World Bank knowledge hub to address migration and remittance

The World Bank has announced the establishment of the Global Knowledge Partnership on Migration and Development (KNOMAD), envisioned to become a global hub of knowledge and policy expertise on migration issues.

KNOMAD was initiated in response to the rapid growth in migration and remittances over the last decade. Nearly one billion people – that is, one out of every seven persons on the planet – have migrated internally and across international borders in search of better opportunities and living conditions, with profound implications for development.

Remittance flows to developing countries have more than quadrupled since 2000. Global remittances, including those to high-income countries, are estimated to have reached $514 billion in 2012, compared to $132 billion in 2000.

"Migration and remittances offer a vital lifeline for millions of people and can play a major role in an economy's take-off. They enable people to partake in the global labor market and create resources that can be leveraged for development and growth. But they are also a source of political contention, and for that very reason deserving of dispassionate analysis,” said Kaushik Basu, the World Bank’s Chief Economist and Senior Vice President for Development Economics, as he participated in an event to mark the launch of KNOMAD. “The World Bank has played a critical role in migration and remittance research and KNOMAD will be critical in taking this agenda forward."

Established with the support of Switzerland and Germany, KNOMAD aims to generate and synthesize knowledge on migration issues for countries; generate a menu of policy choices based on multidisciplinary knowledge and evidence; and provide technical assistance and capacity building to sending and receiving countries for the implementation of pilot projects, evaluation of migration policies, and data collection.

The program will  focus on a number of key thematic areas: improving data on migration and remittance flows; skilled and low-skilled labor migration; integration issues in host communities; policy and institutional coherence; migration, security and development; migrant rights and social aspects of migration; demographic changes and migration; remittances, including access to finance and capital markets; mobilizing diaspora resources; environmental change and migration; and internal migration and urbanization. It will also address several cross-cutting themes, such as gender, monitoring and evaluation, capacity building, and public perceptions and communication.

Drawing on global expertise, KNOMAD’s outputs will be widely disseminated and will be available as global public goods.

According to the latest edition of the World Bank’s Migration and Development Brief, officially recorded remittance flows to developing countries grew by 5.3% to reach an estimated USD401 billion in 2012. Remittances to developing countries are expected to grow by an annual average of 8.8% for the next three years and are forecast to reach USD515 billion in 2015.

Given that many migrants send money and goods through people or informal channels, the true size of remittances are much larger than these official figures.

The top recipients of officially recorded remittances for 2012 are India (USD69 billion), China (USD60 billion), the Philippines (USD24 billion), Mexico (USD23 billion) and Nigeria and Egypt (USD21 billion each). Other large recipients include Pakistan, Bangladesh, Vietnam, and Lebanon.

 “The role of remittances in helping lift people out of poverty has always been known, but there is also abundant evidence that migration and remittances are helping countries achieve progress towards other Millennium Development Goals (MDGs), such as access to education, safe water, sanitation and healthcare,” said Hans Timmer, Director of the Bank’s Development Prospects Group.

However, the high cost of sending money through official channels is an obstacle to the utilization of remittances for development purposes, as people seek out informal channels as their preferred means for sending money home. The global average cost for sending remittances was 9% in the first quarter of 2013, broadly unchanged from 2012.

 “Migration is a defining issue for global development,” said Dilip Ratha, Manager of the World Bank’s Migration and Remittances Unit and head of KNOMAD. “This underscores the need for an initiative such as KNOMAD, which will generate evidence-based research to facilitate constructive debate and discussion on migration issues with the aim of developing practical policy options for sending and receiving countries.”

Remittance flows to Sub-Saharan Africa have been recovering from the contraction associated with the global financial crisis, but growth has been modest. In 2012, the region is estimated to have received about $31 billion in remittances, only about a 1% increase over 2011. Nigeria is by far the largest recipient of remittances in the region, accounting for about 67% of the inflows to the region in 2012, followed by Senegal and Kenya. Zero growth in flows to Nigeria in 2012 is partly attributable to the feeble labor market recovery of its major remittance source countries in Europe, the UK in particular. Remittance flows to Nigeria and the rest of the region are expected to grow significantly in the coming years to reach about USD39 billion in 2015.

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