Gallup Surveys: African Households Highest Recepients of Cash & In Kind Remittances

Gallup surveys in 135 countries reveal about 3% of adults worldwide live in households that receive remittances -- either in the form of money or goods -- from someone in another country. In 35 countries, however, 10% or more report their households get this type of help. These countries are primarily concentrated in sub-Saharan Africa.

These results, based on aggregated data from surveys conducted in 2009 and 2010, capture information that complements officially recorded flows of money. Gallup's surveys ask about financial help in money or goods and are not restricted to transactions through formal channels. The data also shed additional light on remittances in countries -- particularly those in sub-Saharan Africa -- where little or no official data exist.

These findings may be conservative either because survey participants are reluctant to report getting help from someone or because the person randomly selected for the interview is unaware the household receives remittances.

Top Countries Receiving International Remittances

Adults in the Somaliland region, Comoros, and Zimbabwe are the most likely worldwide to report receiving remittances, with more than 30% of adults saying they get money or goods from someone in another country. These relatively high percentages likely reflect help from their large diasporas. In Zimbabwe, for example, where a quarter of the population lives outside the country, the Reserve Bank reports remittances increased 33% in 2010 to about $263 million.

Outside sub-Saharan Africa, the countries where the highest percentages of residents report receiving remittances are more spread out across Latin America, Central Asia, Eastern Europe, and Southeast Asia.

Where Remittances Go Varies by Country

Because Gallup's data track where recipients of remittances live, rather than where a formal remittance transaction ends, they provide insight about where remittances go.

In 12 of the 35 countries where 10% or more households report receiving help from abroad, residents in urban areas -- cities with 50,000 residents or more -- are more likely to report receiving international remittances than those in less urban areas -- towns and villages with populations less than 50,000. This is the case in Zimbabwe, Dominican Republic, the Philippines, and nine other countries.

The opposite is true in other countries such as Niger and Tajikistan, where residents of less urban areas are more likely to receive remittances than those in urban areas. In countries such as El Salvador and Kyrgyzstan, residents in urban and less urban areas are equally as likely to report receiving remittances. In many of these top-receiving countries -- but not all -- international remittances are reaching residents in less urban areas.

Bottom Line

Gallup surveys worldwide estimate how many adults live in households that receive financial assistance or goods from outside their own countries and where some of these remittances are going. The list of countries where high percentages report receiving this type of assistance is relatively small, but these remittances are likely a lifeline for millions of people. While international remittances often receive the lion's share of attention, they are only part of the story. Future articles will provide a worldwide picture of those receiving financial help from an individual within the same country.

For complete data sets or custom research from the more than 150 countries Gallup continually surveys, please contact SocialandEconomicAnalysis@gallup.com or call 202.715.3030.

Survey Methods

Results are based on face-to-face and telephone interviews conducted in 2009 and 2010 among residents aged 15 and older, in 135 countries. Data are aggregated. For most countries, sample size is 2,000 adults or greater. Four countries have sample sizes between 500 and 1,000: New Zealand, Latvia, Haiti, and Estonia. Data for Gulf Cooperation Council countries exclude non-Arab expatriates. For results based on the total sample in each country, one can say with 95% confidence that the maximum margin of sampling error ranges from ±1.0 percentage point in India to ±4.7 percentage points in Latvia and Estonia. The margin of error reflects the influence of data weighting. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

Read more here http://www.gallup.com

Africa: Investment Growth Benefiting Only Some Poor States

While foreign direct investment in least developed countries (LDCs) in Africa has risen sharply over the past decade, most of it went to resource-rich economies and had little impact on employment creation. On the eve of the fourth United Nations' conference on LDCs, UNCTAD has launched a study on the developmental effects of foreign direct investment (FDI), adopted at the 2001 LDCs conference as one of the tools to foster development in poor countries.

The study, called "FDI in LDCs: Lessons learned from the decade 2001 - 2010", shows the results are at best mixed. In terms of capital formation, figures are encouraging: despite an abrupt interruption in 2009 due to the economic crisis, FDI flows to LDCs grew at a rate of 15 percent during the last decade to reach 24 billion dollars in 2010. This is significant when compared to the 7,1 billion dollars of FDI inflows in 2001. In international comparison, LDCs' share of FDI in global flows almost doubled, going from 0,9 percent to more than two percent over the same period of time. "FDI from developing and transition economies is increasing. (Emergent economies) provide LDCs with more opportunities to attract investment," James Zhan, director of UNCTAD's division on investment and enterprise, says.

The EU is still the largest investor but transnational corporations (TNCs) from emerging economies - particularly Brazil, China, India and South Africa - are becoming increasingly important, especially to many African LDCs. Nearly half of total inflows came from these economies in 2010, compared with one quarter in 2003, Zhan points out. FDI inflows have trumped bilateral official development aid (ODA) from 2006 onwards. But there was a fall in FDI by 12 percent in 2009 and 14 percent in 2010. For UNCTAD, "this is a matter of grave concern, particularly when taking into account the global increase in FDI", Zhan remarks.

Despite the overall growth, foreign investment has not lived up to the high expectations in terms of development that were set up 10 years ago. With over 80 percent of FDI flows in value going to resource-rich economies in Africa, the effects on job creation have been weaker than expected and the transfer of technology and skills limited. "As a result, LDCs remain at the margin of the global value chain. The predominance of FDI has reinforced the commodity dependence of some LDCs and worsened their vulnerability to external shocks," Zhan warns. Also, the geographic concentration of FDI flows has increased, contributing to further divergences in economic performance.

However, the picture is not entirely negative and many LDCs have also succeeded in attracting more diverse forms of investment in value-adding activities, like telecommunications, banking, tourism, commerce, food and beverage and agriculture.

Poor physical infrastructure hinders the development of productive capacities that are key to sustainable development.

Therefore, UNCTAD proposes a plan of action that foresees the careful liberalisation of the infrastructure sector while, at the same time, establishing a regulatory framework - in particular in electricity, telecoms, transport and water.

Concretely, it suggests establishing an LDCs infrastructure development fund to support public-private partnerships and grant risk insurance to private investors.

Another idea is to boost aid for productive capacity. "The key bottleneck preventing benefits from trade is not just the rules but the capacity to produce," comments Zhan. "Therefore, we suggest creating a productive capacities fund to increase investment in vocational training, among others."

The third measure seeks to enable firms of all sizes (and not just TNCs) to capture investment opportunities in LDCs.

"Big firms may see LDCs markets as limited but others may see opportunities in sectors like solar energy. Solar energy does not require network infrastructure and the price of solar energy equipment has dropped. It is not high tech anymore but a mature energy," Zhan explains.

"We need new ideas for TNCs. How can we change business mentality? Usually companies look at GDP (gross domestic product) rates and the size of markets. But we see business opportunities even in the bottom of the pyramid. There are more and more social entrepreneurs but we need to educate them on the concept of sustainable investment."

UNCTAD wants to tap into the rising pool of "impact investors". Masataka Fujita, head of the investment trends and issues branch of UNCTAD, explains that the concept of "impact investment" appears to have emerged from a variety of sources, but mostly from the investor community itself.

"These sources and initiatives are now converging to better define the concept, and perhaps even move towards some sort of regulatory framework. The U.S. department of state has bought into the concept and is now seeking to advance it through partnerships," he explains.

The Global Impact Investing Network is a U.S.-based initiative aiming to provide a framework for "impact investment", including through the impact reporting and investment standards (IRIS) initiative, an attempt to elaborate a set of tools to measure social and environmental impacts.

"The network has a strong U.S. focus but it looks like they are seeking to expand globally view," he adds.

Read more here http://allafrica.com

UNCTAD – Foreign Direct Investment in LDCs: Lessons Learned from the Decade 2001–2010 and the Way Forward

Full Report http://www.unctad.org/en/docs/diaeia2011d1_en.pdf

World Bank Strategy for Africa

With Africa facing an unprecedented opportunity to transform itself and improve the lives of its people, the World Bank is responding with a new, ambitious strategy which could help African economies take off, the way the economies of Asia did 30 years ago. The new approach, endorsed by the Bank’s Board of Executive Directors today, marks a significant shift in the way the organization views Africa and its own role as a supporter of the continent’s progress. Laid out in three main business lines, the program was crafted over more than a year through extensive research and international consultations, especially with the people of Africa.

The plan, titled “Africa’s Future and the World Bank’s Support to it”, shifts from a more general focus on seeking economic stability and sound fundamentals to emphasize the need for attention in three key areas:

• Competitiveness and employment - The plan will assist countries to diversify their economies and generate jobs, especially for the 7-10 million young people entering the labor force each year. It will help to close the gap between infrastructure needs and investments -- currently about $48 billion annually -- and support efforts to make it easier for business to operate. In addition, the plan will focus on building the skills of workers.

• Vulnerability and resilience - Africa’s poor are directly affected by shocks -- economic, health-related, natural disasters and conflict -- which keep them in poverty. By focusing on better health care, dealing preemptively with the effects of climate change through improved irrigation and water management, and strengthening public agencies to share resources more fairly and build consensus, the plan seeks to reduce the number of shocks and limit the damage from those that do occur.

• Governance and public sector capacity - Critical services, in education, health and basic infrastructure, are too often either not delivered or delivered badly because of weak management of public funds. The Bank’s program of support aims to give citizens better information on what they should expect from their governments, as well as the capacity to report on instances when services are not delivered properly. The Bank will also work directly with governments to help them improve their systems and capacity to deliver basic services and manage accounts.

Read more here Full Report available here

Read more here World Bank Strategy for Africa Website

Cathedral in Malabo Equatorial Guinea Photo by the Kots