What do we know about remittances and forced displacement?
This post was originally posted on the World Bank - People Move website.
Over 65 million persons were forcibly displaced worldwide due to conflict and persecution at the end of 2015. Many of them remain displaced for a long period of time. Personal transfers sent to refugees and Internally Displaced Persons (IDPs) can contribute to livelihoods in protracted situations and increase self-reliance. Existing evidence suggests that they can be an important source of income, sent from the diaspora in third countries or from families and friends left behind. They can also play an important role in helping set up economic activities in protracted situations.
At the same time, refugees and IDPs also send remittances, to refugees and IDPs in other places or to family and friends back home during times of conflict and peace. As their main reason for moving was not economic, their remittance behavior and the challenges they face might differ from economic migrants and might change over time. Policy frameworks and regulations can limit or promote refugee and IDP access to remittances. However, there is a lack of knowledge on remittances send to and from refugees and IDPs. Research has mainly explored remittances in the context of economic migration.
A literature review conducted for the Global Knowledge Partnership on Migration and Development (KNOMAD) showed that there is almost no research on transfers sent and received by those internally displaced and the evidence on refugees is concentrated around a few country case studies. There is also a scarcity of quantitative research. A better understanding of remittances in forced displacement situations can help policy makers design policies and regulations to maximize their positive impacts and minimize the risks. A KNOMAD workshop brought together leading researchers and practitioners in this field to define key research gaps from a policy perspective, identify solutions for methodological challenges and develop ideas how to improve the evidence base.
Among the key issues identified was understanding the regulatory environment and its impacts on the number of formal remittance service providers available to refugees and the costs of using them. The regulations are, on the one hand, linked to the legal status of refugees (and might in some cases serve to deter them from coming and/or integrating into the host country). These regulations might or might not allow them to officially send remittances, open bank accounts, provide the required identification documents and travel to use the services of different remittance service providers. On the other hand, there are financial regulations that are linked to security concerns, notably the AML/CFT and KYC regulations, and how the private sector implements these regulations.
The second priority identified was understanding the role of remittances in the livelihoods of the displaced and how this is influenced by policies in the host country (like the right to work or set up businesses). Regarding the data sources, participants agreed that further research should focus on quantitative approaches but triangulate the results, and include research over time (longitudinal data). Besides conducting new surveys, existing data sources should be exploited. The literature review prepared for the workshop listed a number of further data sets that have information on transfers and allow to identify refugees or IDPs but have not been exploited by researchers yet (see annex 2 of the literature review).
Participants also recommended including more questions on refugees and IDPs and their remittances in ongoing household surveys, to see if it is possible to oversample refugees and IDPs, and to exploit UNHCR registration data. Furthermore, data collected by Central Banks and remittance service providers should be accessed and used. Remittance price comparison websites also generate data that have not been analyzed yet, and could potentially generate even further data. The workshop also triggered further ideas on exploiting synergies with humanitarians working on the establishment of cross-border cash transfers.
About the Author
Kirsten Schuettler is a Senior Program Officer at the World Bank's Development Economics - Global Indicators Group. In the Migration & Remittances team her responsibilities include monitoring remittances flows to the MENA region and contributing to the implementation of the Global Knowledge Partnership on Migration and Development (KNOMAD).