dilip ratha the world bank - united nationsdilip ratha the world bank new york, november 13, 2014...
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Dilip RathaThe World Bank
New York, November 13, 2014
Session 1: Exploring nexus between financial sector development, inclusion & stabilitySubstantive Informal Session on Private FinancePreparatory Process for the Third International Conference on Financing for Development
Remittances and Development
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Diaspora Financial Resources for Development
Remittances
Diaspora saving
Diaspora giving
Securitization of remittances
Contribution to sovereign credit rating
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Remittances
$413 Billion Remittances
$135 Billion Aid
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Remittances to developing countries are large ($435 billion in 2014), and more stable
Source: Development Prospects Group, World Bank
-100
0
100
200
300
400
500
600
700
800
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014f 2016f
FDI
Remittances
Private debt & equity
ODA
$ billion
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Excluding China, remittances to developing countries are larger than FDI
Source: Development Prospects Group, World Bank
0
50
100
150
200
250
300
350
400
450
500
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014f 2016f
FDI$ billion
Remittances
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Remittances
42% of GDPTajikistan
35% of GDPSomalia
$18 bnEgypt
$72 bnIndia
$ billion % of GDP
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31%
NepalPoverty rate
42%
1995 2005
Aid that works!
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Exorbitant remittances costs
8% 12% 90%Global average Africa Venezuela
20%Within Africa
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Reduce remittance cost
1. Relax regulations for small remittances
2. Abolish exclusive partnership with post office
3. Create a non-profit remittance platform
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8% (Global average)
$30 Billionannual savings
1%
Reduce remittance cost
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Harness the power of diaspora saving and diaspora giving
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• Size, corridors, channels• Counter-cyclicality • Effects on poverty, education, health, investment• Policy (costs, competition, exchange controls)
1. Monitoring, analysis, projection
• Payment platforms/instruments• Clearing/settlement, capital adequacy, disclosure, cross-border
arbitration• Anti-money laundering (AML/CFT)
2. Retail payment system
• Deposit and saving products• Mortgage, consumer loans, microfinance• Credit history for MFI clients• Insurance products
3. Financial access for households, SMEs
• Sovereign credit rating• Bonds backed by future remittances as collateral• Diaspora bonds
4. Capital market access for countries,
companies
Global Remittances Agenda
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Thank you.
www.worldbank.org/migration
www.knomad.org