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Remittances to the Asia- Pacific region reach US$ 256 billion helping millions of families to build a better future

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Remittances to the Asia- Pacific region reach US$ 256 billion helping millions of families to build a better future

Last year, migrant workers sent US$ 256 billion to their families in the Asia-Pacific region, according to the report “RemitSCOPE – Remittance markets and opportunities – Asia and the Pacific” and a new webportal on remittances released today by the International Fund for Agricultural Development (IFAD). While remittances benefit about 320 million family members in the region, most of them in rural areas, remittance markets still need to transform to ensure that families can benefit fully from the flows.

”The promise of technological innovation in the remittance marketplace could bring about a fundamental transformation for hundreds of millions benefiting from these flows. But this transformative change has not yet happened,” says Pedro De Vasconcelos, IFAD Senior remittance expert.

In addition, De Vasconcelos pointed out that outdated regulatory barriers on both sending and receiving ends result in higher and less transparent costs for the 2 billion transactions a year – most amounting to just US$200 to US$300 each. They also make it less likely and more difficult to convert remittances into savings and investments.

According to the report, the cost of sending money to the region has decreased by only 0.67 percent since 2015, reaching 6.86 percent in 2017. This is still more than twice the 3 per cent set for high volume corridors by the international community in its Sustainable Development Goals. Lower transfer costs mean more money available to families.

Transfer costs vary significantly across the region. Rates in small Pacific island states are higher at 8.9 percent of the amount sent. In East Asia they are 8.26 percent while corridors from the Russian Federation to Central Asia are extremely low at 1.21 percent.

According to the report, cash-to-cash transactions remain by far the most common form of transfer. It is only recently that technology is beginning to move markets towards account-to-account transfers through digital operations. There are now more than 1 million payment locations through the region, reflecting a greater digitalization of transactions.

But De Vasconcelos explains further efforts are needed. “For digitalization of transfers to happen, regulators and private sector companies need to work further together to harmonize legal and regulatory frameworks between countries and support the design of products driven by customer needs,” he said.

In the region, families generally spent about 70 percent of remittances to meet basic needs, such as food, clothing, healthcare and education. The remaining 30 percent, amounting to $77 billion, could be saved and invested in asset-building or income-generating activities, helping families to build livelihoods and their future, according to De Vasconcelos.

“If you give people the opportunity to invest, they will invest, but for that, access to financial services is key, and still too many families, in particular in rural areas, cannot save, borrow and invest money through proper financial services,” said De Vasconcelos.

Although financial inclusion has increased since 2011 with half of adults in the region having a bank account (excluding high-income economies) this does not represent the reality of the substantial majority of remittance receiving families where financial exclusion remains predominant.

Remittances are particularly crucial in rural areas where poverty is the highest. Worldwide, an estimated 40 percent of the total value of remittances go to rural areas. However, in the Asia- Pacific region, remittances go disproportionally to countries with a majority of rural populations such as Nepal (81%), India (67%), Viet Nam (66%), Bangladesh (65%), Pakistan (61%) and the Philippines (56%). Remittances to rural areas are generally costlier due to expenses associated with offering access points in distant locations.

Key facts from the report:

  • Remittances to the Asia-Pacific region amounted to US$ 256 billion in 2017 representing 53 percent of flows worldwide. They have grown by 4.87 percent since 2008, with rates flattening in recent years.
  • India (US$69 billion), China (US$64 billion) and the Philippines (US$33 billion) are the three largest remittance-receiving countries in the world. Pakistan (US$20 billion), and Viet Nam (US$14 billion) are also in the top 10.
  • About 70 percent of remittances sent to Asia and the Pacific come from outside the region and in particular from the Gulf States (32 percent), North America (26 percent) and Europe (12 percent).
  • Remittances contribute to the region more than 10 times the official development assistance in the region.
  • In the region, 400 million people, one out of every 10 people, are directly affected by remittances either as a sender or as a receiver.
  • Around US$6 trillion in remittances are expected to be sent to developing countries by 2030: over half of these flows will arrive in the Asia Pacific regions, very often in small towns and villages.
  • Increasingly the majority of migrants (60 percent) now find work in the region with Hong-Kong, Japan, Malaysia, Singapore, South Korea and Thailand being major destinations for migrant workers. 
  • Remittance outflows from the region amount to US$78 billion, and 93 percent of the flows remain in the region.

Global Forum on Remittances, Investments and Development

“Remitscope” will be presented at the Global Forum on Remittances, Investments and Development – Asia Pacific to take place in Kuala Lumpur on 8-10 May. The forum will bring together more than 300 policymakers, private sector stakeholders and civil society leaders to map out the road ahead for enhanced remittances.

RemitSCOPE webportal: The report is a synthesis of the latest remittance data and analysis and remittance-market profiles on 50 individual countries available at www.remitscope.org. The ambition of this new webportal is to help decision-makers and industry transform remittances markets for cheaper, faster and safer transactions, in particular for rural areas.

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EU recovery funds for telcom networks must help competition – Vestager

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EU recovery funds for telcom networks must help competition - Vestager 1

MILAN (Reuters) – European Union countries presenting plans to speed-up rollout of high-speed telecoms network should comply with rules aimed at protecting competition, the EU Antitrust head said on Tuesday.

The comments come as member states gear up to present projects eligible for the EU’s 750-billion-euro Recovery and Resilience Facility (RRF) – a fifth of which will go on plans to boost digital capabilities.

“Member States should ensure that the measures will be implemented in accordance with all applicable rules, including State aid and public procurement rules,” EU competition chief Margrethe Vestager said in reply to a question by an EU lawmaker.

Stéphanie Yon-Courtin asked Vestager if Brussels had put in place a mechanism to ensure RRF resources would not be used to distort competition in the telecoms industry, claiming the funds should not strengthen the position of dominant operators.

“The Commission encourages member states to include in their recovery and resilience plans investments and reforms aimed… at the fast rollout of very high capacity networks”, Vestager said.

Yon-Courtin also raised concern over a plan drafted by Italy last year aimed at merging network assets of former phone monopoly Telecom Italia with state-backed rival Open Fiber in a company that could be eligible for Recovery funds.

Under that plan, still to be finalised, Rome would create a single-unified network champion to speed up fiber-optic rollout across the country while avoiding a duplication of investment.

“The Commission will continue its vigorous enforcement of the existing EU rules, including the antitrust and merger rules, where applicable, to ensure effective competition in the telecoms market to the benefit of businesses and consumers.”

Italy’s new government, led by former European Central Bank chief Mario Draghi, has not said yet if it intends to implement the unified network project of its predecessor.

One of Draghi’s main tasks will be to redraft Italy’s Recovery Fund plan.

(Reporting by Elvira Pollina and Stephen Jewkes, Editing by Nick Zieminski)

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Mining magnets: Arctic island finds green power can be a curse

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Mining magnets: Arctic island finds green power can be a curse 2

By Jacob Gronholt-Pedersen and Eric Onstad

COPENHAGEN (Reuters) – In the tenth century, Erik the Red, a Viking from Iceland, was so impressed with the vegetation on another Arctic island he had found he called it “the green land.” Today, it’s Greenland’s rocks that are attracting outsiders – superpowers riding a green revolution.

The world’s biggest island has huge resources of metals known as ‘rare earths,’ used to create compact, super-strong magnets which help power equipment such as wind turbines, electric vehicles, combat aircraft and weapons systems.

The metals are abundant globally, but processing them is difficult and dirty – so much so that the United States, which used to dominate production, surrendered that position to China about 20 years ago.

As Greenland’s ice sheet and glaciers recede, two Australia-based mining companies – one seeking funding in the United States, the other part-owned by a Chinese state-backed firm – are racing for approval to dig into what the U.S. Geological Survey (USGS) calls the world’s biggest undeveloped deposits of rare earth metals.

The contest underscores the polluting side of clean energy, as well as how hard it is for the West to break free of China in production of a vital resource. Rare earth metals have many uses, and last year China produced about 90% of them, according to Toronto-based consultancy Adamas Intelligence. As U.S.-China tensions mount, President Joe Biden’s administration said last month it will review key U.S. supplies, including rare earths, to ensure other countries cannot weaponise them against the United States.

Each Greenland mine would cost about $500 million to develop, the companies say. Both plan to send mined material away for final processing, an activity that is heavily concentrated in China. The only rare earth mine now operating in the United States – Mountain Pass in California – is partly owned by a Chinese state-backed company that currently sends material mined in the U.S. to China for processing.

The Greenland sites are less than 16 km (10 miles) from each other at the southern tip of the island, near a UNESCO World Heritage Site. Debate on them has triggered a political crisis in the capital of Nuuk, forcing a general election on the island of 56,000, due in April. Many Greenlanders, while concerned about pollution, feel mining is key to develop their fragile economy. In a 2013 poll, just over half said they want raw materials to become the country’s main source of income.

The country may ultimately back either project, both, or neither, but for those Greenlanders open to mining, the two proposals boil down to a choice between one mine that would not produce radioactive material, and another that would.

The first mine, a private initiative from an Australian geologist who has presented it to U.S. officials, would not involve nuclear material. It has won preliminary environmental approval, but it needs cash and a processing plan.

The second one has already spent more than $100 million preparing to mine, has proven processing technology through its Chinese partner, and won initial political support from Greenland’s coalition government. But its plans include exporting uranium, a nuclear fuel, and it recently ran into strong opposition, including from residents of the nearby town of Narsaq.

“As indigenous people we have lived in harmony with nature for many, many years,” said Mariane Paviasen, an opposition lawmaker who lives in the town. “We use these lands to hunt and fish.”

Greenland, a self-governing territory of the Kingdom of Denmark, has a gross domestic product of around $3 billion – similar to Andorra and Burundi. With its people living mostly on fishing and grants from Copenhagen, its government is keen to attract foreign investments.

It does not have an estimate for royalties from the first project, but expects around 1.5 billion Danish crowns ($245 million) each year from the Chinese-linked one – equivalent to roughly 15% of public spending.

Greenland’s government did not respond to requests for comment for this story. Acting Minister of Resources Vittus Qujaukitsoq said last month that if Greenlanders suddenly decide they don’t want the second project, “we’ll make a fool of investors. The credibility of the whole country is at stake.”

STRATEGIC RESOURCES

Greenland’s rare earth metals are also a chance for America and Europe to regain control of a strategic resource.

The island’s potential as a source of the raw materials needed for renewable energy technologies gained momentum in 2010, when China threatened to cut off its supply of rare earth metals to Japan, and tightened quotas to international buyers.

Prices for some of the metals have jumped in recent months, driven by surging demand for electric vehicles as well as concerns that Beijing may restrict sales.

Greenland’s position near the eastern flank of the United States makes it a sensitive location. Former U.S. President Donald Trump offered to buy the island in 2019, and he was not the first U.S. president to do so: In 1946 Harry S. Truman offered Denmark $100 million for it. A defence treaty between Denmark and the United States dating back to 1951 gives the U.S. military almost unlimited rights there, and Greenland houses the northernmost U.S. military base.

Friedbert Pflüger, a senior fellow at the Atlantic Council think tank, says the revenues generated by a major mine could give its owner leverage over policies in Greenland, and a strong Chinese presence there may pose strategic threats.

“The very presence of Chinese companies in Greenland could be used as justification for China to intervene,” said Pflüger, a former German politician and ex-deputy defence minister.

China’s foreign ministry said in a statement that such comments politicise economic and trade issues through “groundless speculation,” adding “China has always supported Chinese companies to carry out foreign economic cooperation in accordance with market principles and international rules.”

The U.S. State Department said: “We encourage our allies and partners to carefully review any investments… that could give China access to critical infrastructure in ways that compromise their security or allow China to exert undue, adverse influence over their domestic economies.”

Denmark, which handles foreign affairs and defence for Greenland, has in the past headed off Chinese involvement in infrastructure projects, which government sources say was because of security concerns. Foreign Minister Jeppe Kofod declined to comment on the security implications of China’s involvement. But he told Reuters that Copenhagen’s close ties with the United States “should not be seen as an obstacle to commercial investments in Greenland.”

China is a member of the International Atomic Energy Agency, so it can import uranium from Greenland. But since the fuel is used in nuclear weapons, that would be sensitive. Copenhagen, which has the final say, declined to comment.

TRUMP’S OFFER

Trump’s offer for Greenland aimed to help address Chinese dominance of rare earth supplies. Those involved say he was partly following up on talks between U.S. officials and a privately held company called Tanbreez Mining Greenland A/S. Tanbreez is the owner of the first Greenland site – Kringlerne, or Killavaat Alannguat in Greenlandic.

The company’s owner, Australian geologist Greg Barnes, told Reuters he had met U.S. officials weeks before Trump made the offer, and the company website shows Barnes with them and the former U.S. ambassador to Denmark on a site visit. The USGS confirmed its officials had visited the site in 2019; Washington and a representative for the former president declined to comment.

Barnes said he had put A$50 million ($38.6 million) of his own cash into the Greenland project. New York-based investment banker Christopher Messina, managing director at capital markets advisory services firm Mannahatta Partners, is trying to assemble more financing. He says Kringlerne is “such a huge deposit that what comes out of it could satisfy manufacturing demands in the U.S. for years to come.”

Whether or not that pans out, Barnes says the metals produced by his project can be processed outside China, although he has not yet decided where, and declined to say at what cost.

He said the royalties it would generate for Greenland would be roughly the same as those promised by the China-linked plan. “We’ve managed to get our capital costs down without Chinese technology,” Barnes told Reuters.

The only major plant outside China that does the complex work of separating individual rare earth elements is in Malaysia. But others – including the Mountain Pass mine in the United States – are planning or have started to build such facilities.

“For the foreseeable future, China is going to be the major player in all of these supply chains simply because it’s so far advanced and because it’s not stopping and waiting for alternatives to catch up,” said Ryan Castilloux, head of Adamas.

Tanbreez says half the rare earth metals it mines would be lanthanum and cerium – relatively plentiful metals used in telescope lenses and auto catalysts to cut emissions. About a fifth would be yttrium, which is in demand for lasers and the superconductors used in quantum computing.

Neither of the Greenland projects would be pollution-free. Both plan for mined rock to be locally crushed and separated into concentrates to send for final processing.

Tanbreez’s mining waste will be piped to a lake which, while it does not contain fish, feeds a river with a large population of Arctic char. Turbid water could impact the char, according to the company’s environmental report, which says it plans to dump some 550 tonnes a day of waste material into the lake and will dam it to prevent disruption downstream.

Tanbreez’s plan has passed the public consultations stage and received a government permit in September. Now the company is working on parliament approval.

“CRITICAL PERIOD”

Both the Greenland projects, though run from Australia, are part of a European Union initiative, the European Raw Materials Alliance, to boost Europe’s output of critical minerals and cut dependence on China for rare earth metals..

The alliance, funded by the EU, is coordinating investment and providing seed money for European mines, processing plants and industries such as magnets.

Last year, the EU kick-started 10 billion euros ($12 billion) of investment into rare earth and other green-energy-related projects, and it says its demand for rare earth metals could surge as much as tenfold by 2050. It says China currently makes up 98% of its supply.

“This is a very critical period of time,” says the Alliance’s head, Bernd Schäfer. “We in Europe are facing raw materials scarcity on many levels and also the need for action.”

The rival mountaintop site not far from Tanbreez is called Kvanefjeld, or Kuannersuit in Greenlandic. For John Mair, managing director of its owner, Greenland Minerals Ltd, it’s a world-class opportunity at the right moment.

Kvanefjeld’s main offer is neodymium, needed for wind turbines. Brussels says the EU’s demand for the metal may reach 13,000 tonnes per year by 2050, three times more than it used in 2015. Neodymium is also used in combat aircraft.

Greenland Minerals is a listed firm in which Chinese company Shenghe Resources is the biggest shareholder, with just under 10%. Shenghe, which also has a similar size stake in Mountain Pass, declined to comment for this story.

Greenland Minerals, which bought its concession from Barnes, says its planned mine will, at least initially, send minerals it produces to China for final processing. It says it plans to find a site in Europe, but has not said when.

The company has a strong hand. Back in 2011, the estimated costs for setting up Kvanefjeld were $2.3 billion. By 2019, these shrank to $505 million, the company says: Shenghe, whose biggest shareholder is a state-run Chinese mineral research institute, has helped boost efficiency.

But Greenland Minerals faces public opposition. It is one step behind Tanbreez in the environmental vetting process – and its ores include significant amounts of radioactive materials.

When Greenland Minerals embarked on public consultations this year, protests erupted. At one meeting in Narsaq on Feb. 10, locals both inside and outside the hall banged windows and played loud music to disrupt presentations.

As opposition mounted, a small pro-mining party, Demokraatit, triggered a general election by pulling out of Greenland’s coalition in early February.

Polls suggest Greenland’s main opposition party, Inuit Ataqatigiit (IA), which has a zero-tolerance policy for uranium, will become the biggest in parliament, so would be first to try to form a new coalition.

“Our aim,” IA lawmaker and Narsaq resident Paviasen told Reuters, “is to halt the (Kvanefjeld) mining project.” But IA says it has not expressed opposition to Tanbreez, which is seen as less of a threat to the environment.

Kvanefjeld would dump much more waste than Tanbreez – about 8,500 tonnes each day – into a lake on top of the mountain, the Greenland Minerals plan says.

Greenland Minerals says any increase in background radiation from its Kvanefjeld mine will be minimal. It plans to build a concrete 45-meter dam to contain the radioactive waste and to spray water on the ground to keep the dust from blowing away.

The dam will be built to international standards to “withstand even the worst imaginable seismic activity,” it said in a report submitted to Greenland’s government last year.

Even so, residents say they worry contaminated water will seep into nearby rivers or that the dam will fail entirely. They cite the collapse of a mining dam in Brazil two years ago that killed 270 people.

As the crisis has deepened, Greenland Minerals’ shares have dropped by more than 50%. If the mine goes ahead, Paviasen says, many people plan to move away.

(Corrects 10th paragraph to delete China as destination for uranium exports)

(Reporting by Jacob Gronholt-Pedersen in Copenhagen and Eric Onstad in London; Additional reporting by Ernest Scheyder in Houston, Humeyra Pamuk in Washington and Tom Daly; Edited by Sara Ledwith)

 

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‘Turning point’: Cities urged to act on lessons learned in pandemic

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'Turning point': Cities urged to act on lessons learned in pandemic 3

By Carey L. Biron

WASHINGTON (Thomson Reuters Foundation) – From better hygiene to greater awareness of inequality and recognition of “essential workers”, lessons learned during the coronavirus pandemic could be harnessed to improve city life for years to come, city leaders and others said this week.

The health crisis has gutted urban economies, emptied offices and public transport and shuttered communal spaces, but it might mark a watershed as cities seek to get back on their feet, the annual CityLab global summit heard.

“One of the big headlines coming out of the pandemic is that the things we thought were impossible before are actually possible and really absolutely necessary,” Chicago Mayor Lori Lightfoot told the three-day event, this year held virtually.

COVID-19 has laid bare “a lot of the economic fault lines around race, around class, gender and inequalities that people believed were intractable – too big to actually solve,” Lightfoot said.

In the United States, the pandemic’s economic effects have taken a far heavier toll on Black and Hispanic families, while federal data from December showed women have been disproportionately affected by job losses.

“The crises we face have made clear the inequity and injustice that persist,” U.S. Vice President Kamala Harris told the event. “We want our cities and countries to thrive, not just survive.”

There are hopeful signs, several participants said.

The pandemic creates an opening to tackle issues exposed over the past year, such as the financial struggles of low-paid workers and their lack of social protection, said Ai-jen Poo, executive director of the National Domestic Workers Alliance.

“Now we all see that some of the work that was least visible to us is actually essential – to our safety, health and our well-being,” Poo said.

She noted advances made amid the pandemic for domestic workers, most of whom are women and from minorities, including a new “bill of rights” in Philadelphia and a push in Chicago to ensure fair wages, time off and safe workplaces.

Such opportunities are not limited to rich countries, said Reuben Abraham, chief executive of the IDFC Foundation and IDFC Institute in Mumbai, suggesting the pandemic could be a “turning point” for cities in the developing world.

“Is there a way for us to embed the good behaviours that we’ve learned during COVID?” he said, noting the possibility of addressing “crowding” in cities through land use management, zoning and the provision of affordable housing.

Diseases such as cholera and typhoid have dropped substantially in Mumbai due to COVID-related hygiene practices such as hand-washing, Abraham said, while the wearing of face masks has had a significant effect on tuberculosis.

“(The pandemic) has been a disaster for all of us,” he said. “But if we do the right thing now, net-net we end up with a positive outcome.”

(Reporting by Carey L. Biron @clbtea; Editing by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

 

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