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January 2012, Volume 19, Number 1

Global: Diasporas, Remittances

Diasporas. The Economist praised "the magic of Diasporas" November 19, 2011, asserting that migration is beneficial to migrants as well as sending and receiving countries. Migrants may be quicker to spot opportunities at home and abroad, fostering trade, investment and other links between countries.

The Economist concluded that, even though the net economic benefits of migration to richer receiving countries are very small, rich countries should open doors to migrants from poorer countries because migration maintains the size of their labor forces and spurs innovation. Developing countries, it asserts, will not suffer from out-migration unless more than 20 percent of university graduates leave.

The Economist credited Diasporas with speeding the flow of reliable information over borders, as when a Chinese migrant in Africa spots a business opportunity and persuades friends and relatives in China to provide supplies to satisfy the demand with a phone call. The Economist argues that trust within Diaspora communities, and between members of the Diaspora and their partners in their countries of origin, allows business to be done with handshakes and phone calls rather than formal contracts.

Circular migration emphasizes training workers for foreign jobs before departure and helping them to find jobs or become entrepreneurs on return. Proponents say circular migration offers triple wins: migrants earn higher wages, receiving countries get temporary workers but not settlers, and sending countries reduce unemployment, obtain remittances and add human capital in the form of migrants trained abroad.

Critics say circular migration is simply another name for guest worker programs that failed to prevent worker abuse and settlement in the past. The emphasis on circulation, they argue, helps sending and receiving governments to justify cooperation to ensure that migrants return at the end of contracts.

Remittances. The World Bank in December 2011 estimated that remittances to developing countries would top $350 billion in 2011. India is projected to receive $58 billion in remittances; China, $57 billion; Mexico $24 billion; and the Philippines, $23 billion. These four countries accounted for almost half of remittances to developing countries. (

Remittances to developing countries were $325 billion in 2010, and are expected to continue increasing by five to 10 percent a year. Pakistan and Bangladesh each received about $12 billion in remittances in 2011.

The US provides most of the remittances to Latin America, Gulf oil exporters are the source of most remittances going to South and Southeast Asia, and Russia provides most of the remittances to Eastern Europe. Remittances in Mexico and other Latin American countries have returned to 2007 levels, but have not increased as in many Asian countries. Oil prices approaching $100 a barrel support high levels of remittances from Gulf countries and Russia.

The G20 nations in 2009 agreed to reduce remittance costs from 10 percent of the amount transferred to five percent within five years, the so-called 5x5 pledge. The average cost of sending $200 to $500 over national borders has been falling, from almost nine percent of the amount transferred to seven percent between 2008 and 2011. The sharpest reductions in remittance costs were in the highest-volume markets, such as US to Mexico; UK to India and Bangladesh; and France to North Africa. Some of the highest remittance costs, up to half of the amount transferred, are between African countries, such as from South Africa to Zambia and Mozambique.

IOM-WMR. The International Organization for Migration's World Migration Report for 2011 reviewed polling results in the industrial countries receiving migrants, emphasizing that residents often overestimate the number of migrants.

Migrants are an average 10 percent of the residents of industrial countries. US respondents estimated migrants were almost 40 percent of residents instead of the actual 13 percent, while Italian respondents estimated 25 percent instead of the actual seven percent. In Australia, New Zealand and Switzerland, over 20 percent of residents were migrants.

The 21st anniversary of the approval of the UN International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families was celebrated December 18, 2011. ( By the end of 2011, 45 countries, all primarily migrant-sending countries, had ratified the 1990 UN Convention.