The role of remittances
1 / 10

The Role of Remittances - PowerPoint PPT Presentation

  • Uploaded on

The Role of Remittances. Sokol HAVOLLI Central Bank of the Republic of Kosovo Senior Economist. SOURCES OF FINANCING FOR ECONOMIC GROWTH: Is there enough money in Kosovo?.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about ' The Role of Remittances' - evangeline-joseph

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
The role of remittances
The Role of Remittances


Central Bank of the Republic of Kosovo

Senior Economist


Is there enough money in Kosovo?

This presentation reflects the views of the author and does not necessarily express the views of the Central Bank of the Republic of Kosovo.

June, 8, 2010, Prishtina

Table of Contents:

  • Introduction and stylized facts

  • Migrants’ Remittances

  • Migrants’ Investments

  • Conclusions

Introduction and stylized facts

  • Migration started in early 1960s.

  • The surge of migration in 1990s, due to the repression and war.

  • Almost 70% of migrants during 1990-1999.

  • The number of migrants: around 20-25% of population (over 500 thousand).

Figure 1: Emigration Waves from Kosovo (% of total emigrants)

Introduction and stylized facts

  • More than 75% of Kosovo emigrants are settled in: Germany, Switzerland, Italy and Austria.

  • The remainder: in Scandinavian countries, UK, USA, France, etc.

  • The host country is an important determinant of migrants’ earning potential.

Introduction and stylized facts

  • Migrants have substantial earning potential.

  • Estimates show that the yearly earnings of migrants are over 4bn Euro.

  • Savings and remittances compose around 28% and 12% of total earnings, respectively.

  • This shows that there is a substantial potential for investments in home countries by the migrants.

Migrants’ Remittances

  • Remittances represent one of the main components of BoP.

  • Remittances are 14% of GDP.

  • During 2009 remittances reached euro 505 million (a y-o-y decrease of 5.5%).

  • Remittances decreased as a result of rising unemployment rates developed countries.

Figure 2: Remittances and FDI inflows in Kosovo

Migrants’ Remittances

  • Remittances mostly used to finance consumption.

  • Trivial part of remittances used to finance investments.

  • Small portion of remittances is also used to finance:

    • Home repairs,

    • Education,

    • Health expenses.

Figure 3: Remittances

Migrants’ Remittances

  • The main determinants of remittances are:

    • Migrants’ income,

    • Years since migration,

    • Perceived business environment,

    • Migrants’ investments in home country.

  • This shows that improvements in the business environment could influence migrants’ remittances.

Migrants’ Investment

  • An empirical investigation shows that migrants investments are also highly dependent on:

    • Migrants’ perception about the business environment,

    • Age of migrants

    • Migrant earnings

  • To date, there have been identified several important investments by migrants (i.e. participation of migrants in privatization around 15% of total).

  • However, not at a level that migrants would become an important driver for economic growth in Kosovo.


  • Migrants potential for investment and remittances should addressed.

  • Migrants investments would also be a very good signal for Foreign Direct Investors.

  • Many countries adopted policies that would attract migrant investments and remittances

  • The policies specially designed for migrants include:

    • Buying land at preferential places or areas for both, investment and housing

    • Business set-up advisory services

    • Easing the procedure of doing business

    • Tax breaks for longer periods (i.e. up to 10 years) etc.