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First Seminar on Remittance Statistics


February 26 - March 2, 2007
Ljubljana, Slovenia

With support from the Center of Excellence in Finance in Ljubljana, Slovenia, the Statistics Department of the IMF ran a one week seminar (February 26 to March 2, 2007) on remittance statistics for compilers from Eastern European countries, with a focus on the Balkan region. The program of the seminar emphasized country presentations, discussion with the participants, and concluding presentations on good compilation practices. The following conclusions were drawn from the seminar:

New definitions

The proposed new definitions for remittances, as included in the draft BPM6, were generally welcome. The participants thought that "personal transfers" is a clearer and simpler concept than "workers' remittances."1 The majority also expressed an appreciation for the supplementary items although they admitted that they may be more difficult to compile. "Personal remittances" were identified as a particularly useful concept, although the estimation of "compensation less travel etc.," a required component, will be a challenge for many countries.

"Total remittances" will probably not be too difficult to compile for those countries that estimate and disseminate "personal remittances" since only social benefits, another supplementary component, are required. "Total remittances and transfers to NPISHs" were generally considered of lower relevance to the represented countries and more onerous. The majority of participants supported the removal of "migrants' transfers" from the balance of payments framework.

Main compilation problems and steps towards improvements

The participants identified the following problems to compiling better data on remittances:

  • ITRS systems suffer from high (and rising) reporting thresholds and doubtful attention to proper classification of smaller flows.
  • Money transfer organizations (such as Western Union) are often not subject to clear legal requirements for the provision of transactions data. It is also not clear whether they can adequately identify the residence of their clients.
  • Models used to estimate remittance flows are based on a variety of assumptions which can be questioned. Compilers are also in doubt about the best choice of model and have concerns about the consistency of estimation results.
  • Household surveys are costly and timely yet they tend to result in underreporting (due to recall problems or intentional underreporting by respondents). Compilers also experience problems with appropriate sampling and the design of questionnaires.

The participants further identified the following steps as part of solutions towards good compilation practices:

  • Approaches need to be country-specific.
  • Different sources and estimation methods should be used so that the results of one can be compared to another.
  • In addition, compilers need different sources for different types of flows. Many data sources will provide data only for one type of flow (e.g., bank transfers) and not for another.
  • In order to match data sources with types of flows, compilers have to be aware of the main corridors of remittance flows in their country.
  • Cooperation between national accounts and balance of payments compilers is extremely important.
  • Cooperation between partner countries should be promoted so that partner country data can be used to check own estimates.

Again, these findings support and vindicate the views taking by the Luxembourg Group and will inform the final drafting of the compilation guide.

The following country papers were presented during the seminar:

 

1They agreed, however, that the definitions of "workers' remittances" were in most cases followed only loosely in the past. In particular, the criteria that only those transfers that originated from migrants and were obtained through labour income were frequently ignored. Therefore, the new definitions could be seen as an endorsement of existing de-facto classification practice and the difference between "workers' remittances" and "personal transfers" line may be minimal.