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INFLUENCE OF THE PERSONAL TRANSFERS TO ECONOMY OF COUNTRY
DELIVERING LABOUR
M.K. Sultanova1, associate professor Sh.Sh. Sultanov2, postgraduate
1Moscow state university of humanities and economics 2Russian friendship university (Russia, Moscow)
DOI: 10.24411/2411-0450-2019-10450
Abstract. The article examines the economic aspects of migration-related cross-border cash flows. Based on the comparative characteristics of migration, the authors attempt to assess the importance of migrant remittances for the economic status of developing countries. The article weighs the economic consequences of migration from a number of Central Asian countries, pointing to the need to develop and implement a unified interstate strategy in the field of migration to achieve synergies in managing labor resources.
Keywords: migration, money transfers, cross-border transfers, remittances, external shocks.
The migration topic is universal, it is not merely systemic, but also integrative in nature. This mostly relates to external migration, the study of which is relevant both for developed countries with a demographically aging population and for less prosperous countries and territories with excess manpower. This fact leads to a stepped-up population transfer from poor countries to the more developed ones, and the flow of migrants' personal transfers predominantly moves in the opposite direction. By the world experience, this phenomenon, accompanied by a counter movement of labor and financial resources between countries with different levels of development, may as well generate acute social and economic problems. While governments have made some progress in targeting migrant flows and their remittances for development, these efforts could be more significant. This particularly concerns the implementation of the state approach to the financial aspects of migration and migrants' monetary transfers regulation [4].
Yet, the problems of migration are solved by countries mainly through their own efforts and only taking into account the solution of domestic short-term objectives. Until now, there has not been developed or implemented a unified migration inter-state strategy, whose mechanisms and instruments should be logically integrated into the migration policy of the countries and be considered through the
prism of the financial strategy basic goals. Such an approach will make it possible to identify the most advantageous areas of interstate cooperation and emphasize efforts to achieve a synergistic effect [1].
Firstly, for the migration processes causal relationship disclosure different countries use different spatiotemporal and social criteria. Secondly, there are objective difficulties associated with singling out the flows in cash and in kind, as well as with taking into account expenditures of migrants in the host country and various transactions related to the flows through informal channels, personal purchases through relatives, gifts, etc. To make up the balance of payments, countries use the above information sources on remittances by physical entities, which embrace international accounting systems based on reporting by money transfer operators, banks and other financial institutions. Yet, these sources do not include a block of issues related to determining the amount of remittances in kind, identifying the characteristics of entrepreneurial transfers, establishing the purpose of household expenditure, etc. [5].
These issues are commonly included in indirect assessments done on the basis of surveying household budgets and the data on the use of labor through mathematical models. According to the World Bank methodology, the indicator of "money transfers" is compiled from three components:
1) remittances by workers, in particular, migrant workers, having resided in the host country for more than one year, irrespective of their immigration status,
2) remuneration of workers and other payments in favor of seasonal, casual, and border workers, residing in the host country;
3) transfers related to migration being the cash equivalent of the value of property and financial assets of migrants moving across the border.
According to the World Bank annual statistics, the number of migrants in 2008 amounted to 3% of the world's population, and by 2015 it had made 4% (250 million people). That said, the total amount of money transfers by migrants reached a new record level - about $ 600 billion, of which 70% went to developing countries. According to the same source, while maintaining this trend, the number of international migrants is expected to double by 2050. The main sources of funding are migrant attractors such as the USA, Canada, Russia, Australia, Western Europe, the Asia-Pacific region, oil-producing countries of the Middle East and several others. An important aspect of migration processes is their ambiguous impact on the socioeconomic situation of countries and brewing problems that, without special research, are impossible to timely detect and evaluate [2].
Nevertheless, there are known cases of the countries coincidence of wants and achievement of harmony in their interrelationships. A classic example thereof is the New World development. The circumstances concerned at that period of time (the excess of labor resources in Europe and the need for them in America, as well as the motivation of migrants to achieve a higher standard of living) fully met the interests of the parties. The scale of transfers by migrants from developing countries is noteworthy. In terms of their volume, they surpass other sources of external financing and, even during the crisis, do not sharply decrease, in contrast to, for example, foreign direct investment or foreign aid.
For most countries, money transfers as an important source of foreign exchange earnings exceed their income from major exports, covering a significant part of imports. Thus, according to the World Bank, in 2013, in Ecuador, the volume of incoming money transfers 2.3 times exceeded the volume of foreign exchange reserves, in India it was equivalent to almost 25% of foreign exchange reserves, in Vietnam it was close to the proceeds from export of petroleum products, in the Philippines it exceeded the revenue from exports (table 1).
Table 1. Migration and cross-border cash transfers economic consequences
Country Positive effect Negative effect
Countries that provide migrant workforce Reduction of poverty and social tension in society Promotion of dependency culture, increasing eco-
Increasing consumption and stimulating aggre- Lack of inaentives to develop) domestic production
Opportunity to attract new investments Unproductive use of resources (labor, money)
Increased investment in human capital Noticeable impact of negative external shocks on
Earnings in conditions of open markets, money Instead of creating job s and conditions for decent
Expansion of banking services and mo ney trans- Devaluation of revenuee received due to lower re-
Countries that host migrant workforce Compensation for natural population decline and Exacerbation of poverty and economic disparity
Import of taxpayers and relief of the tax burden Increase in the amount of money capital exported
Removal of oegional and sectoral disparities in Slowdown in economic growth
Development of the financial system members Social tension in the society
Source: compiled by the authors bcsed on the literature review
Thus, studies of migration are in the closest possible way connected not only with economic, but also with social, political, spiritual, cultural, ideological, and other aspects of social life [5].
The most intensive migration processes occur in the former Soviet Union republics. Half of them were among the leaders as to the
volume of remittances received or the share thereof in the GDP, while Russia has entered the list of the countries being sources of such transfers. Given the negative socioeconomic consequences of the structural reforms carried out in the last 30 years, it is necessary to note the pro-cyclical dependence of these countries' economies on external factors; in partic-
ular, lower export potential of the country, dependent on the world energy prices, on foreign labor or remittances, negatively affects employment, contributes to greater inflation, and intensifies downturn [6].
For Russia, the financial and economic effects of migration are becoming more relevant as it is a country that both sends migrants to more developed countries and receives them from the CIS countries and the far abroad. According to the Bank of Russia, 2016 saw cross-border transfers from the country grow by 2.3% in annual terms and amount to almost 36 billion dollars, including more than $ 10 billion transferred to the CIS countries. From abroad, Russia received
transfers worth $ 18.4 billion, which was 1.1% less than the previous year. Of this amount, the transfers from the CIS countries amounted to $ 2.8 billion, and those from the far abroad - to $ 15.6 billion.
As is clear from Table 2, a sharp decrease in money transfers to the non-CIS countries (more than double compared to the 2008 level ($ 7.761 billion) occurred in 2015($ 3.452 billion). The share of these countries in the pre-crisis period (until 2015) accounted for more than half of all such transfers. After 2015, the CIS countries advanced in this indicator, and their share over the past two years has reached almost 70% of all transfers.
Table 2. Cross-border monetary transfers by individuals from Russia (the amount of transfers
by non-residents, USD million) [2]
Country 2008 2009 2010 2012 2014 2015 2016
Total - all countries 15 489,3 10 672, 0 12 685,0 18 327,1 19 163,0 10 508,0 11 116,2
Non-CIS countries 7761,0 5641,3 6781,5 6613,1 6633,0 3452,0 4328,8
CIS countries 7728,4 5030,6 5903,5 11 714,0 12 529,0 7056,0 6787,3
Kyrsyzstan 690,7 497,5 575,8 694,2 1195,0 838,0 1170,7
Moldova 645,3 402,4 438,6 798,1 860,0 405,0 273,7
Tajikistan 1460,7 931,0 1142,2 2548,9 3009,0 1669,0 1547,9
Uzbekistan 1725,7 1109,1 1464,9 4879,6 4893,0 2625,0 2413,4
Nevertheless, due to the crisis and the migration policy tightening, transfers to the CIS countries decreased by 43.7% in 2015 and by 3.4% in 2016. The deterioration of the situation in Russia was caused by a serious tightening of migration legislation, a drop in oil prices, a high level of the rouble devaluation, and a number of economic structural factors.
The same conclusions were also obtained by the Gallup expert group: revenues in the form of money transfers are used unproduc-tively from the point of human capital development in the countries of Central Asia. E.g., 63% of respondents said that money was mainly spent on current consumption: on education - 2%, on starting their own business -3%, on savings - 3% [3].
In theory and in practice, labor migrants' money transfers are viewed as the most important element linking the economy and migration on a global scale. They act as a large, stable, and anti-cyclical source of external financing for many poor countries, being of
great importance for reducing unemployment and poverty. However, their development role is extremely low, primarily because migration has a short-term effect and cannot be relied on to solve the strategic tasks of developing countries. Despite the fact that labor migration predominantly represents a reverse stream of labor, a certain part thereof remains in the host country. It is this part that often has a stable and growing labor, intellectual and monetary potential that is unlikely to be invested in the migrant supplying country.
Based on the foregoing, it follows that the problems of migration are complex, and, acting alone, countries will not be able to effectively solve the issues of labor or money-capital shortage to develop their potential capacity. The focus is the individual with their needs and abilities. Therefore, unless the governments of countries find a way to effectively use human capital for the sake of their reproduction, there is no question of growth, let alone socio-economic development.
1. Arefiev A.A., Sultanova Sh.Sh. Programme goal-oriented planning in the system of state regional policy // Vector Economy. - 2017. - №3 (9). - P. 16-23.
2. Bank of Russia: Official website. - URL: https: // www.cbr.ru/statistics/7prtid (reference date: 08.10.2018).
3. Fofanova K. V., Borisov D. M. Foreign labor migration: theoretical approaches to the study / / Bulletin of the University of Mordovia. - 2011. - № 3. - P. 85-90.
4. International money transfer market. - URL: https://dcenter.hse.ru/data/2018 /01/31/1114338513 (reference date: 18.08.2018).
5. Labor migration does not always pay off for the CIS migrants. - URL: http://news.gallup.com/poll/159572 (reference date: 16.06.2018).
6. Malakhov V.S., Simon M.E. Labour migration policy in Russia // International migration. -2018. - №3. - C. 61-72.
ВЛИЯНИЕ ЛИЧНЫХ ПЕРЕВОДОВ НА ЭКОНОМИКУ СТРАН-ЭМИТЕНТОВ
РАБОЧЕЙ СИЛЫ
М.К. Султанова1, доцент
2
Ш.Ш. Султанова , аспирант
1Московский государственный гуманитарно-эконмического университет Российский университет дружбы народов (Россия, г. Москва)
Аннотация. В статье исследуются экономические аспекты международных потоков, связанных с миграцией. На основе сравнительных особенностей миграции авторы отмечают важность денежных переводов мигрантов для экономического статуса развивающихся стран. Статья взвешивает экономические последствия миграции из стран Центральной Азии, указывая на потребность разработки и реализации единой межгосударственной стратегии в области миграции, чтобы достигнуть совместной эффективности в управлении трудовыми ресурсами.
Ключевые слова: миграция, денежные переводы, международные передачи, денежные переводы, внешние шоки.
