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The Migration-Development Nexus Analysis on the remittances of migrants in
Europe
Written By Giuliana Scalia
January 2016
Report No
01
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Updated at 13th January
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Summary
The Migration-Development Nexus ...................................... 4
Introduction .............................................................................4
What do we mean by migrants' remittances? .....................6
Economic Remittances ............................................................9
Collective Remittances .........................................................12
Social Remittances .................................................................17
Why should the EU spend money and efforts towards
economic migrants? ..............................................................24
Conclusions and Recommendations ..................................31
References ............................................................................... 41
About the Authors ................................................................. 44
The Migration-Development Nexus
4
The Migration-Development Nexus
Giuliana Scalia
Introduction
Although the migration crisis has attracted all the attention on those
migrants escaping from wars, discrimination, and conflicts, another
category deserves major interest from policy makers. We refer to the
category of those leaving their country for economic reasons, looking
for better living conditions in a host country, the so called 'economic
migrants'.
In the past years there has been a relevantly growing rising interest
for the issue of migration and its relation to development in sending
countries. Scholars and policy makers have thus widened their
researches and have spread a more optimistic view on the matter. This
interest has mainly been based on a striking increase of remittances
flows1. As a consequence, these last years have seen a stronger belief
that remittances are effective means for income redistribution, poverty
reduction and economic growth in the country of origin.
There is ample evidence that both high skilled and low skilled
workers can generate numerous positive economic spillovers for
1 Remittances sent back to the country of origin have arisen from $31.1 billion in 1990 to
$76.8 billion in 2000 to $167 billion in 2005 (Hein De Haas, “Migration and Development:
a Theoretical Perspective”, COMCAD Arbeitspapiere- Working Papers No. 29, (2007):
7. bit.ly/1ldjeAu).
January 2016
5
receiving and sending countries. But how can migrants maximize the
development of both sides? Some important measure should be applied
to both in order to turn the diaspora into that source of capital, trade,
investment, knowledge and technology transfer that can be.
However, these years the EU has been dealing with a harsh economic
crisis affecting the wellbeing of some of its Member States, as well as a
migration crisis in the Mediterranean that has led to thousands of deaths
and consequent problems within the Union. Not to consider the
growing terrorist threat, which is heavily influencing the latest policies
on migration and security. As a consequence, it is become more and
more widespread the idea that migration is a security issue. And that the
main measure to 'fight' this phenomenon is putting barriers to migrants
at our borders.
But illegal migration is only one face of the coin of the whole
migration phenomenon, and although it is extremely important to deal
with it, the EU has never really considered the importance that
economic migrants can have for developing and developed countries.
Thus, why is it so important for the EU to deal with economic migrants?
What are the measures that should be implemented to maximize
migrants' remittances?
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6
What do we mean by migrants' remittances?
Before examining into detail the literature about migration
remittances, we will provide some definitions on the main actors of this
process.
First of all, we should acknowledge who is at the basis of this process.
Migrants are fundamental actors in this, but little is known on what kind
of migrants use to remit more than others. In this respect, in this report
we will mainly refer to
economic migrants or to migrants'
diaspora. Each of these two
definitions expresses a
different aspect on
remittances, yet none
excludes the other. We will
explain why in the following
paragraphs.
Economic migrants are those migrants leaving their country of origin
for economic reasons, such as unemployment, lack of job
opportunities, low wages, financial problems, and reach a host country
for achieving a better standard of living and a higher financial income.
In reality, an official definition of economic migrants does not exist. In
fact, in recent times this definition has been often used to distinguish
asylum seekers from the rest of migrants landed to our shores.
However, the two categories cannot exclude each other. In fact, asylum
seekers can also be economic migrants when they do not only look for
Source: The Economist
January 2016
7
human rights and liberties, but also for better economic standards of
living.2
We consider of extreme importance to define the diaspora
community, a concept that has been misused and misunderstood many
times. Several definitions have been given to diaspora communities3.
Migrants have been referred as “nationals abroad”, “permanent
immigrants”, “expatriates”, etc.
Etymologically, the term “diaspora” comes from the Greek words
“to sow” and “over” and originally referred to the ‘seeding’ of Greek
colonies in distant lands4. Later on, the term was associated with forced
expulsion and dispersal of a community and the implied desire to return
to the home country. Today, it is very often mentioned in relation to
the scattered, people force to abandon their homelands and it often
associated to the Jewish community. However, in this regard, we use
the term diaspora to define a settled community of migrants in a
destination country whose importance lies in their being transnational,
living in one place but still maintaining strong relations with their
2 For instance, even if not appointed in the Convention of Geneva, those people escaping
from a natural disaster should be also considered refugees. Thus, in this case they are not
'political' migrants but again economic migrants that left their country for a safer place to
live and for increasing their economic and social conditions in a new country. 3 An example is: “members of ethnic and national communities, who have left, but
maintain links with their homelands” (Dina Ionescu, “Engaging Diasporas as
Development Partners for Home and Destination Countries: Challenges for
Policymakers,” (Geneva: IOM, 2006): 13. bit.ly/1Q2kdP6) 4 Kathleen Newland, “Beyond Remittances: The Role of Diasporas in Poverty Reduction
in Their Countries of Origin,” Scoping Study for the Department for International
Development, United Kingdom, 2004. bit.ly/1UTT8Pj.
The Migration-Development Nexus
8
homelands. Thus, the definition that is the most envisioned in this
paper is: “International migrants who, although dispersed from their
homelands, remain in some way part of their community of origin”5.
This definition refers to a community of dispersed people across several
countries that still maintains an affiliation to their home country.
The diaspora concept gathers together different issues and questions
of regarding time, place of birth, citizenship and identity/belonging.
First of all, it is difficult to clearly define when a migrant turns to be a
part of a diaspora. Given the transnational character of today’s society,
people can work abroad and then decide to return, or they can decide
to move permanently to another country. Secondly, does this definition
of “diaspora” include second- and third-generation migrants? Again, it
is difficult to limit the concept to the first-generation migrants because
there are many second and third-generation migrants born in the
destination country that have a strong feeling of belonging to the
country of origin of their parents. The same is valid for citizenship:
many migrants acquiring citizenship in the receiving country cannot be
excluded to the diaspora category because their sentiments of identity
still remain strong.
Since the main ‘migration actors’ have been analyzed, we can now
focus our attention on the part of development processes.
Development can be defined as sustainable economic growth, poverty
reduction but also as social advancement, human empowerment and
5 House of Commons International Development Committee (HCIDC), Migration and
Development: How to make Migration Work for Poverty Reduction, Sixth Report of
Session 2003-4, Vol.1, United Kingdom: House of Commons (2004).
January 2016
9
socio-economic equity6. Of course, the development depends and
changes from country to country. So that first of all, policymakers
should understand what are the main development needs and gaps and
how the potential diaspora can contribute to them. Moreover, when
dealing with diaspora and their developmental ‘power’ we should
consider both the country of origin and that of destination. We can now
go back to the main question: what do we mean for remittances and
how are they classified?
In most of the studies made in the past years, remittances related
mainly to the economic benefit the host and home country can receive
from migrants. To put it simply, they are the financial returns migrants
are able to send back to their country of origin and at the same time the
country in which they have settled down. However, many scholars have
also identified social and political advantages that migrants can lead to
in the two countries involved: for instance, migrants can contribute
positively to the spread of democratic sentiments in their countries, or
they can push their government of their countries to adopt the respect
of human rights, etc. In this regard, types of remittances will be
described more in deep as follow.
Economic Remittances
From the World Bank website: “Personal remittances are the sum of
personal transfers and compensation of employees. Personal transfers
6 Ionescu, 21.
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10
represent a broader definition of worker remittances. Personal transfers
include all current transfers in cash or in kind between resident and non-
resident individuals, independent of the source of income of the sender
(and regardless of whether the sender receives income from labour,
entrepreneurial or property income, social benefits, and any other types
of transfers; or disposes assets) and the relationship between the
households (regardless of whether they are related or unrelated
individuals)”7. As it can be noticed, when dealing with remittances in
general, they are regarded as to be automatically economic.
In fact, from an economic point of view many are the investments
and business transactions that a migrant can overtake towards the home
country. Most of the debate on economic remittances has focused on
the usefulness of these investments. In fact, the common reason for
scepticism on migration and development has been the assumption that
migrants rarely invest in productive enterprises but most of the time in
consumption or non-productive investments.
In some ways, the short-term effects of migration on livelihoods and
migrants’ household is negative in terms of the lost-labour effect8 But
as time goes by and migrants have settled down in a destination country
and found secure employment, the most basic needs of the household
such as food, health and education will be fulfilled and there will be
more possibilities for investments. It is only later that migrants invest
7 World Bank website, “How do you define remittances”, Section Data. bit.ly/1nnHRMB 8 De Haas, H., “Migration and Development: a Theoretical Perspective”, COMCAD
Arbeitspapiere- Working Papers, no. 29, 2007.
January 2016
11
in ‘profitable’ enterprises (agriculture, housing, commerce). However,
this is not a rule and investments change according to the will of
migrants and other investments variables. In fact, the extent to which
remittances grow depends on the migrant social and economic position
in the receiving country as well as the investment conditions in the
homeland. Thus, according to these different variables, migrants can
remit back investing in land or in agriculture improvements or in
housing.
That being said, we should better the terms “productive
investments”, too. As we mentioned, not all investments in the
economy of the country of origin are productive for development. The
money remitted on education, health, food, medicines, and housing do
enhance the household well-being and as a consequence their
livelihoods, but cannot be considered “productive investments”. Land,
real estate are speculative investments and are a spontaneous response
to the uncertainty of the political and economic environments of the
home country. Hence, the small-scale production activities are more
within reach of the migrants’ families.
We have seen how migrants can direct their funds to individuals (or
household) or toward investments, but we have not dealt with the
funding of organized groups of migrants such as home towns clubs or
associations. Thus, we can say that three kind of economic remittances
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12
can be distinguished: family/individual, collective and entrepreneurial9.
Since the main characteristics of remittances directed towards the family
and investments have been dealt before, in the next section the
attention is focused on the funding that the diaspora community can
spend on their community of origin.
Collective Remittances10
With collective remittances we refer to migrant groups’ or
individuals’ initiatives concerning the financing and launching projects
for their community of origin. These remittances are not used to cover
recurrent expenses and look more like non-profit donations than capital
investments. In fact, they are based on the idea of collective enjoyment
and not private gain.
The ties between the migrant community and their country of origin
can come in different forms, among which: strong family tie, the sharing
of geographical provenience, ethnic affinity, religion, profession, charity
sentiments, investments, political parties, culture.
Many different reasons and interests can lead to the creation of a
diaspora organization, network or association. It happens very often
9 This classification has been used first by Goldring in “Re-Thinking Remittances: Social
and Political Dimensions of Individual and Collective Remittances”, CERLAC Working
Paper Series, 2003. 10 Collective remittances can be also seen as social, political and economic remittances
because in most of the cases some money are invested in these organizations and in many
occasions these money are devoted to the social and political wellbeing of the left home
community.
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13
that these interests are linked with the reason of departure of the
migrants’ community and their affiliation to the country of origin. Some
examples of these organization, networks and organization will follow:
Business networks:
These kinds of groups are very common among Diaspora. Some
acts as well established Chambers of Commerce within one country
while others are transnational. Information technology is very often
the mean to create and maintain ties among participants. The African
Diaspora Summit is exemplar in this regard 11. It was created by an
Afro-Dutch Diaspora organization and the main goal is to combine
the business interests with conflict resolution and believes in the
positive contribution of African communities living in Western
countries to development cooperation and economic development.
The importance of these associations lies in the fact that diaspora
investors can be a push factor for market growth and reforms.
Moreover, investments in the country of origin can also attract non-
migrant international investors.
Home Town Associations:
These groups represent structures in which migrants enter into
active citizenship and transnational societies. They are useful means
in the preservation of identity and at the same time they build social
and physical infrastructures in the home towns. Thus, they provide
services and activities such as: charitable contributions,
11 Other examples: the Armenia High Tech Council of America, the Silicon Valley Indian
Professional Association, the GhanaExpo, the Interims for Development (based in the UK).
The Migration-Development Nexus
14
infrastructure improvements, funding for human development
project on health and education and capital investment in profitable
activities. In this category we find associations that support schools
or mosques, repair infrastructure, provide scholarship for students
or reconstruction activities after a natural disaster.
Migration and development associations:
One of the most remarkable merit of the diaspora community is
their potential role in building social capital. Migrants abroad can
affect attitudes towards human rights, women’s rights, education,
employment or the use of violence12. To put it simply with an
example, the African Foundation for Development (AFFORD), is a
London-based charity which main aim is to connect Africans and
their organizations abroad for the only purpose of development of
Africans and the African continent. In doing so they designed a
varied number of projects in order to promote development in
Africa through different means: workshops, seminars, exhibitions,
meetings with agencies, donors, NGOs, awareness-raising
campaign, etc. 13
Diaspora networks on supporting conflict:
Armed conflicts or public disorder are also at the centre of the
attention of many diaspora groups. It has been noticed that diaspora
12 Newland, K., “Beyond Remittances: the Role of Diaspora in Poverty Reduction in their
Countries of Origin”, Scoping study by the Migration Policy Institute for the Department of
International Development, 2004. 13 The development object is also at the basis of many other associations: the Association
Migration Solidarité et Echanges pour le Développement in France or the gender-based Femme set
développement en Algérie again in France (Ionescu, 2006).
January 2016
15
often provides support to the conflicts of the home country. They
give financial support, or provide arms, manpower or transports.
One of the reasons why this happens is the distorted vision of the
conflict from a foreign country. In fact, thousands of kilometres of
separation and a relatively safe environment allow migrants to have
an idealized notion of the conflict in their homeland that obscure
the reality of the facts. Many examples made proof of this. In India,
the Gujarati Diaspora group was fundamental in supporting and
funding the rise of Hindu nationalist violence against Muslims and
Christians14. Even more remarkable is the case of Sri Lanka and the
Liberation Tigers of Tamil Eelam. This group was largely funded by
the Sri Lanka diaspora abroad that not only contribute with financial
support, but also with financial fundraising and arms smuggling.
The reasons that convinced migrants from abroad to do so were not
only the strong belief in the Tamil cause, but also the fact that the
illegal migrants and asylum seekers saw in the Tamil Tigers a
guarantee in case they are forced to come back home. Even the
widespread concern for the relatives left back in the homeland
played a role. Thus, the fact that many migrants move to another
country because of conflicts does not mean that they will not fund
another conflict or violence in their origin country.
Diaspora networks on moderating conflict:
However, sometimes diaspora are active actors in the moderation
of conflict and try to react by disapproving a particular action or by
14 The Hindu newspaper, “Foreign direct investment in hatred”, 23th March 2003.
bit.ly/1SUE3OU.
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16
withholding aid to such actions. On the contrary of the
aforementioned case, migrants abroad can have a less passionate
and more objective perspective. For instance, the Irish Diaspora in
the United States played a role in convincing the IRA to accept the
Good Friday Agreement in Northern Ireland in 199815. Even the
anti-apartheid movement was an international network of South
Africans abroad that asked for international support. These
networks are not always driven by the civil society itself. Many cases
saw individual leaders (religious, ethnic, business, journalists, artist,
etc.) that fight to attract the attention of the population.
Philanthropy organizations:
Diaspora groups are very used to donate to charities and diaspora
organizations. These range from very small groups (or individuals)
donations to large and more organized community groups. The
Action for Children, for instance, is based in the UK and was founded
by Sierra Leoneans with the aim of helping child victims of the war.
Moreover, many of these charity projects are directed towards the
improvement of health, education or public works in the homeland.
This is the case of many wealthy Indians living abroad, for
instance16.
Scientific networks:
Of another kind, but worth mentioning, are the groups of scientific
diaspora that establish a relation between professionals through the
use of different channels, as the web or university links. Among
15 Newland, 2004. 16 Ibid.
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these groups we find: the Association des informaticiens vietnamiens de
France, the African Scientific Network or the Academia de Ciencias de
America Latina which main aim was and still is that of identifying
technicians and scientists in the region17.
All these groups, dealing with the different interests of a diaspora
community (from ending a conflict to business interests to importing
ideas), play a significant role in the country of origin. However, we
should take into consideration that not all these groups/organizations
enjoy the same power and consideration. Some are powerful and well
organized, some are significant just in one village while others at the
national level, some operate on a limited scale and some exist in name
only. Most importantly, not all these organizations consider the
reduction of poverty and development as priorities. However, these
groups are examples of how migrants in civil society can enter the
market, even with some state support.
Social Remittances
At this point we can focus on the category of social remittances, a
side often neglected. Economic benefits are not the only face of
migration and its nexus to development and culture should be
considered as a development enterprise. Migrants do not carry just
money from one country to another but also ideas, practices.
17 Ionescu, 2006.
The Migration-Development Nexus
18
As a consequence, one direction to study migration and its
connections with development has been to include elements that are
not strictly economic. Many scholars have focused on the social and
political advantages (or disadvantages) of migration in the sending
country. Peggy Levitt has defined social remittances as the diffusion of
different social practices, ideas, identities and social capital in the
country of origin after a migration process18. Nichols elaborated further
the concept defining these kinds of remittances as the knowledge, skills
and technology that comes to the country of origin together with the
returning migrants19. Again, Levitt and Lamba-Nieves talked about “a
migration of culture” and “migration as a cultural act”20. These practices
play a key role in the transnational collective formation, the social
impacts of migrants and their potential in the development of a
community. Many others have focused also on the political identities,
demands and practices that returning migrants can bring back to their
community. Thus, according to this view, migration is a multi-tasking,
multi-dimensional process that encompasses multiple arenas.
Social remittances have been usually classified according to three
categories: norms, practices and social capital.
18 Levitt, P. Social Remittances: “Migration Driven Local-Level Forms of Cultural
Diffusion”, International Migration Review, Vol. 32, No.4, (1998): 926-948. 19 Nichols, S. “Another Kind of Remittance: Transfer of Agriculture Innovations by
Migrants to their Communities of Origin”, Second Colloquium on International Migration. 2002. 20 Levitt, P. & D. Lamba-Nieves, “Social Remittances Revisited”, Journal of Ethnic and
Migration Studies, Vol. 37, no. 1, (2011): 2. They also asserted: “It is not when or that these
practises or identities may be cultural but rather that they are inherently cultural”.
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Normative structures of remittances:
Normative structures are ideas, values, beliefs that include also
interpersonal behaviour, intra-family responsibility, and principle of
community participation and aspirations of social mobility.
Moreover, they can, for instance, include the expectations toward
organizations and institutions (how the church, the state should
work). As we have already seen, the circulation of these moral
norms is not always positive: migrants can bring back to their home
country models that can look negative. Also, migrants' behaviour
changes upon return according to the status they have acquired in
the receiving country.
Practices:
Practices are the actions shaped by normative structures21. There
can be individual as well as organization practices. Individuals’ one
include, for instance, religious, civil and political practises while
within the organization we can find modes of socializations,
strategies, leadership and intra-organizational contacts.
Social capital:
The definition of social capital has been addressed by many scholars
and according to many different perspectives. From the social point
of view, social capital includes social networks and norms within a
21 Levitt, 1998.
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20
community which are implicit in the institutions and relationships22.
Social capital is fundamental for an efficient economy. The
combination of values, norms and practises along with interactions
between individuals and groups have given rise to a useful social
capital to development. Many researchers have underlined how
migrants have acquired a particular status in the country of
destination and have then brought it back to the country of origin.23
The effects of social remittances have risen from many empirical
researches. First of all, it has been proved that social relations affect
economic transfers. Migrants send money to the groups they are
interested in, as a kind of social insurance.24 Secondly, migrants can be
useful disseminator of information and influence when they come back
visiting or they settle back to their homeland. As a consequence, new
values enter the country of origin: these can be values on marriage and
fertility, on education or even values on gender and class stratification.
However, the influence is not always positive and some values can
worsen the social capital brought back.
Migrants can also remit new political values. This is why some
scholars have also mentioned the existence of political remittances.
22 Nassar, H., “Migration, Transfers and Development in Egypt”, Research Reports, European
University Institute, No. 1, 2005. 23 They have found this behavior in Vincentian and Grenadian immigrant leaders and
activists who used their prestige and new status they have acquired in the United States
to take advantage at home. 24 A study by Kurien (2008) have observed the flows of money in three different Indian
villages. The Muslim one tended to put their money in circles of community members;
the Hindi one preferred the life-cycle rituals; while the Christian village supported family
expenses (Levitt, P. & D. Lamba-Nieves, 2011).
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Some have seen in migrants the main actors in generating changing
balance of power among different groups, new policy initiatives and
also strengthening or weakening political institutions. It should be
mentioned that this happens through social channels and the influence
of specific cultural orientations and social norms. Again, this process is
not always positive for development. New aspirations among the young
community can lead them to invest less in local institutions and more
in consumption items or can also increase their religious identities and
violence.
All the characteristics seen in the past pages can give us a relevant
overview over the benefit migration can have for home countries. We
have seen that these benefits can in some ways lead to not only an
economic but also to a social and political development in countries of
origin of migrants. But, what about destination countries? What are the
benefits for host countries?
Many researchers have underlined the positive impact that
immigration can have on developed countries. In particular, many
scholars have made evidence of how immigrants affect positively the
economies of destination countries.
Host countries tend to improve their economic and social
development with immigration flows because:
migrants tend to increase the workforce;
migrants are able to fill the holes in both fast growing and
declining sectors of the economy;
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22
they contribute to labour-market flexibility;
they contribute in taxes and social contributions;
with their skills, they contribute to human capital development
and to technological progress;
they can contribute and facilitate transnational cooperation25
promoting co-development strategies.
Thus, immigrants can have a positive role on the economy and can
contribute to its development. They are involved in growing
occupations such as health-care, and occupations related to science,
technology, engineering, and mathematics. But, at the same time, they
occupy the most strongly declining occupations that native-born do not
want to undertake (for instance, the craft and trade sectors, manual jobs,
etc.). What for the native seems unattractive or worthless, the migrant
in need will fill that position contributing also to the improvement of
declining sectors26 .
Moreover, the myth of immigrants benefitting from state
contributions more than the natives should be eradicated. In fact,
migrants contribute more in taxes and social contributions than the
benefits they individually receive27.
25 Many times, host countries decided to involve diaspora groups for development plans
and policies (Ionescu, 2006). 26 OECD (2014), “Is Migration Good for the Economy?”, Migration Policy Debates,
2014. 27 Ibid.
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Employment-related, immigrants can introduce relevant fiscal entries
in many OECD countries in which migration reaches high levels. After
all, most of them emigrate to find a new job and improve their life and
that of their family. Directly or indirectly, migrants tend always to
improve the economic performance of one country.
Their impact is also demographic. They do not only increase the size
of population, but they reduce the dependency ratio. In fact, the
majority of them are young aged and with the willingness of working,
they will reduce the generational turnover in all countries and increase
the number of the active population. Their being young and educated
means importing to a new country new skills and capabilities and
enriching the human capital of that country. This contributes to boost
research and innovation.
In conclusion to this first section, we can say that migrants can have
relevant roles in the developmental process of both the country of
Source: BBC News
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24
origin and destination. If in the host country these positive effects relate
mainly to the economic and financial sphere, the home country can
benefit both economically and socially from its citizens abroad.
Why should the EU spend money and efforts towards
economic migrants?
We all know that the European Union lately has been struggling on
the topic of migration. The continuous flows and the numerous deaths
in the Mediterranean have put to test the fragility of the Union that had
to face different aspects related to immigration: the refugee status,
irregular migration, the state of terror of Daesh and the related security
measures. Given the urgency of the migration crisis in the
Mediterranean, it is normal that the economic migrants and the
remittances topic have been put on a shelf. However, the growing
phenomenon of irregular migration as well as the growing conflicts in
the Mediterranean area and consequently the growing number of
refugees, are jeopardizing the high number of economic migrants and
highly skilled migrants that come in EU legally (but sometimes even
illegally) and with specific working objectives.
Through some specific data on the EU, we can understand how the
potential of remittances is undervalued and how remittances can be an
important source of income for EU countries.
By 2014, migrants accounted for the 70% of the increase of the
workforce in Europe and contributed significantly to the labour-market
January 2016
25
flexibility. Despite the common thinking, migrants have represented,
since 2000/2001, the 14% of the highly educated labour force and the
15% of entries into growing occupations in Europe. Not to mention
their contribution to the declining occupations in Europe. Migrants
occupied about a quarter (24% in Europe) of entries into declining
occupation (from craft to machine operators, assemblers, etc.)28 . To be
more precise, in 2014 Italy, United Kingdom and Spain ranked as the
main sending countries of remittances.29
The changes in remittances have been characterized by changes in
migration flows. One of the peaks ever reached by Europe was in 2003
when remittances reached US$93 billion30 .
The importance of remittances has been recognized by the European
Commission that acknowledged the relevance that these financial
transfers can have both outside and inside Europe. Annual financial
transfers in the EU reached about €30 billion to countries outside the
Union and almost €8 billion within the Union31 . The data of the World
Bank (2015) registered also the migration flows of all countries all over
the world and many European states ranked in the first positions. In
particular, Germany figures out to be the third migrant-receiving
28 OECD, 2014. 29 The highest number of remittances come from United Kingdom that awarded $25.115
billion departing from migrants living in its territory; followed by Italy ($16.152 billion)
and Spain ($16.015 billion) (World Bank, 2015a). 30 Hussain, Mushtaq, “Measuring Migrants Remittances: From the Perspective of the
European Commission”, European Commission Eurostat, Unit C4, (2005): 1-5.
bit.ly/1Q3kL7c. 31 European Commission, “Workers’ Remittances”, 2012. bit.ly/1UVcfsb
The Migration-Development Nexus
26
country in the world after the United States and Saudi Arabia with 11.1
million migrants, followed by the United Kingdom (7.8 million), France
(7.5 million), Spain (6.6 million) and Italy (5.8 million)32. Eurostat also
identified the main corridors of remittances within and outside EU. In
2008, the top ten most important remittance corridors identified were:
from Italy towards China, Philippines and Romania, from Spain
towards Colombia, Ecuador and Bolivia, from France towards Portugal
and Morocco, and from Germany towards Turkey and Italy33.
The influx of remittances is important in some of the EU Member
States. In 2009 they fell to €18.0 billion, down from €21.7 billion in
2008. The biggest receiving countries in 2009 were Spain, Romania,
Poland, and Portugal. Remittance inflows came mainly from other
Member States (70% of inflows were intra-EU in 2009). In 2008 the
main corridors were to Romania from Italy and Spain, to Spain from
the United Kingdom, Switzerland and the United States, to Portugal
from France and Switzerland, and to Poland from the United Kingdom.
When remittances reached the receiving country they represented not
only a source of household consumption but also a relevant income of
foreign exchange. As a proof of this, in Romania, Poland, Portugal and
32 World Bank, “Migration and Remittances: Recent Developments and Outlook”,
Migration and Development Brief, 2015a. 33 Comini, Daniela and Faes-Cannito, Franca, “Remittances from the EU Down for the
First Time in 2009, Flows to non-EU Countries More Resilient”, Eurostat Statistics in
Focus, no. 40, (2010): 1-8. bit.ly/1Pxjy5k.
January 2016
27
Bulgaria, net remittances made a substantial contribution when it comes
to balance a negative current account34.
European countries were also classified as remittances-receiving
countries and the data showed by the World Bank (2015) should not be
underestimated. In fact, among the top ten remittances-receiving
countries in the world, two European countries figure: Germany (US$
17.5 billion) and France (US$ 24.6 billion). Moreover, other European
countries demonstrated to benefit from migrants remittances. The
World Bank showed also that Spain, Italy and United Kingdom are also
taking advantages from remittances35. As we have already seen, it is
important to underline that not all migrants (and not all economic
migrants) live outside the EU. In 2014, migrant workers in Europe sent
an amount of $110 billion to their home countries that were European
countries. In fact, most of the remittances flowed from wealthier
European countries to poorer ones. Despite Europe has just the 10%
of the world population, it hosts the 20% of all migrant workers and
the 26% of remittances36 . According to these data, the top European
34 Without remittances, the current account deficit recorded by Romania and Poland in
2009 would have been 55% and 54% higher, respectively. 35 Spain received an amount of US$ 10.5 billion, Italy US$ 9.9 billion, United Kingdom
US$ 5 billion in 2015 (World Bank, 2015b). 36 IFAD, “Sending Money Home: European flows and markets”, 2015.
The Migration-Development Nexus
28
sending countries have been classified to be Hungary, Poland and
Romania.
Thus, in Europe 19 countries are relevant remittance receivers, for a
total of US$46.5 billion: 79% originating from Europe and 21% from
the rest of the world37. Ten of these are European Union Member States
that received US$20 billion in remittances (that is 66%) from migrants
in EU sending countries. Countries of origin of these remittances
outside Europe are mainly the United States and, to a lesser extent,
Turkey38 .
37 Ivi, 17. 38 Ibid.
Figure 1. European remittances. Flows to Europe and the world
Source: IFAD 2014
January 2016
29
EU host countries also benefited from the diaspora for facilitating
transnational cooperation. Consulting the diaspora on the
implementation of development plans and policies have proven to be
successful in EU. For instance, in 2003 the UK and its International
Development Committee have involved in an inquiry the Sierra Leone
diaspora. The British Department for International Development
launched the Indian Country Assistance Plan consulting the Indian
diaspora in UK. Many other EU countries used the same method for
development projects. In 2002 until 2004, France funded €2.6 million
to involve Malians in developmental projects concerning education and
small businesses in Mali39 .
Moreover, the diaspora community has been used for a co-
development approach between host and home countries. France
39 Ionescu, 2006.
Table 1. Share of flows within Europe and the rest of the world
Source: World Bank 2014
The Migration-Development Nexus
30
launched co-development projects in 2000 promoted through
conventions with Senegal, Mali, Morocco and the Comoros to regulate
the mobility of migrants and their involvement in the host country
community. Even Italy launched a development program with Senegal
concerning the promotion of the Senegalese diaspora and financial aids
for small and medium enterprises40. These programs of co-development
were not aimed at encouraging returning migrants nor they wanted to
increase migration flows, rather they were based on reducing migration
pressures and encouraging potential migrants to find opportunities in
their home countries rather than abroad. In this sense, involving the
diaspora community in personal strategies has affected both the home
and host countries. Not only their contribution is fundamental for the
host country to cooperate with third countries, but it also helps the
diaspora in acquiring legal, political, social and economic status in
destination countries.
The data on remittances inside the European Union are not
satisfactory as those characterizing the remittances flows all over the
world41. Still, they have importance and should not be overlooked by
policymakers. The European Commission identified some major moves
in order to increase the amount of remittances and to make them
profitable for both the host and home country. For instance, the
Commission underlined the importance that collecting data on this
40 Ibid. 41 The World Bank Group's Global Knowledge Partnership on Migration and
Development (KNOWMAD) declared that in 2015 international migrants would have
sent $601 billion to their families in their home countries (World Bank, 2015a).
January 2016
31
topic can have. For instance, many entities (e.g. Eurostat or IOM) can
provide evidence of the positive and negative aspects of the
phenomenon and can shed some light on whether and how migrants
can be agents of development. Another point was that fees imposed to
the migrant should be reduced while financial advantages on
international transfers should be extended to different currencies. High
costs of transferring money should be reduced and the overall system
of transfer should be characterized by transparency. Then, the EU
Commission proposed of improving the developmental impact of
remittances through two main measures: facilitating the access to
banking and financial services in developing countries and the
promotion of projects in support of entrepreneurship42. However, the
European Commission did not update this document from 2012 and
from that date on there is no mention to remittances and migration
among EU documents and proposals. It is clear that the topic is not
among the priorities of the EU and its Member States.
Conclusions and Recommendations
The overall picture of the situation is clear: remittances are relevant
to development and researches and empirical studies have proven their
importance in both developing and developed countries. However, this
is not enough for European countries to adopt significant measures
towards the improvement of remittances. In a sense, this cannot be
42 European Commission, 2012.
The Migration-Development Nexus
32
condemned at all if we think about the migration crisis of these years.
Debates on economic migrants have been put on a shelf because civil
wars and conflicts occurring in the Mediterranean are producing not
only continuous migration flows, but also illegal migration flows.
However, the number of economic migrants is still growing and they
are still an important share of the migration flows of the last years. Thus,
if refugees should be welcomed and hosted because they deserve it and
there are regulations on the matter, economic migrants should be
welcomed and hosted because on the long run their presence can
improve the economic performances of their destination countries and
most importantly of their home countries.
The thoughts of scholars of the past years and of today about this
topic have been controversial. In fact, remittances are not one-way. The
concept itself of remittances should be clarified. Many scholars have
focused and limited their researches on economic remittances which are
clearly a relevant part of the debate on the contribution of migration on
remittances but they are not the only factors to be considered in this
process. Thus, social (and, to al less extent, political) remittances have
been discussed to give an overall view of the past and present researches
on this topic. The socio-political dimension of remittances is important
for reforming domestic policies in host countries and shaping a better
society in countries of origin. However, it cannot be ignored the brain
drain that can occur. It is impossible to stop highly skilled migrants from
leaving their home countries, and stay-at-home policies and barriers at
January 2016
33
the borders of d estination countries have proved to be
counterproductive.
Another point that should not be underestimated is the economic
crisis that is affecting the EU in general and some EU countries in
particular. This economic storm is another reason why the Member
States have shifted their interest from remittances. The overall opinion
among Europeans is that European citizens come first, and
employment opportunities and facilities should be provided to them
first. What this widespread thought ignores is that migrants can facilitate
the regression of the crisis. In fact, while some migrants remain outside
of the job market in host countries, others are making their best to enter
it and help their families back home. The crisis has affected them in the
same way as Europeans and many are reducing their daily expenses and
have taken up more than one job to secure a better standard of living
Source: Mail & Guardian Africa
The Migration-Development Nexus
34
to the household.43 Despite the economic crisis involving many
developed countries, many European citizens are avoiding manual and
strenuous jobs that migrants accept because of their desperate financial
conditions. Not to say how beneficial highly skilled migrants can be. In
fact, the common (and mostly wrong) image that host countries have
of migrants is that of poor people with very low levels of education
escaping from wars or coming to our country to 'appropriate' European
citizens' job opportunities. What the common opinion omits is that
some migrants have also high levels of education and not all the
refugees escaping from a conflict are low skilled. Many migrants coming
to developed countries were doctors, professors, lawyers, etc. All these
migrants (even simply graduated migrants) with their educational
background can bring to the destination country new knowledge and
innovation that is needed in a recession.
The suggestions launched by the Commission cited before would
have been very useful if implemented by the EU and all its Member
States. However, not only the suggestions became outdated and have
been forgotten, but also there is a widespread lack of knowledge on
remittances and its most recent trends. Despite this, many scholars and
researchers, thanks to empirical evidence, have formulated some
43 For instance, despite the scepticism among developed countries, the International
Organization for Migration has underlined the role of Filipino overseas that despite the
economic crisis, are remitting back to their country of origin. See IOM, “Why Host
Countries Must Help Migrants Weather the Economic Storm”, Geneva, 2009.
bit.ly/1U281yY.
January 2016
35
suggestions and policy recommendations on how to improve the
remittances system in both the country of origin and that of destination.
From the very beginning of the report, we have understood that the
main trigger factors for leaving the country of origin have been low
income and unemployment. Thus, any government should create new
job opportunities. This can be realized by attracting foreign direct
investments or the private sectors.
Also, emigration-oriented policies and opening new markets for
labour force should be applied44 . From the hand of the country of
origin, bilateral agreements with European states should improve
labour mobility and the way it works. Of course the creation of new job
opportunities goes hand in hand with decreasing irregular migration
streams to Europe. As many foreigners do not find any opportunity in
their home country, they tend to go abroad with the means they have
and their labour force is channelled to the market of a foreign country.
Emigration-oriented policies should thus include job matching schemes
and pre-departure training for migrants.
The most effective policies seem to be the ones that include the
improvement of the legal position of migrants as well as their social and
political context in the sending country. This should be always met with
a better investment climate and legal security so that migrants are keener
to return and to invest in the country of origin and in some cases in the
44 Zohry, Ayman. “Egyptian Youth and the European Eldorado: Journey of Hope and
Despair”, DIIS Working Papers No. 18, 2006.
The Migration-Development Nexus
36
country of destination. Remittances can be a great stimulus to
development. However, there should be the right means and
development conditions in the sending country.
Among the policies that fit the most these conditions we find those
policies that governments and development agencies use to facilitate
remittances flows. For instance, sending countries should reduce
transaction costs of remittances45 as well as increasing the security of
transfers. Moreover, the promotion of special fiscal policies, the
establishment of foreign banks and the possibility of opening foreign
currency accounts should be added to the sending countries' agenda46.
Financial services should be extended to people in need, especially those
coming from rural areas47.
On the political and social sides, dual citizenship, voting rights,
property rights, saving schemes are all services that should be provided
to every migrant living abroad. In particular, granting dual citizenship
appears to be one of the most significant measures that make the
migrant feeling their transnational belonging. In addition, the access to
all these policies should be regulated by simplifying the bureaucratic
procedures that very often are an obstacle to the success of these same
policies.
45 Banks and money transfer agencies usually make a lot of profits on remittances (De
Haas, 2007).
46 De Haas, 2007. 47 Newland, 2004.
January 2016
37
Regarding collective remittances, governments of origin and of
destination should sustain the numerous self-help organizations created
by migrants in the host country that have been established with the aim
of promoting development in sending countries. This should include
the encouragement of collective remittances by offering to these
organizations technical assistance, matching funds, marketing assistance
or with business and financial services.
Another important issue is the definition that the EU gives to
remittances. The most common and general definition "goods and
financial instruments transferred by migrants living and working in new
economies to residents of economies in which the migrant formerly
resides"48 does not represent the phenomenon in its totality. In fact, it
puts apart the significance of social and collective remittances that even
though are more difficult to classify and identify, have their relevance
and should be enhanced just as much as economic remittances are.
Moreover, the definition excludes some very common cases: for
instance, when a migrant send money to a relative outside of its country
of origin and when the migrant uses all the very usual informal channels
for sending money to the relatives. As a consequence, a core and
complete definition of what remittances are and how EU countries
could benefit from them should be provided.
Other more general recommendations should be considered when
dealing with migration benefits. One of the most frequent complain
48 Hussain, 2005.
The Migration-Development Nexus
38
among migrants has been the high level of corruption and the lack of
some political and social liberties. Thus, political stability and
democratic institutions are fundamental when dealing with diaspora
policies. Poor infrastructure, underdevelopment, lack of transparency
and a weak investment climate are the main factors determining policy
failures. In the same way, the feelings that the diaspora communities
have towards their home countries can make a difference in the way
policies are built. Reluctance, resentment and any form of
discrimination can harm the relationship between the migrant and the
homeland but also between the migrant and the host country.
Strengthening trust can be one of the measures that governments
should adopt. For instance, governments should respond to diaspora
requests on citizens’ rights and their banking needs and should simply
encourage a stronger dialogue through medias, websites and regular
meetings.49
Another factor that any government should take into consideration
is that migrants abroad are not a homogeneous group. In fact, many
surveys have made evidence of the large amount of differences that
exist among them (in terms of age, gender, occupation, education) and
the different needs they have. Decision makers should acknowledge
these differences and uniform the different needs of the diaspora
community to different policies.
49 However, the symbolic inclusion of the migrants to the homeland reality should be met
with practical inclusion through rights, partnerships and technical arrangements (Ionescu,
2006).
January 2016
39
Finally, one of the most important suggestions to host governments
is the cooperation with countries of origin in which migrants are hosted.
As a consequence, pro-diaspora policies should be combined with
integration policies in the host countries. If these policies are well
regulated and the cooperation between the two countries is stable,
migrants will be well integrated in the host country but at the same time
they will maintain strong links with their homeland. When these two
conditions are not met, the migrants' communities constitute an isolated
entity and maintain a low profile in the destination countries. By doing
so they have fewer resources and their contributions to both the
countries is very low and limited.
Unfortunately, at the present time, there are few policies on diasporas
that have actually been carried out by any European government. From
the lack of transparency to the lack of information on investment
opportunities, the relationship between the host country and its
migrants is still weak and hampered by the lack of trust.
However, the main purpose of this paper was to underline the
importance that remittances can have on the country of origin and on
destination countries in particular. Remittances can mean a significant
increase in income and improvements in the living conditions,
education, health and welfare among migrants abroad. When some
measures are applied, remittances can also be the source of investments
and thus a stable source of foreign currency. This is not to say that
remittances can put an end to any form of poverty. They are just a small
percentage of income at the moment for the country of origin, but if
The Migration-Development Nexus
40
promoted and improved and if accompanied by other developmental
measures, remittances can be useful means for the economic, social and
political development.
In conclusion, it can be said that migrants' remittances tend to have
a positive developmental impact on the migrants' household and
contribute to the willingness of migrants to invest. However, there is
still a need to improve the means towards which remittances can be
channelled and invested and through which they can maximize the well-
being and living standards of both migrants abroad and the community
of the destination country. Developed countries should understand that
the solution to irregular migration is not closing the door to migrants
and fall into xenophobia, because in this way, the migrants and their
families will lose out as the host countries and its communities will.
When policymakers will acknowledge that the contribution of migrants
can contribute to long term development goals, all destination countries
(as well as the migrants' homelands) will benefit from these flows.
January 2016
41
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The Migration-Development Nexus
44
About the Authors
Giuliana Scalia
Graduated with a Bachelor’s Degree in Languages and Literatures at
University of Catania. Master’s Degree in Global Politics and Euro-
Mediterranean Relations held in the same university presenting a thesis
about Egyptian remittances and their contribution to the Egyptian
development.
January 2016
45
Ed. Mediterranean Affairs©
www.mediterraneanaffairs.com
Cover image source: Mediterranean Affairs
The Migration-Development Nexus
46