Economic and Social Survey highlights remittances as resource for development

The recently released 2006 Economic and Social Survey of Asia and the Pacific 2006 published by ESCAP places great emphasis on the role of migrants’ remittances as a major contribution to development. In the ongoing challenge of poverty reduction, the annual publication urges to utilize the benefits of home remittances in order to simultaneously improve social indicators and macroeconomic fundamentals.
“Over the last two decades or more, remittances by migrants or temporary workers in foreign countries to their countries of origin have made a major socio-economic contribution in many countries”, the Survey states. “At the social level, remittances have added to family incomes and boosted consumption. At the national level, remittances have reduced, in some cases substantially, the current account deficit of many developing countries”. The Survey highlights recent data indicating that remittances from high-income countries to developing countries reached more than USD 167 billion in 2005, “an unprecedented sum, amounting to twice the level of official development assistance from all sources”.
According to the Survey, several factors have contributed to the recent surge in remittances, including the liberalization of financial markets, the surge in the number of bank branches seeking remittance-related business and changes in the skill composition of workers going abroad.
The Survey emphasized that remittances could help countries achieve some of the targets of the Millennium Development Goals, for example by reducing household poverty and facilitating the formation of small businesses. Remittances’ macroeconomic impacts are also discussed.
The Survey is published under the theme “Energizing the Global Economy” and devotes a special chapter to the growing threat of regional unemployment and underemployment. Among the recommended policy responses, the Survey encourages various measures for labour market-related institutional development, including a rule-based framework for the international migration of workers. International migration could help to stabilize labour markets in both labour-importing and labour-exporting countries, it notes. In this respect, a rule-based flow of persons under a global framework such as Mode 4 of the General Agreement on Trade in Services (GATS) of the World Trade Organization, could produce tangible benefits for all countries.
The publication was launched simultaneously in 14 cities in Asia-Pacific as well as at United Nations Headquarters in New York and Geneva. Among other findings, the Survey highlights that global economic growth slowed to 3.2 per cent in 2005, that the growth rate in the region’s developing countries decelerated moderately and that softening of global trade and high and volatile oil prices are being blamed for the slowdown.
The Survey serves as the main document for the 62nd Commission Session in Jakarta where ESCAP members endorse the Commission’s work plan and priorities for the future.