the result of the the qualifications acquired by migrants in their home achievement of a savings objective or the acquisition country, origin countries need to develop efficient pro- of skills, combined with the prospects of obtaining a cesses to recognize education obtained at destination job back home (Wahba and Zenou 2012). by returning migrants. Impacts of voluntary return. The return of migrants to their home country supports economic development 3.5. Voluntary Return and job creation as returnees bring capital and knowl- edge back with them. This is further catalyzed if the ori- Voluntary return far exceeds forced return. Studies gin country provides a framework and good conditions indicate that around 20 percent to 50 percent of immi- for returnees to make use of their skills and invest- grants leave OECD countries within five years of their ments. This can offset a decline in remittances because arrival (Dumont and Spielvogel 2008). The Mexican of returns. The return of Albanian migrants due to the 2010 census showed that 31 percent of migrants who Greek crisis, for example, increased Albania’s labor moved to the United States had returned. The rate force by 5 percent between 2011 and 2014, had pos- of return is estimated to be similar in the Philippines itive effects on the wages of low-skilled nonmigrants, (Wahba 2015b). and overall positive effects on the employment of those who stayed (Hausmann and Nedelkoska 2017). Return Factors driving voluntary return. The economic, polit- migration also has impacts on knowledge diffusion and ical, and social situation in the countries of origin and innovation in the countries of origin and destination destination influence a migrant’s decision to return. (Bahar and Rapoport 2017, forthcoming). Examples Key factors are peace and security, and access to jobs, often cited are returnees in Taiwan’s Hsinchu Science services, and housing in the origin countries. A deteri- and Industrial Park and the Indian software industry. oration of migrants’ situation in destination countries, Researchers and other employees returning from for example, due to an economic crisis, can encourage intrafirm assignments abroad also boost innovation return, but only if the situation in the countries of origin (Choudhury 2017). Factors that influence the impact is not assessed as worse. Several individual charac- are, among others, bureaucracy, business and invest- teristics of the migrant influence the rate of return— ment climate, labor market situation, recognition of age, gender, status (low skilled, high skilled, refugee, skills gained abroad, and ability to employ knowledge student), educational attainment, attachment to the gained abroad. Return migrants also have an impact origin country, degree of integration in the society of on governance and the quality of political institutions the destination country, networks in the origin and (Docquier et al. 2009; Li and McHale 2009; Beine and destination countries, family ties (marriage, children Sekkat 2013; Batista and Vicente 2011). Social norms left behind or children in destination country, elderly are also impacted by return migrants (Bertoli and parents left behind), options for mobility after return, Marchetta 2015). accumulation of savings, and so on. Return is more likely between countries at a similar level of develop- Studies suggest that return migrants often have better ment (Dumont and Spielvogel 2008). The rate of return employment possibilities in developing countries than is greater among the young and retirees but does not those who never migrated in the first place.18 There is seem to vary much by gender (Dumont and Spielvogel evidence that returnees enjoy upward occupational 2008; Gaulé 2014). The least and the most educated mobility. Also, most are self-employed, thus potentially seem to return in higher numbers compared with contributing to employment generation and economic those with an intermediate level of education. After growth at home (Mattoo and Amin 2007; McCormick having finished their studies, students return in higher and Wahba 2001; Wahba and Zenou 2012). Savings numbers than those who migrated to work or for family increase the probability of becoming an entrepreneur reunification purposes (Bijwaard and Wang 2016). among illiterate returnees in Egypt, whereas for literate 20 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K returnees the duration of the stay abroad, with implica- of skills and diplomas acquired abroad, dual citizen- tions for skill acquisition, may matter more (McCormick ship, the possibility to secure a permanent residency and Wahba 2001). permit even if the migrant leaves the country for more than 6 months (long-term multiple-entry visa arrange- Policies for promoting voluntary return. Several poli- ments to encourage circular migration), antidiscrimi- cies have been found to promote voluntary return and nation and equal access programs in the countries of successful reintegration. These include the recognition origin, and the portability of social benefits. 4 Regional Trends in Migration and Remittance Flows  emittances to the East Asia 4.1. R the cost of sending $200 averaging 8 percent in 2017 Q3 (World Bank 2017b). Costs in the Pacific Island and Pacific (EAP) Region to corridors originating from Australia and New Zealand Rebound in 2017 continued in the double digits. Remittance trends: Formal remittances to the East Asia Migration trends: In 2017, both Malaysia and Thailand and Pacific (EAP) region are expected to rebound by embarked on regularization programs targeting an estimated 4.4 percent in 2017, reversing its decline undocumented migrant workers. Unauthorized of 2.6 percent in 2016. Remittances to the Philippines migrants are separately estimated at nearly 2 mil- continue to remain resilient despite the political uncer- lion in both countries, and have been subjected to tainties in the Middle East, and are expected to grow by crackdowns and deportations in prior years. Most 5.3 percent in 2017, slightly higher than the estimated low-skilled foreign workers are in sectors shunned by 4.5 percent increase in 2016. Declining remittances from locals, such as construction, plantation, agriculture, Saudi Arabia have been more than compensated by and fishing. In Malaysia, a total of 155,680 applicants increasing levels from other Gulf Cooperation Council were received by the June dateline, far less than the (GCC) countries, particularly Qatar. anticipated 600,000 temporary work permits that authorities intended to issue.21 By the end of July, more Remittances to Indonesia are forecasted to continue its than 5,000 foreigners were detained. In Thailand, a downtrend with the maintenance of a ban on female new law on the recruitment of foreign workers initially domestic workers from traveling to the Middle East. came into effect on June 23, 2017, which required Inflows are expected to fall by a further 3.5 percent in employers to register all undocumented workers as an 2017 on the heels of an estimated decline of 7.1 percent initial step toward legalizing them. The law introduced in 2016. Vietnam’s remittances dropped by an estimated increased fines, which many considered prohibitive.22 10 percent in 2016, which is being attributed to a fall Fearing detention, more than 60,000 irregular migrants in domestic interest rates and lingering expectations were reported to have fled the country, mainly to of interest rates hike in the United States, dampening Cambodia and Myanmar in the week following the incentives for overseas Vietnamese to remit. The U.S. passage of the law. Subsequent appeals by employ- accounts for an estimated 60 percent of total remit- ers and intervention by the Cambodian government tances sent to Vietnam. Remittances to Vietnam are persuaded the Thai regime to postpone enforcement anticipated to recover by 16 percent in 2017 (figure 4.1). raids until January 2018. As of mid-August, more than 772,000 undocumented migrants registered, of which Remittance costs: Remittance costs to the East Asia 58 percent were from Myanmar and about 27 percent and Pacific region have been persistently high with from Cambodia. 21 22 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K FIGURE 4.1.  China Remains the Top Recipient of Remittances in East Asia and Pacific ($ billion, 2017p) (Percentage of GDP, 2017p) 62.9 19.9 14.4 32.8 11.8 10.5 9.9 7.2 13.8 6.4 4.7 8.7 3.2 6.6 2.6 1.5 0.7 0.4 0.3 0.1 Tonga Marshall Islands Tuvalu Kiribati Philippines Micronesia, Fed. Sts. Vietnam Samoa Timor-Leste Mongolia China Philippines Vietnam Indonesia Thailand Malaysia Myanmar Cambodia Mongolia Lao PDR Sources: IMF, World Bank World Development Indicators, and staff estimates.  emittances to Europe and 4.2. R percent in 2017 Q3, below the global average (7.2 percent). Among the G-8 and G-20 countries, sending Central Asia (ECA) Projected to money from Russia is the cheapest, with costs at 2.1 Increase in 2017 percent in 2017 Q3. Remittance trends: After declining for three consecutive Migration trends: Since the European Union and years, remittances to countries in Europe and Central Turkey deal in 2016, Italy has been the main destination Asia (ECA) are expected to grow by 8.6 percent in 2017. for migrants crossing the Mediterranean Sea. Until Besides a low-base effect, the recovery is mainly due to the end of August 2017, 98,266 people arrived in Italy, appreciation of the ruble against the dollar (figure 1.2). compared to only 14,382 in Greece and 9,738 in Spain. While outward remittances from Russia increased by However, new arrivals in Italy have fallen sharply since over 10 percent in dollar terms in the first part of 2017, July. This decline might be due to adverse weather remittances in ruble terms continued to decline. Going conditions, increased patrols by the Libyan coast forward, however, the economic recovery in Russia after guard, financial support from the European Union two years of recession, continued recovery in Kazakhstan, for the United Nations (UN)-backed government to and a robust activity and increased employment in the prevent trafficking, and support by Italy to control euro area imply a positive outlook for remittances during entry via Libya’s southern border. At the same time, 2018–19. Risks to the outlook are mainly on the down- arrivals in Spain coming from Morocco through August side, including an appreciation of the U.S. dollar. 2017 have tripled compared to the same period last year, according to the International Organization for Russia and Ukraine are the largest remittance recipi- Migration (IOM). The nationalities of those crossing ents in the ECA region. Kyrgyz Republic and Tajikistan the Mediterranean have changed compared to the are the most dependent on remittances, relative to last two years, with Syrians only making up around 7 their GDP (figure 4.2). percent of all arrivals. In 2015 top arrivals were from Syria, Afghanistan, Iraq, Pakistan, and Eritrea. In 2017, Remittance costs: The average cost for sending the arrivals are from Nigeria, Guinea, Côte d’Ivoire, money to the ECA region remained stable at 6.4 Bangladesh, and Syria. R E G I O N A L T R E N D S I N M I G R AT I O N A N D R E M I T TA N C E F L O W S 23 FIGURE 4.2.  Remittance-dependent ECA Countries Will Benefit from Recovery in 2017 ($ billion, 2017p) (Percentage of GDP, 2017p) 7.3 6.9 37.1 28.0 3.6 3.4 2.7 2.5 13.9 2.0 1.9 12.0 1.6 1.5 9.6 9.0 8.7 7.2 3.9 3.6 Kyrgyz Republic Tajikistan Armenia Georgia Montenegro Serbia Albania Ukraine Uzbekistan Bulgaria Russia Ukraine Romania Serbia Uzbekistan Kyrgyz Republic Tajikistan Bulgaria Georgia Armenia Sources: IMF, World Bank World Development Indicators, and staff estimates. Since the Brexit referendum, net immigration to the on the outlook for remittance flows to Mexico, Central United Kingdom appears to have declined, driven by America, and South America. However, growth in an increase in EU nationals leaving Britain, notably remittances is projected to moderate to around 4 from Eastern and Central Europe. Besides Brexit, the percent in 2018 and 2019. slowing UK economy and a weaker sterling, as well as improved conditions in Central and Eastern Europe Mexico, the region’s largest and the world’s fourth-big- played a role. gest recipient of remittances, is projected to post record remittances of $30.5 billion in 2017, a growth of 6.5 The share of respondents citing immigration as the percent over the previous year (figure 4.3). Remittances most important issue facing the European Union in the are even more important as a source of hard currency Eurobarometer survey rose from around 10 percent in for several smaller economies in the region. Data for 2011–12 to a peak of 58 percent in November 2015, the Dominican Republic, Honduras, El Salvador, and coinciding with the sharp rise in refugees and migrants Nicaragua show that remittance inflows grew by more arriving in Europe through the Mediterranean Sea. than 10 percent in the first seven months of 2017 By May 2017 this share had fallen to 38 percent, with compared with the same period in the previous year. terrorism seen as a more important issue. Remittances to Colombia and Guatemala grew by 13 percent and 16 percent, respectively, over the first eight months of 2017 compared with the same period in 2016. Remittance Flows into Latin 4.3.  Despite the increase in the number of deportations from the United States to Mexico, El Salvador, Honduras, and America and the Caribbean to Guatemala, remittances received by these countries Continue Rising in 2017 continue to rise. This is in part due to possible changes in migration policies. Migrants are sending their savings Remittance trends: Remittance flows into Latin back home in case they must return. America and the Caribbean (LAC) are expected to increase by 6.9 percent in 2017, reaching $79 billion. An improving labor situation for the foreign-born Economic growth and improvement in the labor population and Hispanics in the United States bodes market in the United States is having a positive impact well for the immediate prospects for remittances to 24 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K FIGURE 4.3.  Remittance Inflows to Latin America Were Strong Led by Mexico ($ billion, 2017p) (Percentage of GDP, 2017p) 30.5 31.2 18.4 17.4 16.7 12.2 8.7 10.3 8.4 5.7 5.5 7.2 5.1 4.0 5.3 3.0 4.4 2.7 2.7 2.5 Haiti Honduras Jamaica El Salvador Guatemala Nicaragua Guyana Dominican Republic Belize Dominica Mexico Guatemala Dominican Republic Colombia El Salvador Honduras Peru Ecuador Brazil Jamaica Sources: IMF, World Bank World Development Indicators, and staff estimates. the region. In August, the unemployment rate for the Migration trends: New international migration pat- foreign-born population in the United States was 4.2 terns are emerging in the Latin America region: (i) new percent compared to 4.6 percent for the native-born. flows of Haitians into Brazil and Chile; (ii) Venezuela Furthermore, a tighter U.S. labor market, which is close turning into a sending country instead of a receiving to reaching full employment, seems to be facilitating country for Latin America; and (iii) return migration to higher compensation in some sectors, especially in the Mexico and Central America. In 2016, nearly 49,000 construction sector, which tend to favor the average Haitians entered Chile where Peruvians and Bolivians volume of remittances. are the major group of immigrants.23 With the wors- ening of the political situation in Venezuela, several Remittance costs: The average cost of sending money neighboring countries are providing special mea- to LAC was 5.7 percent in the third quarter of 2017, down sures to receive Venezuelans.24 Finally, the number of slightly from the 6.2 percent recorded in the year-ago deportations and apprehensions have increased in the period, according to the Remittance Prices Worldwide United States, returning Mexicans, Salvadorans, and (RPW) data (World Bank 2017b). The region continues to Honduras to their countries. have the second-lowest average remittance costs among low- and middle-income regions following South Asia. Latin America is not different from other countries The average cost of sending money from the United in the world were the antiprotectionist measures are States, where the majority of LAC migrants reside, was being enacted or under consideration. Although 5.7 percent in the third quarter, still higher than the 3 Argentina and Ecuador have a more open migration percent target of the Sustainable Development Goals law that provides migrant rights and access to social (SDGs). The cost of sending money to LAC has gradually services, this pattern is being reverted. For example, declined over the past few years due to a combination of Argentina, Brazil, and Chile are in the process of high volumes and increased competition once exclusivity toughening their migration policies. In July 2017, the contracts were eliminated. However, given the available Dominican Republic granted a one-year extension technologies, remittance costs have not declined as fast for Haitian migrants trying to obtain their residency as in other regions. Remittance costs are higher still for permits. About 230,000 Haitians are facing this the Caribbean countries. situation. R E G I O N A L T R E N D S I N M I G R AT I O N A N D R E M I T TA N C E F L O W S 25 FIGURE 4.4.  Recovery of Remittances to the MENA Region Is Driven by Egypt ($ billion, 2017p) (Percentage of GDP, 2017p) 18.2 16.2 14.6 12.3 11.0 7.9 7.1 6.7 5.0 5.0 4.5 3.4 3.0 2.1 2.1 2.0 1.6 1.4 1.1 0.5 West Bank and Gaza Lebanon Yemen, Rep. Jordan Morocco Tunisia Egypt, Arab Rep. Djibouti Algeria Iraq Egypt, Arab Rep. Lebanon Morocco Jordan Yemen, Rep. Algeria West Bank and Gaza Tunisia Syrian Arab Republic Iran, Islamic Rep. Sources: IMF, World Bank World Development Indicators, and staff estimates. On September 5, 2017, the U.S. Department of the Arab Republic of Egypt, the largest remittance Homeland Security rescinded DACA (Deferred Action receiver in the MENA region (figure 4.4). Together for Childhood Arrivals), offering some provisions for with the removal of almost all capital controls and winding up the program.25 DACA recipients will retain an increase in domestic interest rates, the introduc- both the period of deferred action and their employ- tion of a flexible exchange rate regime in Egypt last ment authorization documents (EADs) until they expire, November 2016 has encouraged sending remit- unless terminated or revoked. As of March 2017, more tances through official banking channels. Due to than 800,000 undocumented youth have been granted robust growth in the euro area, we also expect remit- DACA which allows them to obtain a driver’s license, tances to Maghreb countries, which receive the bulk a Social Security number, and a two-year work autho- of their remittances from Europe, to remain stable or rization. Mexican children are the largest beneficia- grow modestly. ries under the umbrella program (689, 029). The U.S. administration has given the Congress a 6-month The growth outlook is dampened by the situation in window in which to pass legislation protecting these the GCC countries. Remittances from GCC coun- individuals. tries will be partly impacted in 2017 by lower growth due to oil production cuts and fiscal consolidation, which still weighs on activity in the non-oil sector. Remittances to the Middle 4.4.  Remittances from Saudi Arabia declined by 8 per- cent until July 2017, compared to the same period East and North Africa (MENA) in 2016. A new fee on expat dependents in Saudi Region to Recover in 2017 Arabia introduced this year and the 2018 value added tax (VAT) introduction are likely to further reduce Remittance trends: After two years of decline, remittances in the future. Nationalization programs in remittances to the Middle East and North Africa Saudi Arabia and the United Arab Emirates, favoring (MENA) region are expected to grow by 4.6 percent employment of nationals over foreign workers, are in 2017. Besides a low-base effect, the recovery is increasingly gaining traction. However, remittances driven by more stable exchange rate expectations in from Kuwait, where a significant number of Egyptians 26 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K work, increased by 7.4 percent year-on-year in the  emittances to the South 4.5. R first quarter of 2017. Only a small number of migrants from the MENA region work in Qatar and are thus Asia Region (SAR) to Remain likely to be affected by the sea, land, and air embargo Modest in 2017 on Qatar. Remittances to Jordan, which receives over two-thirds of its remittances from GCC countries, Remittance trends: Remittance growth in the South have grown modestly until July 2017, by around 1 Asia region is expected to remain weak with a mod- percent, due among others to increases in interest est 1.1 percent growth in 2017 due to the continuing rates that increased deposits by Jordanians abroad. impact of lower oil prices and “nationalization” polices Remittances to the MENA are expected to continue leading to constrained labor market conditions in the to grow by 2.9 percent in 2018. The main downside GCC. This represents a slight improvement over the risks include renewed declines in oil prices and further 6.1 percent remittance fall seen in 2016. nationalization policies. Oil price declines started impacting the region from Remittance costs: Sending money to the MENA 2015 onward and intensified in 2016. India witnessed region cost 7.4 percent in 2017 Q3, slightly above the an 8.9 percent remittance decline in 2016. Its remit- global average of 7.2 percent (World Bank 2017b). tance growth is expected to remain moderate at On average, it continues to be much cheaper to send 4.2 percent in 2017 amounting to about $65 billion. money within the MENA region than from outside Pakistan is projected to have 0.2 percent remittances the MENA region. Saudi Arabia is among the least growth in 2017 compared to 2.4 percent growth in expensive G-20 sending countries (4.7 percent). 2016. For Bangladesh, remittances would decline by Sending money from outside the region to Lebanon 5.2 percent in 2017 following a 11.4 percent decline in is the most expensive, but has slightly decreased over 2016. For Nepal, a projected decline of 4.0 percent in the last quarters. De-risking may have an impact on 2017 would follow a 1.8 percent decline in 2016. For costs, as foreign banks have ceased corresponding Sri Lanka, the 3.7 percent remittance growth in 2016 is banking relationships with a few smaller Lebanese projected to deteriorate to an 8.1 percent fall in 2017. banks owing to anti-money laundering/countering financing of terrorism (AML-CFT) concerns, IMF Remittance growth in the region is projected to remain 2017b. Remittance costs to Egypt also remain high moderate due to cyclical and structural factors. The for some corridors, due to increased exchange rate main cyclical driver of the remittance slowdown is low margins of some providers since the fluctuation of the growth in GCC source countries. In the longer run, pound in 2016 Q4. structural factors such as labor market adjustment in the GCC countries and anti-immigration sentiment in Migration trends: Over 600,000 Syrians, have returned many destination countries pose a considerable down- to their places of origin between January and July side risk. For the region, an increase of remittances 2017 (IOM 2017). The majority, 84 percent, had been of only 2.6 percent is expected in 2018. Bangladesh’s internally displaced; the remaining 16 percent returned remittance growth in 2018 is forecast at 3.1 percent, from Turkey, Lebanon, Jordan, and Iraq. According to India’s at 2.5 percent, Pakistan’s at 2.4 percent, and Sri the United Nations High Commissioner for Refugees Lanka’s at 2.2 percent. (UNHCR), there are still over 5.16 million registered Syrian refugees. Nearly 2 million people have been The region remains significantly dependent on remit- internally displaced in Yemen due to conflict since tances. Remittances would exceed 5 percent of GDP March 2015. On the other hand, regardless of the war, in 2017 for Pakistan, Bangladesh, Sri Lanka, and Nepal already over 50,000 migrants and refugees have arrived (figure 4.5). in Yemen this year, trying to reach Saudi Arabia, mainly from Ethiopia and Somalia. The IOM estimates that Remittances costs: The South Asia Region (SAR) there are around 2 million migrants and refugees in had the lowest average regional remittance costs of Yemen. 5.4 percent in the third quarter of 2017. Some of the R E G I O N A L T R E N D S I N M I G R AT I O N A N D R E M I T TA N C E F L O W S 27 FIGURE 4.5.  Remittances to SAR Countries Are Large in Absolute Terms and Relative to GDP ($ billion, 2017p) (Percentage of GDP, 2017p) 65.4 27.2 19.8 7.9 7.0 12.9 5.4 6.7 6.3 2.7 2.1 1.5 0.5 0.0 0.0 0.1 India Pakistan Bangladesh Sri Lanka Nepal Afghanistan Bhutan Maldives Nepal Sri Lanka Pakistan Bangladesh India Afghanistan Bhutan Maldives Sources: IMF, World Bank World Development Indicators, and staff estimates. lowest cost corridors originating in the GCC coun- fall in Pakistani migration to that country is antici- tries have costs below the SDG target of 3 percent. pated. The number of Indian workers emigrating to But there is little room for complacency. The highest Saudi Arabia dropped from 306,000 in 2015 to 162,000 cost corridors have costs well above 10 percent. in 2016; those going to the United Arab Emirates Burdensome regulations (AML-CFT) that raise the risk decreased from 225,000 in 2015 to 159,000 in 2016. profile of countries such as Afghanistan contributes to Total Indian worker outflows fell from 781,000 in 2015 this. A less competitive market environment also leads to 506,000 in 2016. Bangladesh bucked the trend to high costs. somewhat given earlier Saudi plans for recruitment of 400,000 workers (half of them female) from Bangladesh Migration trends: Persistence of fragility and conflict (reported in World Bank 2016b). Its migrants to Saudi in Afghanistan created forced displacement since the Arabia jumped from 58,270 in 2015 to 143,913 in 2016, 1980s. Recent reports indicate that many Afghan refu- but those to the United Arab Emirates dropped from gees from Pakistan, Iran, and Europe are returning. The 25,271 to 8,131. number of returnees is projected to soar from 700,000 in 2016 to over 3 million in 2017 (IMF 2017a). This has serious implications for the welfare of the returnees given the limited resources and capacity of the govern- Remittances to Sub-Saharan 4.6.  ment. Moreover, the region is facing another intensi- Africa Accelerated in 2017 fied refugee situation as over 400,000 Rohingyas have moved from Myanmar to Bangladesh. Remittance trends: Formal remittance inflows to the Sub-Saharan Africa region are projected to increase The economic slowdown in the GCC has adversely by 10 percent from about $34 billion in 2016 to $38 impacted migrant worker flows from the South Asia billion in 2017.26 This is partly because of improvement Region. For Pakistan, registered migrant workers in in economic activities in the high-income Organisation Saudi Arabia dropped from 522,750 in 2015 to 462,598 for Economic Co-operation and Development (OECD) in 2016; those in the United Arab Emirates fell from countries that are the major remittance-sending 326,986 in 2015 to 295,647 in 2016. With only 89,624 countries for Sub-Saharan Africa. In addition, regarding registered for Saudi Arabia up to July 2017, a steep intraregional inflows, Sub-Saharan Africa’s economic 28 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K FIGURE 4.6.  Countries with High Remittance Inflows and Remittances as Percentage of GDP ($ billion, 2017p) (Percentage of GDP, 2017p) 22.3 25.9 21.0 20.4 15.2 15.0 13.9 8.5 7.4 5.6 5.2 2.3 2.2 1.8 1.2 1.1 0.8 0.8 0.6 0.5 Liberia Comoros Gambia, The Senegal Lesotho Cabo Verde Togo Mali Nigeria Sao Tome and Principe Nigeria Senegal Ghana Kenya Uganda Mali Ethiopia South Africa Liberia Burkina Faso Sources: IMF, World Bank World Development Indicators, and staff estimates. outlook is expected to rebound in 2017 driven by the result, more official remittances are expected to flow three largest regional economies: Nigeria, Senegal, into the country in 2017 compared to last year. In addi- and Ghana. The West African Monetary Union tion, the Nigerian Government has successfully raised countries (Benin, Burkina Faso, Côte d’Ivoire, Guinea- $300 million in diaspora bonds to finance the country’s Bissau, Mali, Niger, Senegal, and Togo) are expected development projects (See box 4.1). to experience an upswing due to the appreciation of the euro against the U.S. dollar. The region’s major Remittance costs: Sub-Saharan Africa has always remittance-receiving countries are all projected to have recorded the highest remittance costs in the world. remittance growth in 2017: Nigeria is expected to have Recent months have seen a moderate decline in remit- 11.1 percent growth, Ghana 4.3 percent, and Kenya 4.1 tance costs from 9.4 percent in 2017 Q2 to 9.1 percent percent. But, remittances also account for a significant in 2017 Q3, compared to global averages of 7.3 per- share of GDP for some countries such as Liberia (26 cent and 7.2 percent respectively. In comparison, these percent), Comoros (21 percent), the Gambia (20 per- costs are almost the double of those in South Asia (5.4 cent), Senegal (15 percent), Lesotho (15 percent), Cabo percent) and are still very far from the SDGs’ goal of Verde (14 percent), and Togo (9 percent) (figure 4.6). achieving less than 3 percent by 2030. But remittance costs are heterogeneous across remittance corridors. Nigeria, with projected remittances of $22.3 billion Remittances sent from the United Arab Emirates to in 2017 would continue to be the largest remittance Sudan or South Sudan tend to have the lowest costs. recipient in the region. It is experiencing a recovery On the other hand, intraregional corridors originating in oil production with an increase in oil output during in Nigeria, Angola and South Africa are among the the recent months leading to improved confidence most expensive. for investment-oriented remittances. In addition, the Central Bank of Nigeria has managed to maintain a Migration trends: Over the first half of 2017, Sub- greater stability in the foreign exchange market during Saharan Africa has registered about 2.6 million new the recent months, by reducing the gap between the displacements with 2.1 million caused by conflicts and parallel market and the official exchange rates. As a violence and about 500,000 due to environmental R E G I O N A L T R E N D S I N M I G R AT I O N A N D R E M I T TA N C E F L O W S 29 BOX 4.1:  Diaspora Bonds for Nigeria—Successes and Shortfalls The Government of Nigeria issued its first diaspora bond to raise $300 million on June 19, 2017. A diaspora bond is a retail savings instrument marketed only to members of a diaspora (Ketkar and Ratha 2010). The bonds were issued at a coupon rate of 5.625 percent for a tenure of five years. The Nigerian Government designated the Bank of America, Merrill Lynch, and the Standard Bank of South Africa as joint lead managers for the sale. In July 2017, Fitch ratings rated the bond at B+ with a negative outlook. The bond was oversubscribed by 130 percent indicative of investors’ favorable perspectives of the Nigerian economy’s future prospects. It is the first time that a Sub-Saharan African country reached such an important milestone in the stock market. Nigeria’s diaspora bond is also the first that a Sub-Saharan African country registered in the U.K. Listing Authority and the U.S. Security and Exchange Commission, specifically targeting retail investors (Vanguard 2017). Nigeria’s government issued this bond as a new alternative to finance development projects. This initiative follows a decline in foreign exchange earnings due to a sharp decline in the prices of global crude oil which reached a 13-year low this year combined with a decline in oil production caused by the crisis in the Niger Delta. Nigeria’s economy is heavily dependent on the oil industry: in 2016, oil revenues accounted for 7 percent of total gross domestic product (GDP), 75 percent of foreign reserves, and 80 percent of total export earnings (Central Bank of Nigeria 2017). In the period 2010–15, oil revenues accounted on average for 75 percent of government revenues, but in 2016, this contribution dropped to 53 percent. This placed the public budget under distress and led to the devaluation of the naira. According to some critics, commercial banks may not know if buyers/investors are actually expatriate Nigerians or Nigerian migrants as the bonds were issued outside the country. disasters (IDMC 2017). About 46 percent of global and asylum seekers by end of July 2017.30 Somalia on new displacements due to conflicts happened in Sub- the other hand accounts for about 2.4 million forcibly Saharan Africa. The Democratic Republic of Congo is displaced by a conflict that has lasted for the last two the most affected country with almost a million newly decades.31 displaced people.27 The Gambia’s conflict caused 162,000 new displacements between January and June Recent climate-related disasters have also caused 2017. But as the political crisis was resolved on January about 588,000 new displacements over the first half 21, 2017, those who fled are now returning home.28 In of 2017. Countries that are the most affected include: the Lake Chad Basin, there are almost 2.3 million inter- Madagascar (247,000), Mozambique (167,000), Malawi nally displaced persons and the majority come from (34,000); Kenya (25,000), Sudan (9,000), and the Nigeria (more than 1.8 million), Chad (118,804), and Democratic Republic of the Congo (5,400). When a Niger (127,299) (UNHCR 2017).29 In the Horn of Africa, disaster hits poor countries in the Sub-Saharan African major flows are from South Sudan and Somalia. Since region, the affected population becomes more vulner- the eruption of the crisis in South Sudan in December able to extreme poverty and governments are often 2013, the country accounts for about 2 million refugees ill-equipped to face such catastrophes.32 30 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K R E G I O N A L T R E N D S I N M I G R AT I O N A N D R E M I T TA N C E F L O W S 31 Appendix Appendix A. Data Notes and Forecast Methodology A n extended discussion of data on migration and remittances is provided in the Migration and Remittances Factbook 2016 (World Bank 2016a). The following is an extract from the Factbook relating to the data on remittances cited in this Brief. Data on Remittances transfers” include current transfers from migrants not only to family members, but also to any recipient in The main source for data on remittance inflows and the home country. If migrants live in the host country outflows is the International Monetary Fund (IMF) for one year or longer, they are considered residents, Balance of Payments (BoP) database, which provides regardless of their immigration status. If migrants have information on annual and quarterly remittance flows. lived in the host country for less than one year, their Many countries are starting to use a new notion of entire income in the host country should be classified remittances introduced in the sixth edition of the IMF as compensation of employees. Balance of Payments and International Investment Position Manual (BPM6) (IMF 2009). According to the new definition, personal remittances are the sum of Caveats two main components: “compensation of employees” and “personal transfers.” Secondary sources of remit- Although the above residency guideline in the manual tance data are the websites of countries’ central banks is clear, this rule is often not followed for various or statistical offices, which provide high-frequency reasons. Many countries compile data based on the (monthly and/or quarterly) data on one or both of the citizenship of the migrant worker rather than on their above two categories. Personal remittances also con- residency status. Further, data are shown entirely as sist of a third item: “capital transfers between house- either compensation of employees or personal trans- holds,” but data on this item are difficult to obtain and fers, although they should be split between the two hence reported as missing for almost all countries. categories, if the guidelines were correctly followed. The distinction between these two categories appears Compensation of employees, unchanged from the to be entirely arbitrary, depending on country prefer- earlier BPM5, “represents remuneration in return for ence, convenience, and tax laws or data availability. the labor input to the production process contributed by an individual in an employer-employee relationship Some countries do not report data on remittances in with the enterprise.” The definition of “personal trans- the IMF BoP statistics. Several developing countries fers,” however, is broader than the old “workers’ remit- (for example, Cuba, Turkmenistan, Uzbekistan, and tances”—it comprises “all current transfers in cash or Zimbabwe) do not report remittance inflows data to in kind made or received by resident households to or the IMF, although it is known that emigration from from nonresident households.” Therefore, “personal those countries takes place. Some high-income 33 34 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K countries (notably Singapore and the United Arab the methodology described in the next subsection. By Emirates) do not report data on remittance outflows, taking into account both of these projections, and the although the countries are important destinations for current political and economic circumstances for each migrants. Some countries, such as China, have gaps country, the Migration and Remittances team arrives at in data following the transition from BPM5 to BPM6. estimated remittances for the year. Past data and some current trends are used to arrive at estimates in such cases. Methodology for Forecasting A global survey of central banks reveals significant heterogeneity in the quality of remittance data Remittances compilation across countries (Irving, Mohapatra, and The forecast of remittance flows is based on stocks of Ratha 2010). Some central banks use remittance data migrants in different destination countries and estimates reported by commercial banks, but do not adequately of how changes in the migrants’ income influence remit- capture flows through money transfer operators tances sent by these migrants.19 Remittances received (MTOs), post offices, and emerging channels such as by country i from country j can be expressed as: mobile money transfers. Even when data are available and properly classified, in some cases, these data are rij Mij Rij = Ri out of date. The methodologies used by countries for ∑ ∑ k k i =1 r Mij j =1 ij remittance data compilation are not always publicly available. It is hoped that the increased awareness where Ri is the total amount of remittances into country about the importance of remittances and the short- i (as reported in the balance of payments), Mij is the comings in the data on remittances and migrant work- stock of migrants from country i in country j, and rij ers will result in efforts to improve data collection. are the assigned weights to all remittance corridors.20 The weights rij are to be understood as remittance Perhaps the most difficult aspect of remittance data intensities for each corridor ij, and these depend on is estimating informal flows. One way to estimate the levels of gross national income (GNI) per capita in the true size of remittances is to undertake surveys migrant-sending countries (yi) and migrant-receiving of remittance senders and recipients. Without new, countries (yj): adequately randomized and representative surveys of recipients and senders, evidence from existing household surveys will only be indicative rather than rij = f ( y i , y j ) comprehensive. The elasticities (εj) of total remittance outflows (Rj) are estimated to measure the reaction of remittances Estimating Remittances for 2017 to the growth of migrant incomes, approximated by economic growth in migrant-receiving countries (Yj). The 2017 estimates are based on IMF BoP data sup- These remittance elasticities are used to forecast remit- plemented by data from central banks. Where current tance outflows from each migrant-receiving country data are not yet available, estimates and forecasts based on the most recent available forecasts of gross are used. For 2017, since only partial data are avail- domestic product (GDP) from the World Bank, using able, estimates of remittance inflows are obtained by the following formula: comparing two different projections. One projection ⎛ Y −Y j (t ) ⎞ ⎟ of the remittances inflows for the current year is based Ri ( t +1) = R j ( t ) ⎜ ⎜ ⎜1+ ε j j ( t +1) ⎟ ⎟ ⎟ on partial quarterly or monthly year-to-year growth ⎜ ⎝ Y j (t ) ⎟ ⎠ rates (usually based on data from the central bank or national statistical office), and applying that growth where Yj(t) is the nominal GDP of country j in period t. rate to the previous year for which the data are avail- Forecasts of outflows from all countries and estimated able. Another projection is based on forecasts from remittance intensities are then used to arrive at the A P P E N D I X A . D ATA N O T E S A N D F O R E C A S T M E T H O D O L O G Y 35 estimates of projected inflows for each remittance-re- IMF World Economic Outlook, and estimates of the ceiving country i: countries’ GNI per capita from the World Development Indicators. Portfolio flows and foreign direct invest- J Ri ( t ) = ∑ rijR j ( t ) ment data are taken from the World Bank Data Group’s j =1 International Debt Statistics. The 2017 estimates of those flows are based on the quarterly BoP data of 25 major economies (which account for about 85 percent Data on Remittance Prices, of total volumes) to estimate an aggregate trend. Refugees, GDP, and Other Variables Flows of refugees and asylum seekers are taken from the United Nations High Commissioner for Refugees The main source of data for monitoring the cost of (UNHCR) and Eurostat. making remittances through formal channels is the Remittance Prices Worldwide database (World Bank 2017b). Other than the data on migration and remit- Data on Recruitment Costs tances, the Brief uses forecasts of GDP growth prepared by World Bank (Development Prospects Group) and See box 2.1 in main text. 36 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K References David, A. M. 2017. “Back to Square One: Socioeconomic Integration of Deported Migrants.” Bahar, D., and H. Rapoport. 2017 forthcoming. International Migration Review 51 (1). “Migration, Knowledge Diffusion and the Comparative Advantage of Nations.” The Economic Journal. Docquier, F., E. Lodigiani, H. Rapoport, and M. 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D ATA N O T E S A N D F O R E C A S T M E T H O D O L O G Y 39 Endnotes 10. In the European Union, the rejection rate of asylum applications can be as high as 97 percent for Albanians, 64 percent for Afghans, and 14 percent for Syrians. 11. Mass expulsions are usually based on political decisions target- 1. See World Bank’s Global Economic Prospects, June 2017, for glob- ing foreigners or certain ethnic groups. Several mass expulsions have al growth outlook. occurred post–World War II. They may or may not be state driven, 2. The Financial Action Task Force (FATF), the international standard but involve massive forced movement of groups often from tradition- setter on anti-money laundering, defines de-risking as: “the phenom- al homelands into nations to which their ethnic or religious identity enon of financial institutions terminating or restricting business rela- ascribes them to (for example, ethnic Germans from Eastern Europe tionships with clients or categories of clients to avoid, rather than man- to Germany, Hindus from Pakistan to India, and Muslims from India to age, risk (. . .). De-risking can be the result of various drivers, such as Pakistan). concerns about profitability, prudential requirements, anxiety after the 12. In the case of Côte d’Ivoire, a social or identity crisis led to the global financial crisis, and reputational risk” (http://www.fatf-gafi.org/ expulsion of hundreds of thousands of migrants and resulted in polit- publications/fatfgeneral/documents/rba-and-de-risking.html). ical crisis and conflict. For the Dominican Republic, ethnic national- 3. In 2015, the World Bank published results from two surveys on ism led to changes in the country’s constitution detrimental to foreign this subject with the support of the Committee on Payments and descendants: changes in the constitution for the denationalization Market Infrastructure and the Financial Stability Board. Both sur- of Haitian descendants going back to 1929. In the case of Pakistan, veys found that financial institutions were terminating their relation- increasing violence and insecurity attributed to Afghan refugees raised ships with respondent banks and remittance companies. The drivers tensions between Pakistan and Afghanistan and led to a massive exo- for this behavior were found to vary: bottom-line profitability deci- dus of Afghans back to their home country. sions, perceived AML/CFT risks, or more traditional prudential issues; 13. https://www.usnews.com/news/the-report/articles/2017-03-10/ http://www.worldbank.org/en/topic/financialmarketintegrity/brief/ mass-deportations-could-hurt-the-economy; https://www.ameri- de-risking-in-the-financial-sector. canprogress.org/issues/immigration/reports/2016/09/21/144363/ 4. The Asociación de Supervisores Bancarios de las Américas also the-economic-impacts-of-removing-unauthorized-immigrant-workers/. reported that remittances to LAC have been affected (about 60 per- 14. There are several definitions of reintegration, two are which are per- cent of their members indicated the impact of bank accounts closures). tinent to our discussion. Reintegration, therefore can be approached 5. These implicit country-­‐specific migrant quotas may reflect the as: desire to control the size of various foreign nationalities, rising and “..the process through which a return migrant participates in falling depending on factors such as security considerations, demand the social, cultural, economic and political life in the country of for certain occupations, or bilateral negotiations between sending and origin” (Cassarino 2008). receiving countries. “..a process that should result in the disappearance of 6. It would be instructive to see if costs incurred rise again for countries difference in legal rights and duties between returnees and such as Pakistan whose emigration flows to Saudi Arabia have fallen due their compatriots and the equal access of returnees to services, to a weaker Saudi economy and its workforce nationalization program. productive assets and opportunities” (UNCHR 2004). 7. GCC countries admit migrant workers based on a sponsorship Sustainable return for the individual is: (kafala) system which ties temporary work visas to an employer (or sponsor). Migrant workers cannot change jobs without the explicit per- “.. when returnees’ social economic status and fear of violence or mission of the employer. persecution is no worse, relative to the origin population, a year after their return” (Black et al. 2004). 8. Following the large increase in the number of asylum seekers in the OECD countries, return migration initiatives including forced and “..the ability [of returnees] to secure the political, economics, voluntary return have been implemented in several countries. In March [legal] and social conditions needed to maintain life, livelihoods 2017, the EU Commission launched a renewed Action Plan on Return; and dignity” (UNHCR 2004). https://ec.europa.eu/home-affairs/sites/homeaffairs/files/what-we-do/ 15. A study by Majidi (2009) of returned Afghan asylum seekers whose policies/european-agenda-migration/20170704_action_plan_on_the_ applications were rejected found that 74 percent of the respondents central_mediterranean_route_en.pdf. wanted to migrate again irregularly, suggesting that their reintegration 9. Within the category of forced returnees, there are various subcate- was unsuccessful. gories based on the extent to which the departure is enforced, assisted, 16. See Sachverstaendigenrat deutscher Stiftungen fuer Integration or unassisted. This also impacts migrants’ willingness and readiness to and Migration (2017). return. In the case of deportation, the persons are removed by force; they have the lowest willingness and readiness to return. In the case of assist- 17. Germany’s incentive program—Reintegration and Emigration ed return, financial incentives are given to encourage return. Persons Program for Asylum-Seekers in Germany (REAG)/Government Assisted without a legal right to stay may also return without any assistance. These Repatriation Program (GARP), implemented by the International definitions are in line with recent literature (Cassarino 2004; Haase and Organization for Migration (IOM)—provides a financial assistance of Honerath 2016) on “willingness to return” and “readiness to return.” €200, and according to the country, between €300 and €500 as finan- Forced returnees are disadvantaged on both counts and are likely to face cial assistance to “start” again in the country of origin. Excluded from more psychosocial, financial, and labor market reintegration challeng- this financial incentive program are persons who can enter Germany es. In some circumstances, migrants’ right to stay expires. The return- without a visa (for example, migrants from the five Balkan countries ees in that case have more readiness to return (since they are aware that as well as Kosovo). To these persons only the travel costs are covered. the time to depart is approaching), and, in cases where they could have A person can benefit from REAG/GARP only once, and is obliged to potentially renewed their visa, also more willingness to return (since they leave Germany forever. Persons who do not follow this are obliged have not opted for renewal). Voluntary returnees could be: (i) temporary to pay back the REAG/GARP financial support. Since February 1, residents with valid visas, permanent residents, or naturalized citizens, or 2017, Germany introduced the “StarthilfePlus” program, which is (ii) first- or second-generation diaspora. The underlying drivers of these designed for persons whose asylum request is still pending or whose returns are likely to be different. The former is usually linked to life-cycle status allowing a stay in Germany is still effective. This program pro- plans such as retirement or return to family but might also be driven by vides €1,200 to persons who leave Germany before the end of the economic reasons like unemployment in the country of destination. The asylum procedure, and €800 for those whose deadline for staying in latter may be driven by entrepreneurial, altruistic, or cultural motives. Germany has not yet passed. The European Reintegration Instrument 40 M I G R AT I O N A N D R E M I T TA N C E S : R E C E N T D E V E L O P M E N T S A N D O U T L O O K Network (ERIN) is the EU’s Program for Reintegration for returnees to 25. DACA was signed as an executive order in June 2012 to protect Afghanistan, Iran, Iraq, Morocco, Nigeria, Pakistan, Russia, Somaliland, children from being deported. It is only a short-term protection that Sri Lanka, and Ukraine. The objective is to avoid new migration due to does not provide for a legal status or a path to citizenship. https:// economic reasons. Therefore, ERIN provides integration in the labor www.dhs.gov/news/2017/09/05/memorandum-rescission-daca. market. Germany’s development cooperation agency has received €50 26. The total amount of remittances to Sub-Saharan Africa may not be million for reintegration programs in 2017. See Sachverstaendigenrat well recorded in official remittance data. Migrants can use official chan- deutscher Stiftungen fuer Integration and Migration (2017). nels as well as unofficial or informal channels to remit their money back 18. There is strong evidence that in Egypt temporary migration results home. Very often, official remittance data are problematic and have a in a wage premium upon return compared with nonmigrants (Wahba lot of discrepancy depending on which source they come from. One 2015a). Mexicans returning from the United States also get a wage pre- major reason for such discrepancy is that remittances sent through mium (Reinhold and Thom 2013). informal channels are often very difficult to capture. The World Bank has been helping some countries to improve their remittance data 19. For this purpose, the bilateral migration matrix, based mostly on collection. the estimates prepared by the United Nations Population Division (with adjustments made for certain countries), is used to provide the 27. As of June 2017, the Democratic Republic of the Congo had 3.7 mil- most comprehensive estimates of bilateral immigrant stocks world- lion IDPs, an increase of about 2 million compared to last year. The situ- wide. See World Bank (2016a). ation in the Central African Republic has deteriorated with a resurgence of violence since September 2016, which has led to more than 206,000 20. See Ratha and Shaw (2007) for a fuller explanation of the method- new displacements. Resource-based tensions are emerging and about ologies used to estimate the bilateral remittance matrixes. 60 percent of the country is under the control of armed groups. 21. In Malaysia, employers were given 5 months’ notice until June 30, 28. Following the outcome of presidential elections in December 2017, to obtain temporary work permits (or E-cards) for their undocu- 2016, where the former president contested the outcomes, over mented employees. Registered workers have until mid-February 2018 200,000 Gambians had fled the capital fearing possible armed conflict to submit the necessary documents for proper work permits or risk in the country. detention and deportation. Most of the applicants were migrants from Bangladesh, followed by those from Indonesia, Myanmar, and Nepal. 29. Most of these IDPs are forcibly displaced by insurgency in the Since the passing of the dateline, local authorities conducted multiple region. In Nigeria, the escalation of terrorist attacks by Boko Haram raids in major cities. By the end of July, 5,065 workers were detained since 2014 has caused the displacement of millions of people with- and 108 employers were arrested. Employers complained that they in and beyond the country’s borders. The first half of 2017 has seen paid agents to make applications on their behalf which were never 142,000 new displacements across the country. processed and expressed concerned that the crackdown would further 30. Over the past 12 months, about 1,800 South Sudanese have dilute labor supply and raise wages in the construction sector. Between arrived every day in Uganda, and they totaled 1 million by August 17, 2014 and 2016, a total of 146,000 undocumented workers in Malaysia 2017 (UNHCR 2017). In addition to these South Sudanese refugees in were detained from 26,870 enforcements raids. Uganda, more than 1 million are hosted in Sudan, Ethiopia, Kenya, the 22. In Thailand, low economic growth has contributed to rising resent- Democratic Republic of the Congo, and the Central African Republic. ment against migrants. The country is also grappling with a shrinking Ethiopia is another country with high number of new conflict-related workforce due to a fast-aging society and declining fertility rates. An IDPs, estimated at about 213,000 in June 2017 with a total of 588,000 employer could be fined up to 800,000 baht ($24,000) per undocu- IDPs in the country. Ethiopia has experienced civil unrests since mented worker and workers could be jailed for up to 5 years or be November 2015, as a result of disputes around land issues. As the sit- fined up to 100,000 baht ($3,000) or both. Registered workers must uation escalated, the government declared a state of emergency on also pass an interview with the Thai Employment Department to verify October 8, 2016, which was recently lifted on August 4, 2017. if they are working for their stated employers, failing which they have 31. There are 1.5 million IDPs in Somalia, and another 900,000 ref- to return to their home country. According to Thai sources, nearly 7,700 ugees in neighboring countries, including Kenya (308,700), Yemen irregular Cambodian workers will have to return, having failed their (255,600), and Ethiopia (246,700). In addition to the IDPs due to con- interviews. The Cambodian government has also announced plans to flicts and famine, Somalia is also facing important inflows of returnees send 360 officials to Thailand between mid-September and December from Kenya (60,800) and Yemen (30,600). Projections indicate that by for a 100-day campaign to assist a targeted 160,000 of their undoc- the end of December 2017, Somalian refugees including IDPs and umented citizens in Thailand to obtain proper paperwork. Irregular returnees will reach 2.97 million. migration from Cambodia to Thailand is blamed on costly documen- tation fees and a poor understanding of formal procedures. According 32. Even high-income countries face challenges in rehabilitating disas- to Cambodia’s immigration police, nearly 14,332 undocumented ter victims. These are more amplified in poor countries. Recent cli- Cambodians were deported from Thailand in the first quarter of 2017, mate disasters include Hurricane Harvey, which hit Texas on August up by 27 percent over the same quarter a year ago. In prior years, an 25, 2017. This was the most powerful storm to hit the city in 50 years. estimated 52,000 Cambodians were deported by Thai authorities in It killed an estimated 50 people, damaged some 200,000 homes, and 2016, another 67,087 in 2015, and more than 270,000 in 2014. forced more than 1 million people to evacuate. But 12 years before, on August 29, 2005, Hurricane Katrina made landfall in New Orleans 23. https://www.usnews.com/news/best-countries/articles/2017-07-10/ leaving 80 percent of the city underwater. At least 400,000 residents south-americas-progressive-immigration-laws-begin-to-fray. were forced to evacuate, some for few days and some forever. By 24. https://www.theguardian.com/world/2017/jul/17/venezuela-mi- September 2005, about 1.36 million applications had been submitted grants-americas-leaving-home. For example, Colombia grants a spe- to the Federal Emergency Management Agency (FEMA) by former cial border area migration permit for 90 days. In February 2017, Peru Gulf Coast residents for Katrina-related disaster assistance. The federal granted “Permisos Temporal de Permanencia (PTP) for one year for all government spent about $110 billion to cover all the damages caused Venezuelans residing in Peru at that time: http://www.reuters.com/arti- by Katrina. However, according to the Texas governor, Harvey’s dam- cle/us-peru-venezuela/peru-to-give-visas-to-thousands-of-crisis-wea- ages were much more than Katrina’s and could cost the government ry-venezuelans-idUSKBN15I2OL. between $150 billion and $180 billion. MIGRATION AND REMITTANCES Recent Developments and Outlook This Migration and Development Brief reports global trends in migration and remittance flows, major policy developments, and the Sustainable Development Goal (SDG) indicators for reducing remittance costs and recruitment costs. The Brief reports new data on recruitment costs, a potential indicator for the SDG of promoting safe and regular migration. The special focus of the Brief is return migration, a challenging issue around the world amid a rise in asylum seekers and undocumented migrants. 11463