Download TSG/2/16a

Definition of remittances
Technical Subgroup on the Movement of
Natural Persons
(Paris, 31 January -2 February 2005)
1
Overview
• Policy context
• Definitions used in analytical studies
• Proposed alternative definitions for
remittances
• Points for discussion
2
Policy context
• Worldwide remittances are very large in size
(up to 20% of some countries’ GDP)
US$125bn or higher (???) – match Foreign
Direct Investment and exceed Official
Development Assistance to developing
countries
• Remittance flows are very stable
• Source of income for households – possibly
affecting poverty
• Interest in relation to trade policy (Mode 4 of
the GATS)
3
Definitions used in studies
• Not clearly defined in analytical studies
• World Bank - GDF
• Workers remittances + COE +
migrants’ transfers
• Anne Harrison + DFID
• Workers’ remittances + COE
4
What are we measuring?
• Flows from migrant workers – long or short term?
• Flows received by households from related
persons abroad ?
• Flows received by households from abroad
regardless of the source (e.g. related persons, nonrelated persons, NPISH, government, etc.) ?
• Flows received from abroad and used by or for the
benefit of households?
5
Definition of “remittances” Narrow (1)
• Household to household transfers
• Excluding COE
• Including all transfers independently of
• Source of income (employment or other sources)
• From a migrant or not
• From a family member or not
• Purpose (gifts, alimony, etc. ) – could be for
investment
• BPM5 flows: Workers’ remittances, Other current transfers
and capital transfers (other than migrants’ transfers)
6
Definition of “remittances” Narrow (2)
• Household to household transfers – including
COE
• Issues:
• The worker is still a member of the household
in the home country
• COE received by the household in the home
country is NOT an actual flow
• Need to derive “net” COE (net of travel, taxes
on income and social contributions to the host
country)
7
Definition of “remittances” Broad (1)
• Flows to households independently of the
sending sector (e.g. NPISH, government,
enterprise)
Include:
• Pensions
• Social benefits
8
Definition of “remittances” Broad (2)
• Flows to households and NPISH
independently of the sending sector
Include:
• Transfers to NPISH
9
Points for discussion
• Does the TSG agree with the definition of remittances in
“Broad (2)”?
• If not, which definition would the TSG prefer?
• Does the TSG think that the definition of workers’
remittances should be clarified?
• Does the TSG agree with the concept of “net COE”
• Does the TSG agree that migrants’ transfer should not be
included in the definition of “remittances”
• Does the TSG agree that capital transfers should be
included in the definition of remittances?
• Does the TSG agree to include flows to NPISH be
identified separately from flows to households and added
to the latter for a more complete assessment of
remittances?
10