Saskia Sassen Columbia University Presented in Delhi, June 18, 2008

1. Aspects of globalization:Remittances in Development.Democratic deficits inside the “liberal” state. Saskia Sassen Columbia University Presented in Delhi, June 18, 2008

2. Immigrant Remittances in Development

3. Worldwide Immigration • 1975: 85 million international immigrants in the world, or 2.1% or world population • 2000: 175 million or 2.9% • 2005 est.: between 185-192 million • Adding unauthorized/undocumented is estimated to add up to a third of totals. Source: World Bank 2006; 2007

4. Most international migrations are South to South • About 30 countries account for over 75% of all immigration - 11 of these are developed countries, with over 40% of all immigrants. - most immigrants are in developing countries

5. Immigrant remittances • US$ 70 billion in 1998 • US$ 230 billion in 2005 - of this total amount, $US168 billion went to developing countries, up 73% over 2001. For Latin America and the Caribbean in 2003 remittances exceed the combined flows of all foreign direct investment and net official development assistance (IADB 2006)

6. Immigrant remittances 2007 • Worldwide remittances rose 7% in 2007 to US$ 318 billion. • US$ 240 billion of the total went to developing countries. • Highest receivers: India 27 billion, China 25.7 b., Mexico 25 b., Philippines 17 b., France 12.5 b.

7. Items that tell larger stories • Bangladeshi remittances went up 38%, to US$ 700 million, mostly coming from the UK • Immigrants in Spain sent 13 billion, mostly to Latin America, esp. Ecuador and Colombia. • Wall Street firms made 2bn in 2004 processing the 38bn sent from the US to Latin American countries (Inter-American Development Bank 2006)

8. Weight of Remittances %GDP • 0.2% in high-income OECD countries • 1.7% in middle-income developing countries • 3.7% for low-income developing countries Remittances are over a fourth of GDP in several poor or struggling countries: Tonga (31.1%), Moldova (27.1%), Lesotho (25.8%), Haiti (24.8%, Bosnia and Herzegovina (22.5%) and Jordan ( 20.5%).

9. Global professionals also send remittances • The top 10 remittance recipient countries in 2004 include rich countries such as France, Spain, Germany and the UK.

10. Do remittances reduce poverty? • A recent study of data covering 74 low and middle-income countries shows a positive correlation between remittances and poverty alleviation (IOM 2006). • A 10% increase in the share of remittances in a country’s GDP leads to: - a 1.2 per cent decrease in the percentage of persons living on less than USD 1 a day - and also reduces the depth or severity of poverty

11. Trafficking for the sex industry • Latest estimates: profits for organized syndicates (excludes small operators and self-organized moves): • 2006: US$ 19 bn (Interpol) US$ 27 bn (ILO) • 7 bn in 2000 (UN)

12. Democratic deficits inside the “liberal” state.. .

13. Our growing democratic deficit • Beyond party politics • Beyond the state of exception (national security, War on Terror, state of exception) The development of a global corporate economy has further strengthened the executive branch and weakened the legislature. Process begins in 1980s,

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15. Executive branch: alignment with global logics • 1) Certain parts of the administration (the Treasury, the Federal Reserve, the office of the Trade Representative, and so on, and the equivalent institutions in other countries) have played a critical role in building a global corporate economy. They have become stronger over the last two decades because of globalization.

16. Sources of executive gains and legislative losses of power • Deregulation and privatization weaken legislatures—remove various oversight functions. • The major global regulators, notably the IMF and WTO, as well as many lesser known ones, only negotiate with the executive branch. As the global corporate economy and the supranational system expands, executive power grows.

17. Legislative losses/Executive gains • Marketizing and privatizing of public functions: examples from the US: privatizing of prisons and outsourcing of welfare functions to private providers; outsourcing of soldiering to private contractors even in war zones (Iraq). - reduces the oversight role of legislative branch - but adds to the role of the executive as it sets up specialized commissions

18. An example from the US • Subcontracting military work to private firms: - The executive branch can actually handle private contractors with little if any oversight by Congress - Executive has not informed Congress about the amount of taxpayers’ money going to private contractors who now handle a growing range of military activities ( food provision to soldiers, cleaning, mercenary soldiers).

19. A proliferation of inter-governmental networks • Inter-governmental networks centered largely in the executive branch have grown well beyond matters of global security and criminality. The participation by the state in the implementation of a global economic system has led to new types of cross-border collaborations among specialized government agencies focused on the globalization of capital markets, international standards, the new trade order,etc

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