22 August 2013

How can money sent home by Ukrainians abroad be better utilized to develop their home country?

The Government of Canada and IOM will assist the Government of Ukraine in developing policies to effectively harness the link between migration and development.

With a CAD 400,000 total budget, the 1.5 year project, Research and Policy Dialogue Initiative on Migration and Remittances in Ukraine, will be aimed at increasing awareness among key stakeholders on the nature, use and impact of remittances entering Ukraine, describing migrants’ and their households’ overall financial behaviour, including savings and consumption, as well as assessing the overall impact of migration on the country’s socio-economic development.

According to the National Bank of Ukraine, the level of remittances transferred to Ukraine was USD 7.5 billion in 2012, which accounts for 4% of Ukraine’s GDP. According to the Institute of Demography and Social Studies, USD 4.5 billion of this amount was sent home by labour migrants. Based on the results of mathematic modeling, the Centre for Social and Economic Research (CASE) calculated that without remittances, Ukraine’s economy might have lost 7% of its potential.

“This initiative will raise Ukrainian policy-makers' awareness of remittances as an important potential source of investment that can generate sustainable economic growth in their country,” underlines Ambassador of Canada in Ukraine Troy Lulashnyk.

“Ukrainian migrants are the biggest investors in Ukraine! They send more money home than all foreign companies invest in the same period of time. With this research project, IOM wants to find ways how Ukrainian migrants, their families, local communities and the Government can benefit better from these money-transfers, also taking into account how other countries successfully link migration and development,” states IOM Ukraine’s Chief of Mission Manfred Profazi.

Research will be conducted with data generated primarily through a household survey in Ukraine and corresponding surveys of targeted samples of Ukrainian migrants in Russia, Italy and Canada. It will attempt to capture various migration and migration-related data, including the scale of Ukrainian labour migration and remittance flows to Ukraine, the socio-demographic and economic profile of Ukrainian migrants and their households, including the remitting frequency, transfer channels, cost, use and the socio-economic impact of remittances on migrant sending households and the economy in general. It will also explore migrant savings patterns and factors which affect a migrant’s decision to invest in Ukraine and will suggest policy recommendations for the respective Ukrainian authorities.

The key stakeholders for the project will be the National Bank of Ukraine, the State Statistics Service and the Ministry of Economic Development and Trade, all of which will benefit from the availability of primary data and increased understanding of the nature, use and impact of remittances entering Ukraine and also the level of migrants’ savings abroad.

The survey results will be consolidated in a research publication. In addition, a consultative process on the preliminary and final survey results will be launched in the form of an informal inter-ministerial working group, with the purpose of developing policy recommendations and feeding into the current plans of the Government to develop an action plan on mainstreaming migration into development planning.

For further information please contact IOM Ukraine Communications Officer Ms. Varvara Zhluktenko (+38 044 568 50 15, 067 447 97 92, vzhluktenko@iom.int).