R itt f S iRemittances from SpainResearch findings and policy implications

"Remittances, the unknown aid. An international perspective“ Stockholm 20/01/2011/ /

Iñigo Moré, Research Centre Remesas.org

www.remesas.orgadmin@remesas.org

1.-Remittances in the past

2.-Remittances now

3 -Conclusions3.-Conclusions

History countsHistory countsEuropean countries developed policies on remittances since 1901, when Italy enacted the first Law on remittances.

History countsHistory countsSpain created some of the first policies on remittances, but for its own development…

1922 Co development1922-Co-developmentRoyal Decree December 17th 1922

1931-AccountingIncluded in the “Balances de pagos internacionales”, Spain’s first balance of payments: remittances were 160 million/Pts gold= 16% of current account income

1960-International treaties“Convenio de Migración entre España y la RepúblicaConvenio de Migración entre España y la RepúblicaArgentina“, first international treaty on remittances (3 arts on remittances)

History countsHistory countsUntil 1920 Spain’s remittances were bills of exchange or checks: average price 0,5%. Then switched to financial intermediaries

History countsHistory counts…because Spain, as other EU countries (Sweden?), financed its development with remittances (until 2004)

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Remesas de los trabajadores desde y hacia España(%/PIB)

0

1

2

3

4

Pagos

Ingresos

0

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

Nota: Los datos anteriores a 1990 se han calculado utilizando tasas de variación anual de de conceptos que no son totalmente homogéneos. Para los pagos no ha sido posible realizar dicho enlace para datos

anteriores a 1981, pero su importe para dichos años es prácticamente irrelevante.

Hi t t S dHistory counts: SwedenWhen Sweden was also a poor country…

In 1900 Sweden received remittances that were 1% of th GDPthe GDPLindhal, Erik; Einar Dahlgren, and Karin Kock. National Income of Sweden, 1861‐1930. 2 vols. London: P.S. King & Son, Ltd., 1937.

Real figures could be higherThe authors offer a net estimation. They multiply by three the difference between the money orders sent by immigrants in the United States and those leaving

History countsHistory countsDifferences between 1900 and now

The actors1900: women remitted money as members of their families, now as individuals

The amounts1900: remittances impact was local rather than global

The problems1900: price was not a problem, now it is

The solutions 1900: receiving countries created policies on remittances, now it is sending countries

Now: Remittances from SpainNow: Remittances from Spain60% of Spain’s remittances go to Latinamerica, 8% to Morocco

Spain's remittances impact 2007‐2008p p2007 2008

GDP in Remitt. %R/PIB GDP in Remitt. %R/PIBUS$ mill. US$ mill. US$ mill. US$ mill.

Bolivia 13.292 1.088 8,2% 17.413 1.061 6,1%Ecuador 45.789 1.759 3,8% 52.572 1.545 2,9%Paraguay 12 222 370 3,0% 16 006 450 2,8%Paraguay 12.222 370 3,0% 16.006 450 2,8%Senegal 11.300 243 2,2% 13.350 265 2,0%R. Dominicana 40.988 474 1,2% 45.597 427 0,9%Colombia 207.991 2.118 1,0% 240.654 2.076 0,9%Marruecos 75.116 602 0,8% 86.394 565 0,7%Rumanía 169.286 636 0,4% 199.673 588 0,3%Perú 107 399 255 0 2% 127 598 300 0 2%Perú 107.399 255 0,2% 127.598 300 0,2%Pakistán 144.032 139 0,1% 167.640 196 0,1%Filipinas 144.062 127 0,1% 168.580 138 0,1%Brasil 1.333.502 555 0,0% 1.572.839 565 0,0%Spain 1.439.983 8.444 0,59% 1.611.767 7.840 0,49%fuente: PIB: World Economic Outlook Database, April 2009, Remesas: Banco de España

N P i i blNow: Price is a problemRemittances price average 6% while in the past is was 0,5%

Spain-Morocco remittancesPrice ranking in % of a 150€ remittance

N W ki g diti tNow: Working conditions countRemittances mean foreign workers, not just foreigners

Now: Time countsNow: Time countsRemittances paradox: as time passes, remittances increase at the aggregate level but fade at the individual level

Now: Gender countsNow women are the leading remittances senders (from Spain)

S i itt b d f th dSpain: remittances by gender of the senderResults of Remesas.org research for Instituto de la Mujer 2007Gender W. Average Median Mode Number of Estandar Variance % of Total

remittance in € in Euros in Euros observations deviation Number

Men 350 €          200 €   100 €       21.388 448 200546,0 38,6%

Women 323 €         186 €   100 €     30.919 432 186492,7 61,4%, ,

Spain: remittances as a % of salaryResults of Remesas.org research for Instituto de la Mujer 2007

Gender Anual averageMontly average Average Remittance %salary salary Remittance of salarysalary salary Remittance of salary

Men 15.041 €      1.074 €    350 €     33%Women 11.286 €       806 €        323 €       40%

N P li tNow: Policy countsMany countries believe in remittances, but for the wrong reasons

Th b t dThey can be taxedColombia’s tax on remittances: 0,4%; Bolivia’s tax on remittances: 1%; Brazil: 0,38%...

They are a tool for foreign policyy g p yUSA limits its flow towards countries like Cuba; Russia threatens to do the same with countries like Georgia

They are dangerous for securityAML/CT g l ti ld idAML/CT regulations worldwide

They are a good business for friendsExclusivity agreements: Public Postal Operators, Cuba

ConclusionsAn agenda for remittances

Remittances need institutionsRemittances need institutionsIt is impossible to manage efficiently 8% of the GDP without institutions, laws, ministries, statistics…because remittances are millions, but of persons

Price, gender and time are the main variablesResearch feeds policy

Migrants can invest, but are not investorsThey need technical trainingThey need technical training

Remittances from SpainResearch findings and policy implicationsimplications

“Nothing so denies a person liberty as the total absence of money”

Iñigo Moré, Research Centre Remesas.org

www remesas orgwww.remesas.orgadmin@remesas.org