There is increasing attention on international migrant remittances as a development policy and financial stability issue. Official statistics on remittances are primarily collected and reported through the balance of payments framework, but they are i ncomplete in many countries, may underreport remittance flows, and are often not comparable. Together with partner organizations, the Statistics Department is working to improve the availability and quality of data on remittances.

The International Meeting of Data Users and Compilers

In January 2005, a meeting to discuss the measurement of remittances was held in Washington D.C. in response to requests from users for improvements in these data, including G-8 Heads of State meeting at Sea Island in June 2004. The meeting was organized jointly by the Development Data Group of the World Bank and the Statistics Department of the International Monetary Fund, and was attended by both users and producers of remittance data. Participants included representatives of the United Nations, the Organisation for Economic Co-Operation and Development, the European Central Bank, the European Commission (Eurostat), and the Inter-American and Asian Development Banks. Countries represented were Canada, Germany, Hong Kong SAR, Italy, Japan, the Philippines, Poland, Spain, Turkey, Uganda, the United Kingdom, and the United States. The IMF accessed funds from the government of Japan under the Administered Account for Selected Fund Activities—Japan to support travel costs of participants from developing countries.

The meeting reemphasized that remittance flows are a major policy concern because they are very large in size, are relatively stable and provide a cushion for economic shocks, and are unique in providing direct benefits for households. Key issues for policy makers are improving financial infrastructure, understanding the impact of remittances on poverty, and obtaining more accurate measures of current account transactions to better inform macroeconomic and balance of payments assessments. For development policy the focus is on "household to household" transactions; there is less concern about worker and migrant concepts. User needs are tiered: with the balance of payments, the key priority is improving aggregate estimates of remittances, followed by estimates of flows between countries. For better understanding of remittance mechanisms and the relationships between remittances and poverty, data from household surveys are also of interest.

Presentations on various studies of remittances flows, and methods used by countries in estimating remittances for the Balance of Payments, illustrated data strengths and weaknesses and showed that there are a variety of measurement methods employed, including bank reporting systems, modeled estimation based on household surveys and labor force data, and counterpart data. Common problems include resource constraints for data collection, the difficulties of separately identifying workers remittances and compensation of employees, high reporting thresholds in reporting of commercial banks, the concept of residency, and the disaggregation of remittances by country of origin and destination.

This meeting started a process of improving remittance data involving many contributors, including groups discussing methodology and compilation issues (see below).

For more information, including papers and presentations discussed at the meeting, please refer to the following web site: (http://www.worldbank.org/data/remittances.html)

Reporting to G7

Following the Sea Island Summit in 2004, where G-7 Finance Ministers requested the World Bank to lead an international working group to produce recommendations for improving remittance statistics, the International Meeting established the group’s objectives and working practices. A core group of participants of this group, including the World Bank, IMF, and a few partner countries, in collaboration with the UN Statistics Division, took the lead in developing a more detailed work plan, and monitoring progress

In response to the request by G7, the World Bank together with the IMF prepared and submitted a progress report to the G-7 Finance Ministers in December 2005. This work was also shared with the APEC Finance Ministers who are also working to address remittance-related financial system issues.

A final report to G7 Finance Ministers is being prepared for submission in 2007. This report will outline both the improvements made in the definitions of remittances (as they will be reflected in the next edition of the Balance of Payments Manual) and advances in the guidance for compiling remittance data.

Improved methodology

The International Meeting in January 2005 agreed that the balance of payments represents the appropriate framework for improving the estimation and reporting of remittance data. A Technical Subgroup, chaired by the UN Statistics Division, discussed the measurement of remittances, and reported to the Inter-agency Task Force on Statistics of International Trade in Services. Further information on the subgroup is available at http://unstats.un.org/unsd/tradeserv/subgroup.asp.

During the Eighteenth Meeting of the IMF Committee on Balance of Payments Statistics (BOPCOM) in Washington, D.C., June 27 – July 1, 2005, the UN Statistics Division presented the outcome of deliberations in three papers ("Definition of Personal Remittances in the Balance of Payments Context" BOPCOM – 05/9; "Definition of Universe for the Framework on the Movement of Persons" BOPCOM – 05/9A; and "Institutional and Total Remittances" BOPCOM-05/9B). These suggestions provide for more precise and more inclusive of remittances in line with the needs expressed by data users during the International Technical Meeting in January 2005.

At the same meeting, the issue of migrants’ transfers was presented by the IMF (BOPCOM-05/35). The proposal to eliminate this item from future editions of the Balance of Payments Manual was accepted.

During the Nineteenth Meeting of the IMF Committee on Balance of Payments Statistics in Frankfurt, Germany, October 23-26, 2006, the UN Statistics Division presented its Outcome Paper on the Definition of Remittances (BOPCOM-06/04). Its proposals were adopted by the Committee (see the Summary of the Outcomes of the Committee's Discussion, BOPCOM-06/38). A report on progress by the Luxembourg Group in Developing compilation guidance for remittance data was also presented (BOPCOM-06/03).

Following the decisions of the Committee, a first complete draft of the forthcoming sixth edition of the Balances of Payments Manual (BPM6) has been made available on the IMF website (http://www.imf.org/external/pubs/ft/bop/2007/bopman6.htm).

Improved compilation guidance

Since expertise to improve national data collection practices largely resides within countries, the International Meeting proposed the creation of a "city group" for remittance statistics.

Eurostat, the statistical office of the European Commission, agreed to host the first meeting, thereby creating the "Luxembourg Group, " an informal working group of practitioners to consider the difficulties of collecting and compiling remittance data. The objective of the Group is to make recommendations for improvements that should lead to the production of a compilation guide for remittance statistics.

Jointly with Eurostat and the World Bank, the IMF planned the first meeting of the Group (and constituted its secretariat) which was held in June 2006 with participation from 16 countries (including two absentee contributions). The Centre for Latin American Monetary Studies (CEMLA) also reported about progress in their project of developing compilation guidance for Latin American countries (the IMF Statistics Department participates in an advisory capacity). The meeting demonstrated that varied experience with data systems for the compilation of remittance data exists, making the planned production of a compilation guide a feasible project. The Group concluded that it will move forward, continuing to collect the required material and producing an annotated outline. For further information, see Summary and Conclusions and the papers prepared for the meeting.

The next meeting was hosted by the German Bundesbank in Frankfurt on December 4-5, 2006. A draft outline of the compilation guide as well as detailed contributions to its chapters were discussed. Further details are available from the Draft Outline of Remittance Compilation Guide. The Group agreed that a first complete draft of the guide will be available for review during its planned third meeting on June 26-27, 2007. Following this meeting, the draft will be posted on this website for public review and comment.

Additional information

For additional information on remittances statistics, see Remittances in the Balance of Payments Framework. For questions relating to remittance data, please contact IMF, remittances@imf.org.