Global Remittances: The Untold Costs Of Immigration

(Dilip Ratha’s information from World Bank)

(Pew Research estimates $150B left U.S. in 2017)

(2018: Objective 20 of UN Global Migration Compact)

(2016: Paragraph 57 of NY Declaration)

(2015: Goal 10.7 of UN Agenda 2030)

1. Important Links

CLICK HERE, for facts and figures of replacement migration.

CLICK HERE, for Dilip Ratha, Migration and Remittances Team (WB)
CLICK HERE, for a 2017 World Bank review on remittances.
http://archive.is/wip/LSGhr
CLICK HERE, for the UN Global Migration Compact text.
CLICK HERE, for the New York Declaration text.
CLICK HERE, for Agenda 2030 full text.
CLICK HERE, for World Bank, remittances in 2013.
http://archive.is/EGCr9
CLICK HERE, for World Bank, remittances in 2015.
http://archive.is/C2viK
CLICK HERE, for World Bank, remittances in 2016.
http://archive.is/8C4HU
CLICK HERE, for World Bank, remittances in 2017.
http://archive.is/JJGeT
CLICK HERE, for World Bank, remittances in 2018.
http://archive.is/0qgpZ
CLICK HERE, for Pew Research on remittances.
http://archive.is/6Get9

2. Context For This Article

Western “leaders” frequently tell people how immigration is a boon to the economy, and that it will bring all sorts of wealth in.

Not withstanding: culture clash, ethnic tensions, increased competition for jobs, added costs when social services factored in, overcrowding, demographic replacement, there is the topic of remittances. Remittances are funds that are sent across borders, typically to family members.

Mass migration enthusiasts routinely claim that people temporarily come to a nation to work, and few intend to stay. Notwithstanding the truth that many (if not most) don’t, does it make it okay if it’s true? How does it enrich a nation when huge sums of money are sent out of the country? How does draining the wealth make it more prosperous?

How big exactly is the issue of remittances? Let’s take a dive into the hard data. Yes, the topic was addressed in this review, but why not dig deeper?

3. Global Migration Compact, Objective 20, 22

OBJECTIVE 20: Promote faster, safer and cheaper transfer of remittances and foster financial inclusion of migrants
36. We commit to promote faster, safer and cheaper remittances by further developing existing conducive policy and regulatory environments that enable competition, regulation and innovation on the remittance market and by providing gender-responsive programmes and instruments that enhance the financial inclusion of migrants and their families. We further commit to optimize the transformative impact of remittances on the well-being of migrant workers and their families, as well as on sustainable development of countries, while respecting that remittances constitute an important source of private capital, and cannot be equated to other international financial flows, such as foreign direct investment, official development assistance, or other public sources of financing for development.

The UN Global Migration Compact specifically lists making remittances easier and cheaper. Why? To send money back to families. This means that instead of money circulating the host country, much of it will be sent away. Don’t worry, it will get worse.

OBJECTIVE 22: Establish mechanisms for the portability of social security entitlements and earned benefits
38. We commit to assist migrant workers at all skills levels to have access to social protection in countries of destination and profit from the portability of applicable social security entitlements and earned benefits in their countries of origin or when they decide to take up work in another country.

Social benefits such as pensions will be able to be transferred from one nation to another. This means countries like Canada will be forced to pay for pensions and such to people that have not contributed to the country over the years. Now, can these paid out social benefits be turned around and sent back to family members in the form of remittances?

How does the first world benefit from this treaty? How does importing people and forcing locals to face foreign competition help? How does driving down the wages help locals? How does sending that money overseas help the local economy?

It doesn’t. But that’s what Canada has been signed up for. All without a democratic mandate of course. Rather than stopping, or even slowing the money leaving Western nations, this agreement aims to make it easier and cheaper.

4. New York Declaration, Para 57

57. We will consider facilitating opportunities for safe, orderly and regular migration, including, as appropriate, employment creation, labour mobility at all skills levels, circular migration, family reunification and education-related opportunities. We will pay particular attention to the application of minimum labour standards for migrant workers regardless of their status, as well as to recruitment and other migration-related costs, remittance flows, transfers of skills and knowledge and the creation of employment opportunities for young people.

In addition to promoting mass migration and cheaper remittances, is the New York Declaration also trying to normalize people working illegally?

5. SDA Agenda 2030, Goal 10.7

10.7 Facilitate orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies
10.a Implement the principle of special and differential treatment for developing countries, in particular least developed countries, in accordance with World Trade Organization agreements
10.b Encourage official development assistance and financial flows, including foreign direct investment, to States where the need is greatest, in particular least developed countries, African countries, small island developing States and landlocked developing countries, in accordance with their national plans and programmes
10.c By 2030, reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent

Facilitate orderly, safe, regular and responsible migration and mobility of people? Doesn’t that sound a lot like the UN Global Migration Compact? It does, but the same language is written into Agenda 2030 as well. This was signed in September 2015 by Stephen Harper, who calls himself a conservative.

One specific goal is to have the fees for remittances reduced to less than 3%. Why? Because with the mass migration plans that our “leaders” have, replacing the population is only going to continue. So sending money away should be easier and cheaper.

And despite all the talk about these workers being “temporary”, they are not. The bulk of them are not going to leave.

6. World Bank Review: 2016 Remittances

Recently, several high-income countries that are host to many migrants are considering taxation of outward remittances, in part to raise revenue, and in part to discourage undocumented migrants. The list of countries where such taxes are being considered includes Bahrain, Kuwait, Oman, Saudi Arabia, the United States, and the United Arab Emirates. However, taxes on remittances are difficult to administer and likely to drive the flows underground.

De-risking has the potential to reverse the progress made in reducing remittance costs and adversely impacts broader development objectives. Moreover, the disappearance of regulated and legal remittance providers could divert flows toward informal channels, which in turn could increase anti-money laundering/countering financing of terrorism (AML/CFT) risks. In August 2016, the U.S. Treasury and federal banking agencies (including the Federal Reserve Board, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency) released a factsheet aimed at clarifying the AML/CFT regulations and sanctions related to correspondent banking. According to the factsheet, the agencies “do not utilize a zero tolerance philosophy.”

Despite the clarification from the U.S. Treasury and federal banking agencies, global banks have begun to exit or reduce their exposure to the retail remittance business. The banks include JPMorgan Chase, Bank of America, and Banamex USA in the United States; National Australia Bank, Westpac Group, and ANZ in Australia; Barclays and HSBC in the United Kingdom; and BBVA in Spain.

The World Bank discusses things that are being considered, such as formally taxing remittances being sent out of the country.

Also keep in mind, this is April 2017, and the New York Declaration has already been signed. The UN Global Migration Compact is to be signed in 2018, and it is expected to drive remittances much higher. Mass migration will be more easily available, so the assumption makes sense.

7. Ratha: World Bank, Remittances

Ratha comments that there is steady year after year growth in the scale of remittances being sent across borders. Of course, the growth varies on region, but in the data presented it is 6-12% consistently.

India, China, Mexico and the Philippines are listed as receiving the highest amount of remittances in 2018. Interestingly, China, India and Philippines are the top 3 sources of immigration in Canada. Mexico being on that list is probably explained by massive immigration (both legal and illegal) into the United States.

Yes, Goal 10(7)(c) of Agenda 2030 is to reduce the fees for remittances to under 3%. Seems like the people involved are only expecting it to keep increasing.

8. Remittance Estimates: World Bank

Let’s take a look at the money flowing in and out of the developed/developing world. One important disclaimer to add: although the World Bank estimates money going in and out of the 1st and 3rd World nations, it doesn’t specify to what degree they cross over, or are just transferred within.

It is fair to estimate, however, that the vast majority of the funds going to the 3rd World are transfers from the 1st. Also, it’s fair to estimate that the majority of fund the 1st World receives are from other 1st world nations.

Year Total ($B) To 1st World To 3rd World Diff.
2013 $581B $177B $404B $227B
2014 $592B $162B $430B $268B
2015 $582B $142B $440B $298B
2016 $573B $144B $429B $285B
2017 $613B $147B $466B $319B
2018 $689B $161B $528B $367B

Sources For The Chart
CLICK HERE, for World Bank, remittances in 2013.
CLICK HERE, for World Bank, remittances in 2015.
CLICK HERE, for World Bank, remittances in 2016.
CLICK HERE, for World Bank, remittances in 2017.
CLICK HERE, for World Bank, remittances in 2018.

Hundreds of billions of dollars a year flow annually to the developing world, the majority of it from the Western World. When politicians talk about the financial benefits of immigration, is this what they mean? The pouring of money out of their countries?

9. Pew Research: $150B in 2017 (USA)

Pew Research, among many other things, tracks and estimates remittances sent back. The numbers are staggering, particularly in the U.S. An estimated $150 billion was sent outside the country in the year 2017.

Just think. All that money could have funded Donald Trump’s border wall. In fact, it would fund it several times over. Let’s take a look

Rank Nation Est. ($ Billions)
1 Mexico 30.019
2 China 16.141
3 India 11.714
4 Philippines 11.099
5 Vietnam 7.735
6 Guatemala 7.725
7 Nigeria 6.191
8 El Salvador 4.611
9 Dominican Republic 4.594
10 Honduras 3.769

This table only covers the top destinations for the remittances out of the U.S., but the point should be obvious. It doesn’t really stimulate the “American” economy when so much money is being sent overseas. It disproves (to a large degree) that there is any real economic benefit to this immigration system.

Also worth noting is that large amounts of foreign “temporary” labour has the added effect of driving down wages, as more people will be competing for the same job. This creates an employer’s market. And as we all know, these aren’t really “temporary” workers. Most will try to stay.

True, this focuses on the U.S. situation, but it’s worth covering, as Canada faces the same issues that our Southern neighbours do.

10. Temporary Workers In Canada

(Source: 2018 Annual Report to Parliament)

To address the obvious: many temporary workers (and students) will remain in Canada even after their visa is up. Transitioning to permanent resident is usually an option. But even if they don’t, money is still being sent out of the country. Take a look at how many “temporary” workers we have in the TFWP and the International Mobility Program.

Temporary Foreign Worker Program

Report Year Numbers
2004 82,151
2005 90,668
2006 99,146
2007 112,658
2008 165,198
2009 192,519
2010 178,478
2011 182,276
2012 190,842
2013 213,573
2014 221,310
2015 95,086
2016 73,016
2017 78,402
2018 78,788

International Mobility Program

Report Year Numbers
2004 included
2005 included
2006 included
2007 included
2008 included
2009 included
2010 included
2011 included
2012 included
2013 included
2014 included
2015 197,924
2016 175,967
2017 207,829
2018 224,033

Also, it’s worth noting that students are allowed to work up to 20 hours/week, even while school is in session. Many (though not all) do. And Canada has certainly experienced an uptick in workers in recent years.

Report Year Numbers
2004 61,293
2005 56,536
2006 57,476
2007 61,703
2008 64,636
2009 79,509
2010 85,140
2011 96,157
2012 98,383
2013 104,810
2014 111,865
2015 127,698
2016 219,143
2017 265,111
2018 317,328

Data for the tables, is in this link. It includes archived listings for the Annual Reports to Parliament on Immigration from 2004 to 2018.

And no, not everyone coming to Canada will be sending money back. However, the temptation is there for anyone with family members left behind.

11. Remittances Directly Tied To Immigration

The World Bank is candid in making the connection between immigration and remittances. It is mainly by people who have gone to another country to world, and then send money back for family members.

While this is certainly noble, the money leaving the host nation is money that is not being spent in the host economy. It is money disappearing.

True, the person earning the money does have the right to spend it. However, how does that help the host country, when large sums of money are simply transferred out, year after year? It is a massive drain which could otherwise be spent here.

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