Conceptual Framework of the Study
5.2 Explanation of the Key Concepts
This thesis focuses on the macroeconomic study of migration, remittances and economic growth in South Asian countries. For this purpose, we give explanation of key issues below which help us to construct conceptual framework of the thesis.
Migrants
There are various definitions of migrants in the migration literature. International migrants may be recorded in terms of:
Country of birth
Country of citizenship (nationality)
Last country of previous residence
Duration of time spent away from birth place
Purpose of their stay (type of VISA)
The United Nations (1998) defines a migrant as ‘any person who changes his or her country of usual residence’. Tourists and business travelers are therefore not included in the international migration statistics, as their movements do not involve changing their usual place of residence. GFMD (2007) defines migrants as people who 'keep their home
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base in the origin country and return their earnings and other resources, including skills, to their families and home communities'. Statistically the migrant population is equated directly with the number of foreigners either those recorded by country of birth, or foreign born, or that fraction of the population with foreign nationality or the foreign population.
Migration
The concept of migration originates from Latin word ‘migrare’ which means to change the place of or to move out. Therefore, the characteristic of travel constitute an indisputable definition of migration. Migration is the temporary or permanent move of individuals or groups of people from one geographic location to another for various reasons ranging from better employment and income earning possibilities to persecution. Primarily, migration is known as international movement of people from one country to another one. International Organization of Migration (IOM) defines migration as "The movement of a person or a group of persons, either across an international border, or within a State. It is a population movement, encompassing any kind of movement of people, whatever its length, composition and causes; it includes migration of refugees, displaced persons, economic migrants, and persons moving for other purposes, including family reunification.” As an economic activity, migration can be identified as an export of manpower and with its human & social dimensions it is different from goods and services exports. In our study, we count mainly international migration where migration occurs across borders. GFMD (2007) portrays migration not as solution for but as an opportunity for economic development. In this case, migrants act as agent for development for their countries of origin.
Migration is portrayed as a market in which workers make the free choice to move to the area where they receive the highest income. It is an expression of the human aspiration for dignity, safety and a better future. It is a part of the social fabric, part of our very make-up as a human family (Ban-Ki-Moon, 2013). Migration has always been a strategy for individuals and their families to overcome poverty, escape conflicts, react to economic and environmental shocks and strive for a more prosperous future. It is a powerful force of social change and cultural interaction in implicated countries. So, it is important because it shapes and re-shapes societies, making them more diverse and complex. The social and political relevance of migration goes beyond numbers as it involves people, not just
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production factors but the plans, dreams, frustrations, hopes and interests of human beings.
Migration can be an important enabler for social and economic development and allows people respond to changes in social, economic and environmental conditions. It has diverse developmental effects on both home and host countries.
Remittances
The remittance data used in this study are based on the definition of workers’ remittances as used by the World Development Indicators (WDI) 2014. According to World Development Indicators 2014, personal remittances comprise personal transfers and compensation of employees. Personal transfers consist of all current transfers in cash or in kind made or received by resident households to or from nonresident households. Personal transfers thus include all current transfers between resident and nonresident individuals.
Compensation of employees refers to the income of border, seasonal, and other short-term workers who are employed in an economy where they are not resident and of residents employed by nonresident entities. Data are the sum of two items defined in the sixth edition of the IMF's Balance of Payments Manual: personal transfers and compensation of employees.
In Bangladesh, remittances sent by expatriate Bangladeshis are termed and accounted for as “wage earners remittance” without making any sub-classification. This definition does not include transfers through informal channels, such as, hand carries by friends or family members or in kind, like of jewelry, clothes, or other consumer goods, or through Hundi1 (Azad, 2003).
Economic Growth
Economic growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP. It is a positive change in the output, or production, of a country or an economy. Economic growth can be measured in nominal terms, which include inflation, or in real terms, which are adjusted for inflation. Moreover, economic
1 Hundi is an informal value transfer system based on the performance and honor of a huge network of money brokers which are primarily located in the Middle East and the Indian subcontinent.
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growth is understood as an increase in what an economy can produce if it is using all its scarce resources. An increase in an economy’s productive potential can be shown by an outward shift in the economy’s production possibility frontier (PPF).