Download Key Issues in Recording of Remittances in the Balance of Payments

Key Issues in Recording of
Remittances in the Balance of
Payments and Recent Improvements
in Concepts and Definitions
International Technical Meeting
on Remittances Statistics
The World Bank
Washington, D.C., June 11-12, 2009
Overview
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Background on the decision to improve
remittance statistics
New concepts and definitions
Recent work undertaken by the IMF in
remittances
Data issues and classification problems
Current Data on Remittances
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Recent Growth of Remittance Flows-2001-07
Remittance receipts exceed exports of goods
and services in some economies
Impact of rising migration, labor mobility,
liberal financial markets, and improved data
Evidence that data on remittances are less
reliable than many other items in BOP
accounts
Current Data on Remittances
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Defined as Compensation of Employees and
Workers’ Remittances
Global level, remittance receipts has exceeded
remittance payments consistently from 2001-07
Gap reflects incomplete coverage, inaccurate and
inconsistent recording; underreporting possible
Problems related to nature of remittances flows
Remittances-related items in BPM5 made
identification of remittances difficult
Calls for Improvements in
Remittances Data
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Good quality data highlighted by G8 Heads of State in 2004
Called for improvements in both definitions of key aggregates
and estimation techniques
Called for a World Bank-led working group to improve data
2005 conference agreed to improve remittance data
Simply clarify, and expand definitions of remittance-related
items
Use BOP framework for collecting reporting and improving
statistics
Improve guidance for collecting and compiling remittance
statistics
Work on New Definitions
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UN Technical Sub-Group on Movement of Persons
developed the framework
Developed the new and improved definitions
Introduced several new supplementary items to the
BOP framework
Expanded definition of remittance-related to meet
users’ needs
The TSG reported its proposals to BOPCOM and the
AEG
Economic Concept of Remittances
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BPM6 defines economic concept of remittances,
standard components and supplementary items
Remittance represent household income from
foreign economies―cash and noncash
BOP framework is broader than movement of
persons―not based on migration or family ties
BPM6 definition linked to the residency concept
Remittance linked to compensation of employees
Remittances linked to personal transfers
Supplementary Measures of
Remittances
New standards identify three supplementary
items related to remittances
 Personal remittances
 Total remittances
 Total remittances and transfers to NPISH
Total remittances and transfers to NPISH
approximate economic definition
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Guidance on Remittances Compilation
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Compilation guidance on remittances undertaken by
the Luxembourg Group
Remittance Compilation Guide (RCG) developed
during 2006-08
The IMF coordinated and edited text of RCG
RCG summarizes concepts and provides practical
compilation guidance
RCG identifies the main compilation methods and
data sources and their strengths and weaknesses
Mainly ITRS, MTOs, Household Surveys, Models,
etc.
Promotion of New Guidance
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BPM6 Compilation Guide and BPM6
Textbook will provide more guidance
Work on BPM6 Compilation Guide to begin in
2009
IMF’s support for dissemination of remittance
data in BOPSY including supplementary data
Need improved metadata with BOPSY or
other remittance website
Compiling Remittances Data
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BPM6 brings more clarity in concepts and
definitions-facilitate compilation and analysis
BPM6 more oriented to users’
needs―standard and supplementary
measures provide more information
Users can compile different measures
beyond those in BPM6 for analysis
Compilation problems will be encountered
Remaining Challenges in Compiling
Remittances Data
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Countries encounter different problems and
apply different solutions
Data weaknesses and omissions normally
result from lack of access to source data
Heterogeneous transactions by individuals in
small amounts pose challenges
Identification of all possible sources will
present challenges