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www.afrology.com Linking Migration and Microfinance

Global Forum on Migration and Development – Contact : [email protected]

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Vienna Migration Group Conference

Linking Migration and Microfinance

5 October 2007

The Global Forum on Migration and Development:

Progressing from Brussels 2007 to Manila 2008 – Addressing a Millennium Challenge

Vienna International Center, Vienna, Austria,

Dr. Yves Ekoué Amaïzo(speaking in my personal capacity)

Director of “Afrology” Think Tank - Economist with UNIDO

Email: [email protected] - Internet: www.afrology.com



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Content

1. Global Migration: From poor to rich regions

2. Linking Migration, Development and Diaspora

3. Promoting Migration, Microfinance and Productive activities

4. Cosmopolite States: Towards Global, Regional and National Migration Charters



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1. Global Migration: From poor to rich regions



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15.97

-15.98

12.92

-12.95

-20

-15

-10

-5

0

5

10

15

20

1990-95 2000-05

Low & Middle income countries High income countries

Net Migration: People moving from LIC & MIC to HIC, 1990-95 and 2000-05 (in millions)

Source: WB, WDI 2007, p. 362.



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69.5

37.4

192.9

31.1

0

50

100

150

200

Low & middle income countries High income countries

1990 2005

Workers’ remittances transferred homeLIC & MIC versus HIC, 1990-95 and 2000-05 (in millions)

Source: WB, WDI 2007, p. 362.

Reduce poverty

Increase savings and improve well-being



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152.8

190.6

16.417.1

7

6.6

27.6

44.5

49.4

64.1

4.8

5

49.853.3

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200

World

Africa

Latin America and Car.

North America

Europe

Oceania

Asia

1990 2005

Migrants per regions, 1990 and 2005(in millions)

Source: ONU, Trends in Total Migrant Stock: the 2005 Revision.



7

0.7

-0.3

16.9

14.7

0.3

3.5

-2 0 2 4 6 8 10 12 14 16 18

Africa

Latin America and Car.

North America

Europe

Oceania

Asia

Increase of the number of Migrants per regions,1990 et 2005 (in millions)

Source: UN, Trends in Total Migrant Stock: the 2005 Revision.



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2. Linking Migration, Development and Diaspora



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Migration and Globalization: Panic or Increased control

Convergence in Migration Policy

Behaviour

Diffusion of threats



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Legal and Illegal Migration: No hope at home Lack of jobs, wealth creation, security and peace

Dr. Kessile Tchala, Minister of Health Benin, Member of the 10th best

Physicians/Surgeons on Prostata in France who decided to return home to

improve the health situation

H O P E

Illegal migrants searching desperately for better opportunities

N O H O P E



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Increasing interdependent economies and societiesFrom national to regional sovereignty on migration matters

Stimulation of Migration

o Transnational flows capital o Downwards trends of transportationo Information, media & communication produce new desires and renewed hopeso Interest for foreign workers (Two main areas: knowledge-intensive and low-cost for short term activities) o Offering jobs and resident documents in selected professional sectors in rich countries

Structuring the Migration Flows

Repressive migration policiesUnilateral controls of bordersSelection of immigrantsStructuring migration around fix-term contractsBilateral agreements with Governments (countries of origin of Migrants)

Ensuring cultural and language training paid by a tax (partly while delivering resident documents to migrants)



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Regional expatriation to OECD Countries in 2006*, (in %)Educated people: moving faster out from Poverty, searching for Security

* Sanjeev Gupta, Catherine Pattillo, and Smita Wagh, Impact of Remittances on Poverty and Financial Development in Sub-Saharan Africa, IMF Working paper WP/07/38, February 2007



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FREE MIGRATION DOES NOT EXIST

Globalization of job markets favor

qualified people

Developing countries need qualified people

Brain Drain towards rich countries contribute to delay wealth creation in

Poor Countries

Linking migration and development not questionable!

Migration charters



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Brain Drain and Terms of Trade:

1. New role of the Diaspora2. New role for Social Responsibility Actors



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New Economic Migration Challenges:BRAIN GAIN: Mobility of competences and work forces

Structuring access to Finance

Migration Saving accountSpecial conditions/facilities for equipment/technologies transfer A real effort to stop discrimination linked to “the origin of the migrant”

Why does Migration takes place ? Development deficits Looking for better working conditions Poor governance Corruption and failed legal system (inequalities) Lack of sanitary and education security Violation of human rights Information deficits on role of intermediates

Wealth distribution with Diaspora Integration of the Diaspora in the preparation and implementation of Migration solutions 23% of Doctors (Physicians) in New York are from Ghana, same average for Doctors from Benin in Paris New framework needed: Towards Interdependent Charter on Migration



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3. Promoting Migration, Microfinance and Productive

activities



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10.8

-7.3

-13

3.7

-2

25.3

16.4

-15 -10 -5 0 5 10 15 20 25 30

European Union

Subsaharain Africa

North Africa andMiddle East

Latin America andCaribbean

Europe and CentralAsia

Asia East and Pacific

Asia South

Adjusted Savings* per regions, 2005 (in % of GDP)Inequality in wealth distribution

Source: World Bank, WDI 2007, p. 182;* Including following costs: education, losses in terms of energy, minerals, forests, various polluting substances, etc.



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… Poor people stay poor mainly not because they are lazy but because they do not have access to capital…

… Development supposed economy of scale, productivity for all and at all levels…

… Poor people and Migrants usually left out of a serious system of financial leverage…

Building social and financial value added through microfinance and financial intermediation

New priority on entrepreneurship Stopping working in isolation (building productive networks) Ensuring technology content Productivity Accessing credit with affordable interest rates Ensuring conducive business environment Organizing productive agglomeration Reducing cost of official transfer of remittances

Microfinance: a leverage system for Migrants



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73.9

101.1

29.7

28.8

27.8

35

39.9

24.238.7

41

64.8

77.9

110.5

0 10 20 30 40 50 60 70 80 90 100 110 120

Asia East and Pacific

Europe and Central Asia

Latin America andCaribbean

North Africa and MiddleEast

Asia South

Subsaharan Africa

European Union

2005

1990

Credit to local private sector, per world regions1990 and 2005 in % of GDP

Source: World Bank, WDI, 2007, p. 266.



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Inflows to Subsaharan Africa countries, 1975 – 2004 (in millions of US $)*

Remittances are less volatile




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* Source: IMF Balance of Payment Yearbook, 2006 and in Sanjeev Gupta, Catherine Pattillo, and Smita Wagh, Impact of Remittances on Poverty and Financial Development in Sub-Saharan Africa, IMF Working paper WP/07/38, February 2007

Regional Shares of Remittances to Developing Countries, 2000-05* in Millions of US $

20.3

14.4

23.9

24.9

12.5

4.1

Latin America & Caribbean

East Asia and Pacific

Middle East & North Africa

South Asia

SubSaharan AfricaEast & Central

Asia



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1. Building domestic markets and new local financial intermediates based on “group solidarity” loans

2. Moving savings and remittances towards productive activities

3. Providing financial services to poor and marginalized communities (including migrants)

4. Attracting investors dedicated to social corporate responsibility

5. Securing access to credit at local level to reverse the poverty trap

6. Innovative micro-savings and micro-insurance products

7. Leveraging on less volatile migrants remittances8. Promoting microfinance and rating institutions9. Building local capital markets

Linking Microfinance and Migrants’ remittancesFrom Philanthropy to new profit-making businesses

Between 2000-2006 - From 78 to 420 microbanksEquivalent to 9.2 to 64 millions “poor” clients*

* The State of the Microcredit Summit Campaign Report, 2006



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Top Ten Recipients of Remittances in Subsaharan Africa, Total flows (in millions of US $)*


Pilot Projects

(microfinance and migration)

should start in those

countries



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4. Cosmopolite States: Towards new global, regional

and national Migration Charters



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Strategic Migration:Structuring Cosmopolites States

Understanding of People’ s and not simply Governments’ Concerns

Do not overlook the Visible and not-Visible Migrants issue (the case of Africa)

Win-win strategy: Promotion of Diversity



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TRANSPARENCY

CO-DEVELOPMENT

Borders Control Migration Policy

Selective MigrationPolicy

Negotiation of Migration Policy

Planning of MigrationPolicy

Migration as a Wealth Creation system: Towards Global, Regional and National

Charters

Divergence

Considering Africa as a variable of adjustment

Convergence

Considering Africa as a development partner

NATIONALISTSTATES

COSMOPOLITE NATIONS

ASSETSPromotion of Diversity

LiabilitiesIncreased control costs

Source: Adjusted from E. Reinert, Y.E. Amaizo, R. Kattel, “ The Economics of Failed, Failing and Fragile States: Productive as the Missing Link”, Working Paper, UN DESA, June 2007 (under consideration) .

Failed, Failing and Fragile Productive capacities and

capabilities

MIGRATION: Economic Growth

without Job Creation

Interdependency and cosmopolitism

Integration Policy required



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OLD

DEBATE

We need better Immigration laws

Profiling is politically incorrect. Besides, they pose no real threat to us…

Source: Ramirez

MIGRATION



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Thank You

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