International Workshop on Migration and Remittances in Central Asia

1. International Workshop on Migration and Remittances in Central Asia Dr. Manuel Orozco Moscow July 2-3 2009

2. Migration, diasporas and development: five considerations • Dynamics of international labor mobility; • Patterns in the economic activities of migrants; • Tranantionalism, diasporas and development; • Policy issues on development with diasporas • Lessons learned on development with diasporas

3. Migration in the global context • Globalization and political and economic openings have led to increased foreign labor mobility, which has been influenced by demographic, economic, transnational and other factors, such as policies to manage migration; • This mobility in turn is accompanied to practices that create ties and include family and remittance transfers, demand of services (i.e. telecommunications), consumer goods or travel, capital investment, and charitable donations to philanthropic organizations that raise funds for migrant home communities

4. 1. International Labor Mobility • International labor mobility is increasing in scope and intensity • Castels and Miller refer to it as “part of a transnational revaluation that is reshaping societies and politics around the world” • There are an estimated 190 million migrants worldwide, and the number of migrants is increasing in traditional and less traditional host countries • However, a significant percentage of migrants, 44%, live in North America and Western Europe • Trends show that global market integration is primarily regionally based and that labor market integration follows this pattern

5. Distribution of the World’s Migrants

6. Factors Affecting International Labor Flows: a) demographics • Population decline in industrialized countries is a driving factor of foreign labor demand • Between 2010 and 2050, the UN estimates that 2.3 million people will migrate from developing to developed countries • Projections for 2005-2050 show that stock of international migrants will reach 103 million • This will counterbalance the excess of deaths over births in developed countries during the same time period, which is estimated to be 74 million people

7. Factors Affecting … b) feminization of labor; c) regional economic growth • A demand for low cost female labor is driving an increase in female labor migration • UN projections estimated the female share of labor migration would reach 49% by 2005, but most likely this percentage is higher • Regional economic growth is also driving the demand for foreign labor as ‘emerging markets’ (historically migrant sending countries especially in Asia and Latin America) increasingly rely on foreign labor

8. Russia and Kazakhstan • Labor migration to Russia and Kazakhstan are an important illustration of this global migration flow at a regional scale • The contemporary movement of people from Central Asian and the South Caucasus into Russia and Kazakhstan (and Ukraine more recently) is a result of increasing development in Russia from the oil and gas industries, as well as from population decline

9. One of the most important outcomes of globalization and migration has been the formation of transnational families and communities, which maintain relations and connections that encompass both the home and host societies As families maintain linkages, the costs of migrating and staying in touch are facilitating labor mobility Interdependence on migrant labor is being furthered by economic and operating linkages between home and host countries Factors Affecting. . . d) transnationalism

10. Factors Affecting …democracy and trade • The relationship between migration and political stability is negative as politically stable countries have fewer out-migrants • Ties and proximity to wealthier countries have a positive relationship to out-migration

11. Factors affecting: migration management… • Managed migration or migration policy practices consider solutions to the interplay between varying trends in the supply and demand for foreign labor mobility, and the law. • Depending on these interacting patterns there will be different models or policy designs but for the most part, countries’ policies and laws pay attention to the legal and managed treatment of international labor mobility along four contexts 1.       -Guest worker program: agricultural, farm worker programs 2.       -Limited professional mid-level skill import (nurses, teachers) 3.       -High skill labor mobility with time limits (scientists, engineers) 4.       -Levels of strict border controls for unskilled labor • These approaches intersect however with two other patterns, regulations on family unification and refugee/asylum policies. • The Americas for the most part faces approaches on all these but with differentiated treatments depending on the countries in the relationship.  

12. Practices on migration management…

13. U.S. Agricultural Worker Programs • National Farmworker Jobs Program (NFJP): nationally directed program of employment assistance for migrant and seasonal farmworkers (MSFWs) to “counter the impact of the chronic unemployment and underemployment experienced by MSFWs who depend on jobs in agricultural labor” • In 2008, the NFJP program received $74,289,093 in funding and there were 17,807 program participants in 2007 Source: US Department of Labor < http://www.doleta.gov/MSFW/html/docs/gpra-prog.cfm>

14. U.S. Agricultural Worker Programs • The NFJP provides funding to community organizations and public agencies that assist MSFWs and their families attain greater economic stability. It helps farmworkers acquire new job skills for occupations that offer better employment opportunities. It provides housing services (payments for emergency and temporary housing, etc) • Additional NFJP services include: -WIA Core Services: skills assessment and job search services -WIA Intensive Services: assessment, basic education and employment development planning through a case management based individual service strategy -Training Services: occupational skills and job training -Related Assistance Services: short-term direct assistance to address an urgent or life threatening matter that enable farmworkers (including their family members) to retain their agricultural employment

15. Guest Worker Programs: IOM Canada-Guatemala The IOM – Guatemala began a temporary labor migration program to Canada from Guatemala in 2003, carried out by the Ministries of Foreign Affairs and Labor with technical assistance from the IOM. In 2003: In Quebec with 215 workers in agriculture By 2009: Expanded to British Columbia, Alberta and Ontario, and different sectors (including poultry farms, landscaping, laundry services and construction) and reached a total of 3,700 workers IOM works with FERME an employer association in Montreal that coordinates the seasonal hiring of temporary migrant workers IOM provides technical assistance to the Guatemalan government, participates in the selection of workers, and advises those selected on travel documents and other requirements for travel to Canada The worker’s contract ranges between 4-6 months, and provide coverage under Canadian labor laws

16. Guest Worker Programs: IOM Canada-Guatemala • 14.4% of all workers were provided assistance to open a bank account in BANCAFE before leaving to Canada. That allowed their spouses to withdraw cash from ATMs and it lowered the remittance costs. • According to a 2007 IOM report, 77.6% of participants in 2005 sent remittances to their families, via the following: Monitel (31.0%), BANRURAL (12.1%), Vigo (10.3%), and others (24.1%) • Of those that did not remit, 15.5% did not know about the existence of these banks; 8.6% said there was no person in charge of this procedure; 5.2% said employers did not help them send remittances by these means; 8.6% considered this an extremely difficult procedure; and 1.7% said that in their municipalities there are no ATMs. • According to an 2007 IOM report, the income earned by workers from the program is invested mainly in house building (45.3%); paying debts (10.8%); consumption (9.8%); shoes and clothes (5.5%); furniture and equipment (4.5%); and education for children (3.8%)

17. Guest Worker Programs CIRCULARITY 3,313 3,400 Growth of number of workers 3,200 Permanent old workers 3,000 2,800 Workers of previous years 2,600 1,642 New workers 2,400 2,252 2,200 2,000 1,015 1,800 1,671 1,600 1,400 1,263 1,237 1,200 523 1,000 814 800 740 668 280 537 600 324 443 388 400 215 295 269 195 203 149 200 128 117 102 129 131 100 92 80 0 2003 2004 2005 2006 2007 2008

18. Skilled Labor Migration: Caribbean Nurses Programs • Managed Migration Program: program for addressing nursing services capacities and managing migration flows between Caribbean countries and the U.S., as well as the U.K and Canada. • As individual countries have adopted strategies aimed at managing migration in their own contexts, the aim of this program is for macro-management of migration through trade and multilateral agreements relating to nursing service and education. • Key development entities such as CARICOM and PAHO have documented the achievements and progress of the Managed Migration Program. The achievements to date fall into two categories: (1) the development of national, regional, and global cooperation focusing on the nursing workforce; and (2) program-specific achievements within the six critical areas of work.

19. Skilled Labor Migration: Caribbean Nurses Programs • Initiatives on skilled labor in the region include: • Jamaican nurses working in Miami: Jamaican nurses work in Miami 2 weeks per month (travel costs are paid by the nurses) and work in Jamaica for the remainder of the month. Through this arrangement, nurses gain additional skills, earn more money to support their family, and assist with their own country's staffing needs • Grenada/Antigua partnership: through agreements between the two Ministries of Health in 2003, Grenada opened up its excess training capacity to nursing students from Antigua. Students receive nurses training in Grenada at low cost. The Regional Examination for Nurse Registration and Common Nursing Education Standards in the Caribbean allow trained nurses to return and practice in Antigua • St. Vincent Model: the government of St. Vincent is establishing bilateral agreements to obtain compensation from health care provider institutions that recruit nurses away from St. Vincent. At the time of hiring the U.S. partners will reimburse the government of St. Vincent with training costs for each Vincentian nurse employed in their organizations, to then reinvest the funds to enhance nurse training

20. Migration Management Programs: Costa Rica - Nicaragua • Co-Development Project between Costa Rica and Nicaragua: project financed by AECI (Agencia Española de Cooperación Internacional) in cooperation with the IOM Guatemala • The project aims to improve the contribution of migration movements to the development processes of both countries and improve social conditions in areas with large migrant populations as well as in migrant-sending locations. • The benefits provided by this program include:regulated migration of temporary/seasonal workers from Nicaragua to Costa Rica; better conditions for migrants to enter the labor market; improved economic and psychosocial conditions of migrants and families; social integration of migrants; and financial services for migrants who send remittances.

21. Migration Management Programs: Costa Rica - Nicaragua • The project activities include: • Enhance the services of the Migration Office in Nicaragua to speed up the processing of documents and migration procedures • Develop and strengthen the means of exchanging information among pertinent authorities on migration matters in both countries • Strengthen the skills, knowledge and resources of Nicaraguan Consulates in Costa Rica to protect their nationals • Hold information and awareness campaigns in both countries aimed at employers, labor unions, migrant workers and the general public • Organize border services in Costa Rica to immediately check temporary workers upon their arrival and departure • Strengthen the skills, knowledge and resources of the Costa Rican Migration Directorate to document Nicaraguan migrants, as a means to guarantee their access to social services

22. Money transfers Tourism Transportation Nostalgic Trade Telecommunications 2. 5Ts of Transnational Economic Activities

23. Geographic Distribution of Remittances(as % of total flows received) • Nearly 90% of all remittance flows come from five regions of the world, 35% and 31% of which originate from North America and Western Europe respectively • Regional corridors show variations in the dependency on remittances i.e. Latin America - North America (primarily US) and Africa - Western Europe

24. Global Flow of Remittances • A conservative estimate of total global remittances is US $400 billion

25. Migrant Associations • In addition to remittances migrants also send financial donations to home countries which notably impact development • Hometown Associations (HTAs) or professional associations typically organize fundraisers or charity events to raise funds • HTAs are a migrant networks typically made up of individuals from the same town that come together with relatives back home to fund and administer small-scale development projects

26. Migrant Association Donations • HTAs primarily fund ongoing programs or come together during times of crisis i.e. a natural disaster • Individual donations typically amount to between $100 and $200 a year per person • In Mexico average donations from migrant associations total over US $150 million; • Ghanaians in the Netherlands may donate up to US$2 million; • In small towns these funds can total up to 7 times the municipal budget for public works

27. Consumption of Goods and Services • Immigrant consumption patterns are a means to maintaining ties with home countries (*Remember the 5 Ts!) • Immigrants budget to purchase nostalgic trade goods, some spending up to US $1,000 per year on these goods alone • Nostalgic goods consumption also drives trade between home and host countries • 10% of Salvadoran exports to the US are nostalgic goods (US $405 million) • Travel and telecommunications industries rely heavily on their migrant client base

28. Migrant Investment • Many migrants participate in capital investment and asset-building activities from abroad; • Capital investments are commonly made in the real estate or small business sectors; • Asset-building activities include investing in a small business (as an owner), taking out home or student loans or healthcare spending; • One in 20 immigrants invest yearly US$7,000 • Remittance recipients follow similar investment patterns

29. Skills Transfer Realities and Opportunities • Skill transfer is the process by which migrant workers bring home the knowledge and skills they acquired while working abroad • These transfers can significantly impact development especially when these skills relate to technology or business • Diasporas want to transfer their knowledge (as well as materials) to the development of their homelands • In general diaspora efforts have not been substantial, but well designed policies can change this

30. 3. Transnationalism, diasporas and development • Ties between the homeland and diaspora communities are kept alive through “distant proximities,” which are real-life experiences that both integrate and fragment relationships outside and inside borders • Immigrant laborers’ lives illustrate this concept well: • They integrate their home and host countries into the global economy as they seek to keep their families together, yet their lives are fragmented by the experience of distance and separation from their families and nations

31. Transnationalism • The end result of creating “distant proximities” is a transnational lifestyle • Transnational lifestyles are characterized by both opportunities and hardships that feature the paradox of distance and closeness and define people as members of a diaspora • Members of a diaspora community seek to belong to a community as a way to validate an identity, and their actions show this desire; • The emotional and symbolic practices translate into material circumstances with implications on development

32. Diasporas • Definition of diaspora: Sociopolitical formation[s], created as a result of either voluntary or forced migration, whose members regard themselves as of the same ethno-national origin and who permanently reside as minorities in one or several host countries • Members of such entities maintain regular or occasional contacts with what they regard as their homeland and with individuals and groups of the same background residing in other host countries

33. Diasporas • Diasporas define themselves through relationships with the homeland, international entities, and host-country governments and societies, thereby influencing various dynamics, including development • Diasporas form, in part, as a response to changes in the composition of the international system, as well as development or underdevelopment • The fact that people leave their homelands due to development conditions, yet continue to engage with the homeland on varies levels expands the concept of development beyond national boundaries

34. Diaspora Context • Diaspora and development links occur along various dimensions that correspond to specific economic activities • The impact of diasporas on development has limits and cannot be seen as the single solution to all problems of economic progress • However, diaporas must be included in the development dialogue

35. Diasporas and Development • The dimensions of diasporas’ links to development • Development in the diaspora • Development through the diaspora • Development by the diaspora

36. Development • Varying immigrant communities relationships with home countries demand strategies that have a direct impact on issues relating to: • reducing remittance transaction costs; • leveraging the capital potential of remittances through banking and financing; • promoting tourism, nostalgic trade, and investment; • establishing a state policy that attends to a country’s diaspora.

37. Development

38. Migration and Development: Policy Considerations about the economic activities of migrants… Money transfers Tourism Transportation Nostalgic Trade Telecommunications

39. 4. POLICY CONSIDERATIONS i) Reduce informality, improve competition and reduce costs ii) Accelerate financial intermediation projects with credit unions and MFIs iii) Engage banking institutions to provide broad financial services iv) Support projects to improve investment opportunities at home and among the diaspora v) Design products that include education and health services vi) Provide technical assistance on financial and remittance literacy vii) Engage governments and the private sector as environment-enablers viii) Macroeconomic policy ix) Migrant outreach policies x) Knowledge transfer: Toward a knowledge transfer bank initiative xi) Leverage nostalgia through enhanced and improved foreign trade xi) Diaspora associations and development cooperation options xii) Improve the quality of data to better target policy actions on remittances

40. Policy Considerations: Remittance Marketplace • Policies must focus on improving competition, reducing costs and informality, and providing incentives for new technology. • Regulations : • Exclusivity agreements • Regulations on who can pay money transfers • Rules on transparency, pricing, and disclosure • Policy Incentives: • Providing alternative means to transfer money • Incentives to access new technologies

41. Policy Considerations: Financial Intermediation • Accelerate financial access by promoting alternative financial institutions • Microfinance institutions (MFIs), credit unions, small banks play a key role in banking the traditionally unbanked • Increase support and participation of MFIs and credit union in remittance market • Financial product design and marketing • IT development • Market research • Regulatory compliance • Support MFIs and credit unions to build networks to improve negotiating power with remittance transfer companies.

42. Policy Considerations: Financial Literacy and Services • Financial/remittance literacy should be established by Central Banks and financial institutions to reach remittance recipients • Training on skills acquisition • Education on the value of checking, savings accounts; using remittances as a means to build credit, assets • Engage major financial institutions to broaden financial services available • Targeted financial product design and marketing are critical • Integrate education and health components into products

43. Policy Considerations: Investment Opportunities • Improve opportunities for migrants to invest in their home countries • Investments contribute to local economy, tourism, nostalgic good consumption • Investment opportunities should be linked to remittance recipients in microenterprise, real estate, commercial farming, etc. • Governments and private sector must encourage a favorable investment environment for migrants • Ex. National Commissions on Remittances and Development bringing together government, civil society orgs, migrant-based groups, MTOs, and financial institutions.

44. Policy Considerations: Diaspora Engagement • Governments need to do better in engaging diasporas to Confidence building • Create dialogue with diaspora leaders to empower migrant realities • Provide institutional resource investment for policy outreach to stress commitment • Establish institutional communication mechanisms that ensure systematic, legitimate contact • Offer technical assistance on small business financing • Develop a joint policy agenda on issues of common concern • Help hometown associations define their goals and operationalize their strategies.

45. Policy Considerations: Knowledge Transfer

46. 5. LESSONS LEARNED: EXAMPLES OF BEST PRACTICES

47. Lessons Learned: Remittance Marketplace • Several new approaches capitalize on new technology and targeted services to improve competition: • Using text messages for money transfers • Ex. GCash, Phillipines • “Productizing” remittances through diaspora • Ex. Thamel International, Nepal • Improving transfer speed, convenience of locations • Ex. Wells Fargo sweep account transfers and ATM-remittance accounts • “Bancarizing” small businesses and recipients • Ex. Jamaica National Building Society, Jamaica • Central Bank partnerships to reduce transfer costs • Ex. Directo a Mexico, U.S.-Mexico

48. Lessons Learned:Financial Intermediation • Integrating MFIs, credit unions to access remote areas, unbanked • Ex. Microfinance International Corporation • Ex. Bansefi’s L@ Red de la Gente and Beneficiary Account Registration (BAR) System, Mexico

49. Lessons Learned:Financial Literacy • Financial literacy educators in financial institutions • Ex. “Senoras de Bienvenida,” Banco Salvadoreno, El Salvador • Ex. ILO and International Organization for Migration, Moldova shown to increase knowledge and open bank accounts • Offering NGO guides without product marketing • Wells Fargo - U.S.-Mexico/Philippines • Women’s empowerment • Adopem’s Savings and Credit Bank, Dominican Republic

50. Lessons Learned:Investments • Strengthen migrants’ entrepreneurial skills • ASIIM Migrant Microenterprise Support, Italy • IntEnt, The Netherlands • Utilizing migrants to develop home countries • ERCOF – Philippines • Financing migrant construction in home country • Construmex, Mexico • Organize diaspora to invest in stocks at home • New Horizon Investment Club, Honduras • Knowledge sharing • Afford’s SEEDA Program, UK-Sierra Leone/Ghana