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LEVERAGING MIGRATION Forafrica Public Disclosure Authorized LEVERAGING MIGRATION for AFRICA Public Disclosure Authorized Remittances, Skills, and Investments Public Disclosure Authorized Public Disclosure Authorized Leveraging Migration for Africa Leveraging Migration for Africa Remittances, Skills, and Investments Dilip Ratha Sanket Mohapatra C ¸ a˘ g lar Özden Sonia Plaza William Shaw Abebe Shimeles Washington, DC © 2011 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org All rights reserved 1 2 3 4 14 13 12 11 This volume is a product of the staff of the International Bank for Reconstruction and Devel- opment / The World Bank. The fi ndings, interpretations, and conclusions expressed in this volume do not necessarily refl ect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www. copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Offi ce of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. ISBN: 978-0-8213-8257-8 eISBN: 978-0-8213-8718-4 DOI: 10.1596/978-0-8213-8257-8 Library of Congress Cataloging-in-Publication Data Leveraging migration for Africa : remittances, skills, and investments / edited by Dilip Ratha. p. cm. Includes bibliographical references and index. ISBN 978-0-8213-8257-8 — ISBN 978-0-8213-8718-4 (electronic) 1. Emigrant remittances—Africa. 2. Africa—Emigration and immigration—Economic aspects. 3. African diaspora—Economic aspects. 4. Investments, Foreign—Africa. 5. Economic development—Africa. I. Ratha, Dilip. HG3982.L48 2011 338.96—dc22 2011012319 Cover painting: Diana Ong/SuperStock by Getty Images Cover design: Drew Fasick Table of Contents Foreword xi Acknowledgments xiii Abbreviations xvii Introduction and Summary 1 Trends in African Migration 1 Managing Migration 3 Improving the Effi ciency of Migrant Remittances 4 Addressing High-Skilled Migration 7 Eliciting Contributions from Diasporas 9 The Way Forward 11 Bibliography 12 Chapter 1 Migration Patterns and Policies in Africa 13 Migration from and within Africa 15 Immigration to Africa 23 Understanding Cross-Country Migration Patterns 23 Socioeconomic Characteristics of Migrants from Africa 26 Managing Migration 30 Annex 1A 38 Notes 40 Bibliography 41 Chapter 2 Migrant Remittances 47 Recent Remittance Trends and the Impact of the Global Financial Crisis 49 Implications of Remittances at the Macroeconomic Level 54 v vi • Table of Contents Development Impact of Remittances at the Microeconomic Level 60 Remittance Markets in Africa 73 Toward Less Costly and More Transparent Remittances: Policy Changes 84 Annex 2A 92 Notes 96 Bibliography 99 Chapter 3 Migration of the Highly Skilled 109 Benefi ts and Patterns of High-Skilled Migration 111 Earnings of Tertiary-Educated Migrants in Destination Labor Markets 124 Policy Options 137 Notes 142 Bibliography 143 Chapter 4 Harnessing the Resources of the Diaspora 147 Locating the African Diaspora 148 Benefi ting from Diasporas 150 An Emerging Policy Agenda to Maximize the Benefi ts of Diasporas 165 Annex 4A Examples of African Government Institutions Dealing with Diaspora Communities Abroad 177 Notes 180 Bibliography 183 Boxes 1.1 Problems with Data on African Migration 16 1.2 Forced Migration in Africa 20 1.3 The Social Costs and Benefi ts of Migration 31 1.4 The Evolution of European Policies toward Migration from Africa 36 2.1 How Do Remittances Affect Education Outcomes? 66 2.2 Moving Money through M-Pesa in Kenya 81 2.3 Post Offi ces and Remittances in Africa: A Pilot Project in West Africa 85 2.4 Policy Initiatives on Remittances in Africa 86 2.5 Increasing Transparency and Competition in Remittance Markets: Wall Street Reforms and the European Union’s Payment Services Directive 88 Table of Contents • vii 3.1 The Brain Gain 112 3.2 Migration Patterns of Ghana’s Best and Brightest 126 3.3 Ghana: A Case Study of Emigrant Physicians 132 3.4 Incentives to Retain Health Professionals in Ghana 139 4.1 Defi ning Diasporas 149 4.2 A Case Study of African Associations in Denmark 162 4.3 Educating the Rwandan Diaspora about Elections in Rwanda 168 4.4 The Role of Embassies in Enabling Diasporas 174 Figures 1 Stock of Emigrants from Africa, 2010 2 2 Remittances and Other Resource Flows to Africa, 1990–2010 5 3 High-Skill Migration Rates in Africa, by Country Size and Income Level, 2000 8 4 Major Destination Countries for Emigrants from Africa, 2010 10 1.1 Major Destination Countries for Emigrants from Africa, 2010 17 1.2 Rate of Migration, by Country, 2010 18 1.3 Major Migration Corridors in Sub-Saharan Africa, 2010 22 1.4 Rate of Immigration to African Countries, 2010 24 1.5 Relationship between Intra-African Migration and per Capita GDP, 2006 24 1.6 Relationship between Emigration Rates to OECD Countries and Log per Capita GDP in Africa, 1990–2000 25 1.7 Relationship between Colonial Links and Emigration Patterns in Africa 26 2.1 Remittances and Other Resource Flows to Africa, 1990−2010 50 2.2 Source of Remittances to Africa and to All Developing Regions, 2010 53 2.3 Stability of Various Sources of Resource Flows to Africa, 1990–2008 55 2.4 External Debt as a Share of Exports from and Remittances to Selected Countries in Sub-Saharan Africa 56 2.5 Percentage of Remittance Recipients in Top Two Consumption Quintiles in Selected African Countries, by Source of Remittances 61 viii • Table of Contents 2.6 Average Annual Remittances in Selected African Countries, by Source of Remittances 62 2.7 Secondary and Tertiary Education Attainment of Remittance Recipient and Nonrecipient Households in Selected Countries in Africa 67 2.8 Share of Population in Burkina Faso and Ghana with Concrete Houses, by Remittance Status 70 2.9 Percent of Households with Bank Accounts in Selected African Countries, by Remittance Status 72 2.10 Factors Inhibiting the Use of Formal Remittance Channels in Sub-Saharan Africa and All Developing Countries 74 2.11 Cost of Sending Remittances to and from Developing Regions 75 2.12 Cost of Sending $200 within Sub-Saharan Africa 76 2.13 Measures of Retail Banking Accessibility in Developing Regions 77 2.14 Formal and Informal Remittance Channels in Africa 79 2.15 Most Important Areas Related to Migrants and Remittances Needing Attention, According to Central Banks in Sub-Saharan Africa 87 3.1 Share of Migrants in Labor Force, by Region, 1990 and 2000 113 3.2 Migration Rate among Tertiary-Educated Workers, 1990 and 2000 114 3.3 Share of Tertiary-Educated Migrants among All Migrants, 1990 and 2000 114 3.4 Share of Tertiary-Educated Workers in the Labor Force, 2000 115 3.5 Tertiary-Educated Migration Rates in Selected African Countries 117 3.6 Migration Rates in Africa, by Country Size, 1990 and 2000 118 3.7 Migration of Tertiary-Educated Workers in Africa, by Country Income Level, 2000 119 3.8 Distribution of Total Migrants and Skilled Migrants from Africa by Destination, 1990 and 2000 121 3.9 Distribution of Migrants and Skilled Migrants from Selected Anglophone Countries in Africa, 2000 122 3.10 Distribution of Total Migrants and Skilled Migrants from Selected Francophone Countries in Africa, 2000 123 3.11 Probability That an African-Born Migrant Holding a Bachelor’s or Professional Degree Obtains a Skilled Job in the United States 125 Table of Contents • ix 3.12 Stock of Migrant Physicians in OECD Countries as Percentage of Locally Trained Physicians in Source Region, by World Region 130 3.13 Number of African-Trained Physicians in Africa and in OECD Countries, 1991–2004 131 3.14 Number of African Physicians Working in Selected OECD Countries, 1991 and 2004 134 3.15 African Countries with Highest Rates of Physician Emigration, 1991 and 2004 134 3.16 Migration Rates among Nurses, by Country, 2000 136 4.1 Top Countries of Origin of African Immigrants in the United States, 2010 150 4.2 Migration and Trade Go Hand in Hand: African and OECD Countries 152 4.3 Investments in Business and Housing Funded by Remittances from within and outside Africa 154 Tables 1.1 Emigrants as Percentage of the Population in Selected World Regions, 2010 16 1.2 Origin and Destination of Emigrants, by World Region, 2010 19 1.3 Migration within and outside Africa 19 1.4 Projected Changes in the Size of the Working-Age Population in Selected World Regions, 2005–50 23 1.5 Characteristics of Migrants from Selected African Countries 27 1.6 Occupation of Individuals from Burkina Faso before and after Migrating, 2009 29 1.7 Labor Market Status of Individuals
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