Why Germany is probably doing more for Syria than the UK

How do you compare the good that the UK is doing with its whopping 0.7% aid budget, against the good that Germany is doing by accepting large numbers of refugees? A smart (German) friend asked me if there are any numbers on the size of the remittances we might expect to see from Syrian refugees in Germany to Syria. Of course, remittances are far from the most important reason for accepting refugees, but they do allow for a nice easy cash sum with which we can make a comparison to aid flows.

The UK is spending somewhere between £200 million and £400 million on Syria this year. For comparison, whilst Germany is ramping up aid spending, it is still less than 0.4% of GDP overall.

But in terms of numbers of refugees, Germany expects to take 800,000 this year (compared to just a few thousand in the UK), though fewer than that have been documented so far, and not all will be Syrian. Let’s assume for a moment that the total will be 400,000 from Syria, and they will be quickly processed so that they are able to work. If every Syrian refugee in Germany was able to send home £1,000 to family and friends, that already equal Britain’s aid budget for Syria. Is £1,000 a realistic prospect? One way to think about this is to look at remittances from existing migrants in Germany (p33) to the middle east. There are currently around 67,000 migrants from Lebanon living in Germany, who send back to Lebanon almost $1 billion a year - that’s around £9,500 each, which seems almost implausibly large, but who knows, the Chinese and Vietnamese also send home large sums, and the Nigerians send home even more. In any case, it certainly seems plausible, even likely, that Syrian refugees to Germany, once permitted to work for even low German salaries, will be able to send home at least £1,000, if not more.

Migration fact of the day

"Today, approximately 7 million Indians work in six GCC countries, which is more than 50% of estimated 13 million foreign workers present in the GCC. The Indian workers in GCC remit about US$40 billion i.e. around 57% of the total remittances, i.e. US$70 billion India receives annually. Besides contributing significantly to the national forex reserves, the remittances received directly by the workers’ families help in poverty alleviation, support local business, promote entrepreneurship and generate employment."

That’s Zakir Hussain on the World Bank blog. Worth remembering this context next time you read a scandal about the poor treatment of Indian workers in the Gulf.

India fact of the day

In India, remittances are larger than the country’s earnings from IT exports.

From Dilip Ratha 

The impact of remittances on poverty in Nigeria

"the receipt of internal remittances reduces the poverty headcount of households by 11.14% and poverty gap by 9.7% while the receipt of international remittances reduces poverty headcount, poverty gap and squared poverty gap by almost 100%"

From a new working paper by Nnaemeka Chukwuone, Ebele Amaechina, Benjamin Okpukpara, Evelyn Iyoko and Sunday E. Enebeli-Uzor (via the Partnership for Economic Policy).

Brain Drain and Remittances - Yer Missing the Point!

Michael Clemens made a really great analogy on the CGD wonkcast between research on migration and research on the entry of women into the labor force:

Suppose that I was a labor economist studying the entry of women into the labor force, and most of the papers I wrote were trying to document is this a good thing.

Well, first of all, are they giving enough money to their husbands? What are their husbands really doing with it? Are they buying alcohol or not?

And second, what about the loss to their kids, and the terrible effects that fewer of them are being teachers and nurses any more. What’s happening to the kids in the schoolroom?

All concerns that are not crazy, that could be thought of as legitimate. But if there is very little research on the gains to women, the fact that women are now investment bankers and presidents, things that weren’t thinkable before they entered the labor force. If we really weren’t studying those things at all, or if they were thought to be uninteresting, what would that say about our underlying conception of the world?

The analogy to development is that I really think people in development are much too focused on developing countries rather than developing people.

ODA, Philanthropy, and Remittances

From the 2010 Index of Global Philanthropy and Remittances, via Matt Morris.

Look how many countries send more through remittances than ODA and philanthropy combined. That is FREE AID. It is costless for sending-country natives. FREE. AID.

More on Tourism and Poverty

Matt and Ranil make some good points about the distribution and poverty-incidence of tourist spending in poor countries. This I completely accept, but I am still stunned by the aggregate figures. Even a small proportion of this going into the hands of poor people is going to be significant, and something worthy of a bit more study and attention to see how the impact can be increased. Jonathan Mitchell and Caroline Ashley from ODI look at these issues in various papers (which I am yet to properly read), but they are in a minority. I have TWO degrees in development economics and have been taught loads about aid, but next to nothing about the poverty impacts of tourism.

Inspired by David Roodman here are a couple of graphs showing the approximate relative size of resource flows to poor countries, and the attention these issues get from academics interested in poverty (measured by Google Scholar hits).








Maybe just a little bit unbalanced?