Do Financial Remittances Build Household- Level Adaptive Capacity?
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KNOMAD WORKING PAPER 18 Do Financial Remittances Build Household- Level Adaptive Capacity? A Case Study of Flood-Affected Households in India Soumyadeep Banerjee, Dominic Kniveton Richard Black, Suman Bisht Partha Jyoti Das, Bidhubhusan Mahapatra Sabarnee Tuladhar January 2017 i The KNOMAD Working Paper Series disseminates work in progress under the Global Knowledge Partnership on Migration and Development (KNOMAD). A global hub of knowledge and policy expertise on migration and development, KNOMAD aims to create and synthesize multidisciplinary knowledge and evidence; generate a menu of policy options for migration policy makers; and provide technical assistance and capacity building for pilot projects, evaluation of policies, and data collection. KNOMAD is supported by a multi-donor trust fund established by the World Bank. Germany’s Federal Ministry of Economic Cooperation and Development (BMZ), Sweden’s Ministry of Justice, Migration and Asylum Policy, and the Swiss Agency for Development and Cooperation (SDC) are the contributors to the trust fund. The views expressed in this paper do not represent the views of the World Bank or the sponsoring organizations. All queries should be addressed to [email protected]. KNOMAD working papers and a host of other resources on migration are available at www.KNOMAD.org. ii Do Financial Remittances Build Household-Level Adaptive Capacity? A Case Study of Flood-Affected Households in India* Soumyadeep Banerjee, Dominic Kniveton, Richard Black, Suman Bisht, Partha Jyoti Das, Bidhubhusan Mahapatra, and Sabarnee Tuladhar† Abstract This paper examines the role of financial remittances on the adaptive capacity of households in flood- affected rural communities of Upper Assam in India. Findings reveal that remittances-receiving households are likely to have better access to formal financial institutions, insurance and communication devices than nonrecipient households. This study indicates that the duration for which remittances are received by a household has a significant and positive association with structural changes made by the household to address flood impacts, farm mechanization, the household’s access to borrowing, and participation in collective action on flood relief, recovery and preparedness. The adaptation potential of remittances of remittances can be realized if policy attention is given to attempts to enable gains in financial capital to be translated to gains in other types of capital and how the social element of remittances can be used to boost social capital. For example, by facilitating an increase in financial literacy and skills training, particularly among the poorer households in areas likely to be affected by the impacts of climate change and variability. Keywords: adaptation, adaptive capacity, remittances, migration, flood, Assam, India * This paper was produced under KNOMAD’s Thematic Working Group (TWG) on Environmental Change. KNOMAD is headed by Dilip Ratha, the TWG on Environmental Change is chaired by Susan Martin (Professor Emeritus, Georgetown University) and Kanta Kumari (World Bank), and the focal point is Hanspeter Wyss (KNOMAD Secretariat/World Bank). The authors would like to thank Dr. Golam Rasul (International Centre for Integrated Mountain Development/ICIMOD), Mr. Nand Kishor Agrawal (ICIMOD), and Dr. Arabinda Mishra (ICIMOD) for their support and encouragement. Special thanks to the Aaranyak team for their invaluable support during the field work. The authors would like to thank Dr. Vishwas Chitale (ICIMOD) and Mr. Gauri Dangol (ICIMOD) for their assistance in preparing the figures and maps. The authors would like to thank as well the anonymous reviewers for their helpful feedback. This paper is based on research that was supported by the Himalayan Climate Change Adaptation Programme (HICAP), which is implemented jointly by the ICIMOD, the Centre for International Climate and Environmental Research Oslo (CICERO), and Grid-Arendal in collaboration with local partners and is funded by the Ministry of Foreign Affairs, Norway, and the Swedish International Development Agency. The views and interpretations in this paper are those of the author(s) and are not necessarily attributable to ICIMOD. † Soumyadeep Banerjee is the corresponding author. Tel: +977 1 5003222 (Ext: 315). Email address: [email protected]. He is at the International Centre for Integrated Mountain Development (ICIMOD), Kathmandu, Nepal, and University of Sussex, Brighton, United Kingdom. Dominic Kniveton is at University of Sussex, Brighton, United Kingdom, Richard Black is at SOAS, London, United Kingdom; Suman Bisht is at ICIMOD; Partha Jyoti Das is at Aaranyak, Guwahati, India; Bidhubhusan Mahapatra and Sabarnee Tuladhar are both at ICIMOD. iii Table of Contents 1. Introduction ............................................................................................................................. 1 2. Adaptation and Adaptive Capacity ............................................................................................ 3 3. Migration, Remittances, and Adaptive Capacity ........................................................................ 4 4. Adaptive Capacity in Flood-Affected Rural Areas ....................................................................... 4 4.1 Case Study: Eastern Brahmaputra Subbasin in Upper Assam, India ............................................. 4 4.2 Research Methodology and Method ............................................................................................ 6 4.3 Regression Analysis ....................................................................................................................... 9 4.4 Mixed Methods Approach .......................................................................................................... 11 5. Results ................................................................................................................................... 11 5.1 Household-Level Response to Floods ......................................................................................... 11 5.2 Livelihood Practices and Income Sources ................................................................................... 14 5.3 Household-Level Adaptive Capacity and Remittances ............................................................... 17 6. Discussion .............................................................................................................................. 21 References ................................................................................................................................. 24 ANNEX 1. ................................................................................................................................... 31 ANNEX 2. ................................................................................................................................... 37 iv 1. Introduction The impacts of climate change are likely to be felt most by those countries already facing the development challenges of widespread poverty and poor governance (McCarthy et al. 2001). Although some progress has been made toward ameliorating the causes of climate change, namely, agreements for reducing greenhouse gas emissions, there remains a pressing need for countries and their peoples to build their ability to adapt to the impacts of future climate change. Many adaptations by individuals, households, and communities are likely to occur where the impacts of climate change are felt. However, it has been suggested that as an alternative to in situ adaptation and as the limits of in situ adaptation are reached, migration for work is an option in households’ adaptation portfolios. Temporary and seasonal migration enables people to stay in their rural homes over the longer term when faced with shorter-term environmental challenges (Tacoli 2009). Financial remittances sent back by migrant workers contribute to the welfare of the household in origin communities and support their sustenance during climate shocks and stresses (Stark and Levhari 1982; Yang and Choi 2007). Financial remittance inflows are more stable than other forms of private capital flows, particularly during crisis (Ratha 2003; Kapur 2004; De et al. 2016). Apart from financial remittances, migrants facilitate the circulation of ideas, practices, and identities between destination and origin communities (Levitt 2001). In a study in Thailand, Sakdapolrak (2014) finds that returning migrants introduced ideas about new local businesses (for example, Internet cafes), or crucially influenced the introduction of new innovative agricultural practices. Indeed, migration forms one of a number of livelihood strategies already chosen by individuals and households in response to other transformative pressures and opportunities (for example, higher wage potential in urban areas, perception of relative deprivation, and improved access to communication and transportation infrastructure) even without the impacts of climate change. Over the past decade the humanitarian aspect of mobility in the context of environmental risks, as manifested in displacement and emergency response, has received increased attention from academics, think tanks, and international organizations (for example, Fussell and Harris 2014; Kalin 2015; McAdam 2015). The humanitarian approach perceives the displaced population as a victim of externalities such as extreme events and the failure of state mechanisms for social protection. While these