workers' remittances and economic development

Workers’ Remittances and Economic Development

Nicoletta Batini IMF-World Economic Outlook April 15th, 2005

Inter-American Development Bank

World Economic Outlook April 2005

Workers’ Remittances and Economic Development

April 2005

Workers’ Remittances and Other Foreign Exchange Inflows to Developing Countries (1970–2003; billions of U.S. dollars) 200

FDI 150 100

Remittances

50

Official aid 0

Non-FDI private capital inflows 1970

76

82

88

94

Sources: IMF, Balance of Payments Statistics Yearbook; and IMF staff calculations.

97

-50 2003

Developing Countries: 20 Largest Recipients of Remittances (1990–2003 average; billions of U.S. dollars) India Mexico Philippines Egypt Turkey Morocco Lebanon Russia Brazil Pakistan Bangladesh Jordan Thailand Serbia and China Colombia El Salvador Yemen, Rep. of Iran, Islamic Rep. of 0

2

4

Sources: IMF, Balance of Payments Statistics Yearbook; and IMF staff calculations.

6

8

Developing Countries: 20 Largest Recipients of Remittances (1990–2003 average; percent of GDP) Lesotho Tonga Lebanon Samoa Jordan Bosnia & Kiribati Cape Verde Albania West Bank & Yemen, Rep. of El Salvador Moldova Grenada Jamaica Serbia & Vanuatu Haiti Georgia 0

10

20

30

Sources: IMF, Balance of Payments Statistics Yearbook; and IMF staff calculations.

40

50

Remittances and Other Foreign Exchange Flows: Volatility Inflows (1980–2003) 5 4 3 2 1 0

Remittances Official aid

FDI

Non-FDI private capital inflows

Sources: IMF, Balance of Payments Statistics Yearbook; and IMF staff calculations.

Exports

Transfer Costs to Some Leading Recipient Countries (Percent of amount sent; countries ordered by total remittance inflows) India Mexico Philippines Turkey Morocco Pakistan Bangladesh Jordan Thailand Serbia & China Bosnia & Colombia Yemen, Rep. of Domincan Republic Poland Sri Lanka Nigeria Indonesia Tunisia Malaysia Syrian Arab Jamaica

0

2

4

6

8

10

12

Sources: Western Union; Women’s World Banking; and IMF staff calculations.

14

16

18

Regression Results: Impact of Workers’ Remittances Dependent Variable

Full Sample

Remittance-Dependent

Output growth

-0.30

-0.27

Education

-0.43

1.93

Investment

0.48

0.12

Poverty headcount

-0.02 *

-0.02 *

Poverty gap

-0.01 *

-0.01 *

Output volatility

-0.29 **

-0.17 **

Output worst drop

-0.74 **

-0.63 **

Consumption volatility

-0.45 **

-0.19 **

Investment volatility

-1.31 *

0.01

Credit ratings

0.22 **

0.22 **

Growth

Poverty

Volatility

Source: IMF staff calculations.

Thank You

April 2005

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