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The International Remittances Agenda Dilip Ratha Development Prospects Group World Bank Migration and Development Conference World Bank, Washington May 24, 2007. Main messages. Remittances are the most tangible and least controversial link between migration and development

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Main messages

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  1. The International Remittances AgendaDilip RathaDevelopment Prospects GroupWorld BankMigration and Development ConferenceWorld Bank, WashingtonMay 24, 2007

  2. Main messages • Remittances are the most tangible and least controversial link between migration and development • Reducing remittance costs would benefit all retail payments • Remittances can be leveraged for financial access of households, and capital market access of financial intermediaries • There is urgent need for clarification of AML/CFT regulations

  3. Remittances are large, have continued to increase

  4. Remittances are large, have continued to increase FDI Private debt and portfolio equity Recorded Remittances ODA

  5. Global flows of remittances (US$ billion)

  6. Remittances flows outside LAC continue to grow Year-on-year growth (%) Philippines* Bangladesh Mexico Note: Year-on-year growth rate (%) of 3-month moving average * from Middle East

  7. Intra-year seasonality: Monthly remittances to Mexico peak in May Monthly remittances, $ billion Mother’s day 2006 2007 2005 2004 Source: Banxico

  8. Policy implications • Remittances are private flows • Fiscal incentives may create distortions • Not a substitute for official aid

  9. Policy implications • Reduce remittance costs • Prudential banking regulations and AML/CFT regulations may need rebalancing • Leverage for financial access of households • Leverage for capital market access of intermediaries

  10. Policy implications • Reduce remittance costs • Prudential banking regulations and AML/CFT regulations may need rebalancing • Leverage for financial access of households • Leverage for capital market access of intermediaries

  11. Remittance fees are falling, but not fast enough Source: Condusef, Mexico

  12. South-South remittance costs tend to be higher than North-South costs

  13. Policy implications • Reduce remittance costs • Prudential banking regulations and AML/CFT regulations may need rebalancing • Leverage for financial access of households • Leverage for capital market access of intermediaries

  14. Latest data available at www.worldbank.org/prospects/migrationandremittances

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