Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Migration and Development  : some concrete orientations
Date: 2005-09-01
Institutions: European Commission
Subjects: EU migration policy, cooperation policy, developing countries, development aid, development policy, industrialised country, migration, the EU's international role

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 1.9.2005 
COM(2005) 390 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Migration and Development: Some concrete orientations 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Migration and Development: Some concrete orientations 

1. 

Introduction 

In December 2002 the Commission adopted a Communication1 that – among other issues – 
constituted  its  first  attempt  at  clarifying  the  links  between  migration  and  development,  at 
suggesting  a  number  of  key  initiatives  and  at  promoting  coherence  between  the  two  policy 
areas.  

Meanwhile, the issue of migration and development remains high on the global policy agenda. 
Countries  and  international  organisations  increasingly  perceive  migration  as  a  phenomenon 
whose  positive  impacts  in  development  terms  can  be  substantial,  provided  that  appropriate 
policies are in place. The migration and development nexus is one of the central issues being 
examined by the Global Commission on international migration (GCIM), whose report is due 
out by October 2005. The ‘High Level Dialogue on Migration and Development’ planned for 
2006 in the framework of the General Assembly of the United Nations, is further evidence of 
the  importance  of  this  debate,  in  which  developing  countries  have  a  strong  interest.  The 
European  Parliament  also  addressed  these  issues,  among  others,  in  a  hearing  held  in  March 
2005. 

In light of these circumstances, and against a background of increasingly globalised migratory 
flows,  the  Commission  herewith  intends  to  provide  further  input  to  this  debate.  It  is 
encouraged to do so by the Council2 and by The Hague programme which was endorsed by 
the European Council3. This will also help refine the concept of co-development enshrined in 
the Conclusions of the Tampere European Council (1999). 

The  Commission  believes  that  the  links  between  migration  and  development  offer  a 
significant  potential  for  furthering  development  goals,  without  constituting  a  substitute  to 
enhanced  Official  Development  Assistance  (ODA)  and  improved  policies  that  remain  as 
necessary  as  ever  to  meet  the  Millennium  Development  Goals  (MDGs)  within  the  agreed 
timeframe4. 

This  document  builds  on  the  December  2002  Communication,  which  continues  to  set  the 
framework for integrating migration issues into the EU’s external relations and development 
policies. As underlined in that Communication and confirmed by the Council Conclusions of 
May  2003,  the  integration  of  migration  aspects  should  respect  the  overall  coherence  of  EU 

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‘Integrating migration issues in the European Union’s relations with third countries’ - COM(2002) 703, 
3.12.2002. 
In Conclusions on migration and development adopted on 19 May 2003. 
The Hague Programme was adopted as an Annex to the Conclusions of the Brussels European Council 
on 5 November 2004. 
Commission  Communications  of  12  April  2005  ‘Speeding  up  progress  towards  the  Millennium 
Development Goals - The European Union’s contribution’ - COM(2005) 132 -, ‘Accelerating progress 
towards  attaining  the  Millennium  Development  Goals  –  Financing  for  Development  and  Aid 
Effectiveness’  -  COM(2005)  133  -,  and  ‘Policy  Coherence  for  Development  -  Accelerating  progress 
towards attaining the Millennium Development Goals’ - COM(2005) 134. 

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external policies and actions, and be consistent with the objectives and priorities of the Joint 
Council/Commission Statement on EC development policy5.  

Neither  does  this  Communication  cover  the  full  spectrum  of  the  2002  Communication.  It 
focuses  on  a  number  of  specific  topics  that  are  associated  primarily  with  South-North 
migration,  and  in  particular  on  possible  actions  that  could  be  carried  out  at  EU  level,  in 
partnership with developing countries of origin6. 

A number of concrete steps were already taken by the Commission, notably in the framework 
of EC assistance to third countries, to improve the impact of migration on development. Some 
of these are detailed in Annex 1. 

2. 

Further steps for improving the impact of migration on development 

With 25 Member States, the EU is an important actor on the global stage. In order to further 
develop its policies and to ensure a concrete contribution of migration policy to the objective 
of policy coherence for development, it must build on the best practices that have been or are 
being  developed  by  individual  Member  States  or  by  non-State  actors  and  should  also  learn 
from practices in other parts of the world, including in developing countries.  

Reflecting  the  main  issues  in  the  global  debate  on  migration  and  development,  and  in  line 
with  the  Council  Conclusions  of  May  2003,  the  Commission  has  identified  concrete 
orientations  for  improving  the  impact  of  migration  on  development,  with  a  focus  on  south-
north migration. For each of these areas, an annex provides a brief presentation of the issues 
at  stake  and  details  of  the  initiatives  the  Commission  is  planning  or  considering  and/or 
contains recommendations to Member States in the latter’s areas of responsibility.  

2.1. 

Remittances7 

The increase in the volume of recorded remittances from migrants over the last few years and 
the improved knowledge of these financial flows have generated a lot of attention from policy 
makers,  as  these  flows  can  potentially  help  meet  the  development  objectives  of  migrants’ 
countries of origin. Of course, despite their volume, they will not produce miracle solutions 
for development. They are private transfers and cannot substitute for ODA. Nonetheless, the 
cost  of  sending  remittances,  and  more  generally  the  conditions  under  which  they  are  sent, 
often remains unsatisfactory.  

There are therefore two main areas for policy action on remittances, namely making transfers 
cheaper,  faster  and  safer  and  enhancing  their  development  impact  in  recipient  countries. 
However, the time scale for achieving both outcomes is not the same: in the latter area there 
are  important  overlaps  and  synergies  with  policies  for  development  in  general,  in  particular 

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According  to  the  Council  Conclusions,  the  integration  of  migration  issues  into  external  relations  and 
development  policies  should  also  be  based  on  political  dialogue  and  materialise  in  the  strategic 
framework of the Regional and Country Strategy Papers. 
These  objectives  explain  the  coverage  of  this  Communication:  it  looks  primarily  at  migration  from 
developing countries to the EU. It does not cover intra-EU migration or migration between the EU and 
other developed countries. Neither does it cover migration between developing countries, even though 
some of its orientations may well be relevant in the context of such flows as well. 
For  the  purposes  of  this  Communication  we  define  remittances  broadly,  as  including  all  financial 
transfers from migrants to beneficiaries in their countries of origin. This is broader than the definition 
used for balance of payment purposes. 

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financial  market  development  and  a  better  regulatory  framework,  which  can  only  improve 
over  the  medium  to  long-term.  Improving  transfer  conditions,  on  the  other  hand,  may  be 
attainable in the shorter term.  

2.1.1.  Fostering cheap, fast and secure ways to send remittances 

The  Commission’s  planned  or  envisaged  initiatives  and  its  recommendations  for  ensuring 
cheap, fast and secure flows of remittances can be summarised as follows: 

Improved data 

Official  data  on  remittance  flows  is  patchy,  often  poor  and  does  not  reflect  alternative 
remittance channels. The Commission will launch initiatives to improve the collection of data 
to  better  understand  the  size  of  migrant  remittance  flows.  In  particular,  it  will  raise  with 
Member States the possibility of reporting on remittance data by destination.  

In  collaboration  with  institutions  such  as  the  World  Bank,  it  will  also  promote  household 
surveys which are able to capture informal remittance channels, focusing on selected bilateral 
“remittance corridors”.  

In addition, it will launch studies to gather better information on the remittance industry, its 
cost structures, possible indicators of a lack of competition and technical inefficiencies.  

Transparency 

The Commission is planning to adopt a proposal for a Directive on payment services which 
will increase competition and enhance transparency by requiring payment service providers to 
make  charges  (including  exchange  rate  conversions)  and  other  conditions  (e.g.  execution 
times) fully transparent to customers. It will also require Member States to establish a register 
of all authorised payment institutions (including money transfer operators), to be updated on a 
regular basis and publicly available for consultation, in particular online.  

The Commission also calls on Member States to encourage initiatives aimed at providing any 
additional and relevant information to migrants and  will foster  a dialogue  amongst  Member 
States with a view to identifying best practices in this field.  

It will also give consideration to supporting the setting-up of a Europe-wide website providing 
information on the cost and conditions applying to the various remittance channels, including 
conventional ones. 

Legal framework 

Even within the EU with its largely integrated financial markets, the regulation of remittance 
services varies substantially from one country to another. The Commission plans to foster the 
creation of a level playing field with harmonised licensing provisions throughout the Union. 
The forthcoming proposal for a Directive on payment services will ensure that money transfer 
operators are subject to appropriate regulatory requirements, harmonised throughout the EU 
and adapted to their specific risk profile.  

In  addition,  the  Commission  will  support  an  exchange  of  information  on  market  initiatives 
aimed at lowering the cost of remittance flows. 

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The Commission is willing to discuss with interested developing countries ways to overcome 
obstacles to  remittance flows  and to consider, where appropriate, whether specific technical 
assistance to improve their financial and economic infrastructure could be made available by 
the Community in the framework of its programmes, as well as by the European Investment 
Bank.  

Technical framework 

The Commission  will further consider the possibility of providing, within the framework of 
the  Aeneas  programme,  financial  support  to  pilot  projects  fostering  the  use  of  new 
technologies with a view to providing cheap, easily available competitive remittance services 
that open up economic opportunities in developing countries.  

Access to financial services 

The  Commission  will  raise  the  issue  of  the  access  of  migrants  to  financial  services  in  its 
contacts  with  relevant  stakeholders.  It  is  also  ready  to  consider  –  in  partnership  with  the 
countries concerned – initiatives aimed at improving access to banking and financial services 
in  developing  countries,  with  a  focus  on  the  possible  role  of  micro-finance  institutions.,  as 
well as appropriate accompanying measures (information activities, etc.).  

These initiatives and recommendations are further detailed in Annex 2. 

2.1.2  Facilitating the contribution of remittances to the development of migrants’ countries 
of origin. 

As  already  stated,  remittances  are  private  money  and  they  will  only  flow  to  productive 
investment  if  beneficiaries  are  able  to  make  informed  choices  and  if  appropriate  incentives 
exist. Developing such incentives and improving the choices in receiving countries is part of a 
more comprehensive and long-term development approach.  

The  Commission’s  planned  or  envisaged  initiatives  and  its  recommendations  for  facilitating 
the  contribution  of  remittances  to  the  development  of  migrants’  countries  of  origin  can  be 
summarised as follows: 

Financial intermediation in developing countries 

The Commission is willing to look – in partnership with the countries concerned and, where 
relevant, in cooperation with the EIB – at possibilities to enhance financial intermediation in 
developing  countries,  including  through  facilitating  partnerships  between  micro-finance 
institutions and mainstream financial institutions. 

Although  the  EC  cannot  fund  credit  lines/revolving  funds  and  guarantee  funds  for 
microfinance  operations,  including  those  involving  migrants,  the  Commission  is  ready  to 
consider partnerships in these areas with interested IFIs, including the EIB, provided that an 
upfront agreement can be reached with such institutions and under the condition that they take 
full responsibility for the operational implementation of the credit line/guarantee fund.  

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Collective remittances and co-funding schemes 

Following an evaluation of the sustainability, relevance and effectiveness of the pilot projects 
funded  under  former  budget  line  B7-667  (cf.  Annex  1),  the  Commission  will  consider  the 
possibility of providing funding in the context of the appropriate budget lines to joint projects 
by  diaspora  organisations  –  preferably  from  two  or  more  Member  States  –  and  local 
organisations so as to support local development.  

These initiatives and recommendations are further detailed in Annex 3. 

2.2.  Diasporas as actors of home country development 

Diasporas are increasingly  recognised  as an  important potential actor in the development of 
countries  of  origin,  as  already  noted  in  the  last  section  with  regard  to  remittances.  The 
Commission’s  concrete  planned  or  envisaged  initiatives  and  its  recommendations  for 
contributing  to  a  stronger  involvement  of  willing  diaspora  members  in  the  development  of 
their home countries can be summarised as follows: 

Helping developing countries map their diasporas and build links with them 

The Commission will consider supporting efforts initiated by source countries at national or 
regional  level  to  set  up  databases  where  members  of  diasporas  interested  in  contributing  to 
home  countries’  development  can  register  on  a  voluntary  basis,  and  more  generally  to 
maintain links between these countries’ and their diasporas, in coordination with other donors. 

The Commission invites those Member States that do not already do so to identify and engage 
in 
diaspora  organisations  which  could  be  suitable  and  representative 
development policy and/or possible initiators of development projects in countries of origin. 

interlocutors 

It  would  also  welcome  steps  by  the  organisations  representing  diasporas  involved  in  the 
development  of  countries  of  origin  to  set  up  a  mechanism  that  could  ensure  appropriate 
representation of their interests at EU level, in particular as far as policies of interest to these 
countries are concerned. 

Young people 

In  addition  to  already  existing  initiatives,  notably  by  local  authorities  in  the  framework  of 
twinning schemes, which should be encouraged, the Commission will assess the feasibility of 
youth  exchange  schemes  focused  in  particular  on  migrant  communities,  based  on  the 
experience gathered with existing intra-EU schemes.  

These initiatives and recommendations are further detailed in Annex 4. 

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2.3.  Circular migration and brain circulation 

Migrants’ return8, even temporary or virtual, can play a useful role in fostering the transfer of 
skills  to  the  developing  world,  together  with  other  forms  of  brain  circulation.  Facilitating 
circular migration could also play a key role in this respect. In addition, the orientations which 
the Commission will identify as a result of the debate following the publication of its Green 
Paper on economic migration will constitute an opportunity to further develop this aspect and 
increase  the  integration  of  development  concerns  into  the  Community  immigration  policy. 
The Commission’s detailed planned or envisaged initiatives and its recommendations in these 
areas can be summarised as follows: 

The potential of temporary migration 

Policies  to  maximise  the  developmental  impact  of  temporary  migration,  in  addition  to  the 
general recommendations on remittances, should focus on encouraging circular migration, by 
giving  a  priority  for  further  temporary  employment  to  workers  who  have  already  worked 
under  such  schemes  and  have  returned  at  the  end  of  their  contract,  and  also  on  offering 
appropriate rewards to participating migrants. This could for instance build on the experience 
of  some  Member  Starts  in  reimbursing  pension  contributions  at  the  end  of  the  worker’s 
contract  or  include  the  payment  by  the  country  of  residence  of  a  top  up  on  the  worker’s 
savings.  Taking  into  account  the  results  of  the  debate  on  the  Green  Paper  on  economic 
migration, the Commission will also examine the possibility of defining a general framework 
for the entrance and short-term stay within the common area of seasonal migrants.  

Facilitating return migration 

The  Commission  will  invite  Member  States  and  other  interested  stakeholders  to  share  their 
experience of the elaboration and management of assisted return programmes and of support 
of  countries  of  origin  with  the  successful  reintegration  of  return  migrants.  Within  this 
framework,  it  will  engage  in  a  discussion  with  Member  States  on  related  short-term  visa 
policy issues. 

The  Commission  will  look  at  the  possibility  of  proposing  measures  in  areas  such  as  the 
transferability of pension rights, the recognition of qualifications or mechanisms to ensure that 
researchers  or  other  professionals  who  have  worked  in  the  EU  can  keep  in  touch  with  their 
former colleagues to facilitate voluntary returns and help them reintegrate successfully. 

Temporary or virtual return 

The  Commission  proposes  to  build  upon  existing  experience  in  temporary  or  virtual  return 
programmes  and  extend  it,  where  necessary,  to  other  parts  of  the  developing  world.  It  will 
also  look  at  the  possible  support  that  could  be  provided  to  e-learning  schemes  within  the 
framework  of  Community  programmes  on  information  and  communication  technologies 
(ICT).  

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Throughout this section, the meaning of the term ‘return’ is understood to be a broad one, which is not 
limited  to  repatriations  in  the  context  of  illegal  immigration.  In  most  cases,  it  actually  refers  to  the 
process of voluntarily going back to one's country of origin. 

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In addition, initiatives will be taken within the framework of the 7th Framework Programme 
on Research and Development to facilitate networking between foreign researchers working 
in the EU – especially those working in areas of direct interest to developing countries – and 
research organisations in their countries of origin.  

The  Commission  will  also  look  at  how  to  ensure  that  the  residence  rights  in  the  EU  of 
diaspora  members  who  decide  to  engage  in  such  activities  are  not  affected  by  temporary 
returns to countries of origin.  

The  Commission  will  continue  to  make  support  available  in  future,  under  the  Aeneas 
programme, to projects by which migrants or diaspora members set up sustainable economic 
activities  in  countries  of  origin,  with  a  preference  for  projects  in  third  countries  involving 
diasporas  in  two  or  more  Member  States.  Such  projects  should  be  coherent  with  the 
development strategy of the third country concerned. 

In  addition,  it  will  further  study  the  ways  in  which  interested  entrepreneurs  from  migrant 
communities can contribute to the development of their country of origin, the obstacles they 
face in doing so and the policies that should be followed to overcome these obstacles.  

The Commission will foster the identification of best practices in areas such as secondments 
or  sabbatical  leaves,  and  the  related  social  security  aspects,  that  can  facilitate  temporary 
return,  as  part  of  the  dialogue  to  be  launched  with  Member  States  as  a  follow-up  to  this 
Communication.  

These initiatives and recommendations are further detailed in Annex 5. 

2.4.  Mitigating the adverse effect of brain drain 

The  North/South  dimension  is  only  one  example  of  the  brain  drain  issue,  which  also  has 
North/North  (it  also  affects  the  EU)  and  South/South  dimensions.  It  is  an  expression  of  the 
broader phenomenon of globalisation, and there is no uniform and simple policy response to 
this formidable challenge. Similarly, it is not an issue that affects all developing countries and 
sectors. Policy responses therefore need to be tailored to the specific needs and challenges of 
each  affected  country.  In  addition,  it  is  an  area  where  Member  States  retain  significant 
responsibilities  and  where  the  means  of  action  at  Community  level  are  therefore  relatively 
limited.  In  2002,  the  Commission  had  already  launched  the  idea  of  an  EU  code  of  conduct 
with  a  view  to  disciplining  recruitment  in  cases  where  it  would  have  significantly  negative 
repercussions for developing countries. So far, this idea has not received any follow-up from 
Member  States.  Nevertheless,  the  Commission  is  confident  that  other  initiatives  can  be 
developed to address the issue of brain drain, along the following lines: 

The evidence base 

The Commission, in collaboration with other interested organisations and donors, is willing to 
support efforts by interested developing countries to improve their knowledge of their labour 
markets, including shortages or excesses of skills at sectoral level. This would serve as a basis 
for countries to devise responses to the identified problems, in the framework of their poverty 
reduction strategies.  

As  an  example  of  possible  responses,  the  Commission  is  currently  preparing  a  separate 
Communication on 'Addressing the Crisis in Human Resources for Health', which will aim to 

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prepare a set of innovative responses to human resource crisis in developing countries, within 
the broader health context of these countries, and building upon the framework set out in this 
Communication.  

Disciplining recruitment 

The Commission encourages Member States to develop mechanisms such as codes of conduct 
to limit active recruitment in cases where it would have significantly negative repercussions 
for targeted developing countries, especially in the healthcare sector, and to coordinate their 
respective efforts in this area.  

The  Commission  will  also  strive  to  persuade  other  important  destination  countries  to  work 
towards similar arrangements. The possibilities for a global approach to recruitment policies 
should be explored and this issue be raised in the appropriate international fora, such as the 
WHO. 

Fostering institutional partnerships 

Fostering partnerships between institutions in the EU and in interested developing countries 
or region could play a role in addressing the causes of brain drain. In each case the precise 
mix of measures to be put in place would depend on a preliminary assessment of the country 
or region’s specific problems and needs. Measures could include support for the creation of 
partnerships  between  scientific  or  university  institutions  in  developing  countries  and  in  the 
EU to conduct research activities jointly. 

Other  forms  of  partnerships  between  research  institutions,  universities,  hospitals  or  other 
bodies in developing countries and EU Member States to mitigate brain drain could include 
‘shared  work  schemes’  in  which  scientists,  researchers,  doctors,  technicians  or  other 
professionals from developing countries would share their work between an institution in their 
country of origin (University, hospital, research centre, etc.) and a partner institution in an EU 
Member  State.  The  possibility  of  providing  Community  support  to  such  schemes  could  be 
assessed, notably in the framework of the 7th Framework Programme on R&D.  

Development  cooperation  as  a  source  of  employment  opportunities  for  skilled 
professionals in developing countries 

The Commission believes that donors, in the context of OECD/DAC, could usefully review 
the  operational  mechanisms  of  their  technical  assistance  programmes  with  the  specific 
objective of assessing whether stronger incentives for the employment of skilled professionals 
from developing countries by implementing bodies could be introduced.  

These initiatives and recommendations are further detailed in Annex 6. 

3. 

Follow-up to this Communication 

In  this  Communication  and  its  annexes,  the  Commission  puts  forward  several  concrete 
orientations for an EU contribution to effective progress on a number of issues related to the 
migration and development nexus. Whereas some of these suggestions are essentially ready to 
be  implemented  –  or  could  be  the  subject  of  projects  that  can  benefit  from  Community 

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funding,  for  example  in  the  framework  of  the  Aeneas  programme9,  which  will  continue  to 
exist beyond the end of the current financial perspectives as one of the thematic programmes 
for  Community  assistance  to  third  countries10  –  others  will  require  further  discussion  and 
analysis. In a number of areas, the competence for implementing these suggestions belongs to 
Member  States.  And  the  implementation  of  these  ideas  implies  an  in-depth  dialogue  with 
interested countries or regions of origin.  

In  the  Commission’s  views,  the  follow-up  to  this  Communication  should  include  the 
following elements: 

•  the  Council  should  carry  out  an  in-depth  examination  of  this  Communication  in  view  of 

coordinated implementation of the initiatives and recommendations it includes;  

•  on this basis, a multidisciplinary dialogue between the Commission and the Member States 
on  the  issues  covered  by  the  Communication  should  take  place.  It  should  focus  in 
particular on reinforcing the coordination of Member States’ policies with each other and 
with Community policies; 

•  the  dialogue  based  on  partnership  with  interested  developing  third  countries  and  their 
regional  organisations  should  also  be  enhanced,  in  the  framework  of  the  existing 
institutional framework and mechanisms. It could focus on supporting willing developing 
countries  to  assess  their  or  the  regional  migratory  situation,  the  needs  and  problems  that 
arise from it; and help identify possible tailor-made responses. Where relevant, these issues 
should  be  reflected  in  the  respective  strategy  papers.  Migration  profiles  (cf.  Annex  8) 
would be a useful tool for supporting such dialogue and cooperation; 

•  a 

reinforcement  of 

the  Commission’s  co-operation  with 

relevant 

international 

organisations; 

•  exchanges  with  other  stakeholders,  in  particular  NGOs,  social  partners  and  civil  society, 

with a special focus on those organisations representing diasporas. 

These aspects are further detailed in Annex 7. 

The  implementation  of  the  orientations  contained  in  this  Communication  will  use  the 
framework of already existing financial resources and instruments, or those that might replace 
them in the context of future financial perspectives. 

4. 

Conclusion 

This Communication has looked at some practical aspects of migration and the way they can 
benefit the development process in countries of origin, with a primary focus on South-North 
migration. Some of the initiatives or recommendations contained in this Communication can 
also  apply  to  South-South  migration.  However,  South-South  migration,  which  is  an 

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Regulation  (EC)  No  491/2004  of  the  European  Parliament  and  the  Council  of  10  March  2004 
establishing  a  programme  for  financial  and  technical  assistance  to  third  countries  in  the  areas  of 
migration and asylum (AENEAS) (OJ L 80, 18.3.2004, p. 1). Also see Annex 1. 
Communication  from  the  Commission  to  the  Council  and  the  European  Parliament  “External  actions 
through  thematic  programmes  under  the  future  financial  perspectives  2007-2013“  -  COM(2005)  324, 
3.8.2005). 

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increasingly  important  phenomenon  for  developing  countries,  has  specific  impacts  on  the 
economic,  social,  political  and  even  environmental  situation  of  these  countries.  The 
Commission  therefore  intends  to  devote  an  in-depth  reflection  to  these  issues  in  the  near 
future. Nor did this Communication look at the specific issues related to refugees. Lastly, it 
has not assessed the wider impact of EU immigration policy on developing countries, or the 
issue of integrating development concerns in EU immigration policy. Both sets of issues will 
remain part of the Commission’s policy agenda11. 

With  this  Communication,  the  Commission  hopes  to  make  a  first  contribution  to  the  global 
debate  on  the  links  between  migration  and  development,  in  particular  in  view  of  the  2006 
High  Level  Dialogue  within  the  framework  of  the  United  Nations  General  Assembly.  The 
policy  presented  in  this  Communication,  elaborated  and  implemented  in  close  partnership 
with source and transit countries and tailored to their needs, will contribute to enhancing the 
coherence of the external dimension of the EU’s immigration policy with development policy. 

11 

The Commission is already making a contribution to the debate on how to respond to refugee crises in 
the developing world with its Communication on Regional Protection Programmes - COM(2005) 388, 
adopted simultaneously with this Communication. 

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ANNEX 1: 

STEPS FORWARD AT EU LEVEL SINCE 2002 

1. 

Legislative or regulatory reforms 

Directive 2004/114/EC on the admission to the EU of third country nationals for the purposes 
of studies, pupil exchange, unremunerated training, or voluntary service, was adopted on 13 
December 20041. This Directive lays down common conditions and rules for the admission of 
third-country  students,  thus  facilitating  entry  and  residence,  without,  however,  containing  a 
right to entry. It is left to Member States’ discretion whether to apply the Directive to other 
categories  of  persons,  such  as  school  pupils,  unremunerated  trainees  and  people  doing 
voluntary service in the EU. Member States must transpose the Directive by 12 January 2007. 
Furthermore,  a  Directive  on  a  specific  procedure  for  admitting  third-country  nationals  for 
purposes  of  scientific  research2  is  expected  to  be  adopted  by  summer  2005.  This  procedure 
shall both speed up and ease the admission of researchers from third countries into the EU. 

In  addition,  the  recent  Green  Paper  on  economic  migration3  has  triggered  a  debate  on  what 
rules should apply to the admission of migrants for economic purposes. It should lead to new 
Community initiatives in this field, which the Commission will set out in an Action Plan to be 
published before the end of 2005 (cf. point 1 of Annex 5).  

2. 

Facilitating return migration 

According to the Return Action Programme, approved by the Council on 28 November 2002, 
country-specific return programmes should be designed. The aim of such programmes should 
be  to  ensure  effective  and  timely  return.  Furthermore,  the  question  of  creating  sustainable 
solutions as a means to tackle root causes for illegal immigration should be considered.  

Return, either temporary or permanent, can bring back human, financial, economic and social 
capital  to  developing  countries.  Return  programmes  should  therefore  explicitly  take  this 
dimension into account. Such was the case of the Afghanistan Return Plan, the first country-
specific return programme adopted by the Council. Moreover, thanks to the financial support 
of  the  European  Union,  over  150  highly  qualified  and  skilled  Afghans  have  returned  from 
Member  States  to  their  country  of  origin  in  order  to  support  capacity  building  for  relevant 
Ministries  and  overall  reconstruction  efforts.  The  Afghanistan  experience  demonstrated  that 
return  of  nationals  can  give  an  important  boost  to  reconstruction  and  development  efforts. 
Ensuring  a  good  matching  between  the  needs  of  the  developing  country  and  the  skills 
available can be an important factor in making returns successful. 

The experience gained from the Afghanistan return programme will be used in the planning of 
similar future country-specific return programmes. Those programmes will also benefit from 
Community  funding  within  the  framework  of  preparatory  actions  for  a  financial  instrument 
for return management in 2005/2006 and from the future European Return Fund for the period 

1 
2 
3 

Council Directive 2004/114/EC - OJ L 375, 23.12.2004, p. 12. 
Part of the package presented under COM(2004) 178, 16.3.2004. 
COM(2004) 811, 11.1.2005. 

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2008-2013  as  part  of  the  General  programme  ‘Solidarity  and  Management  of  Migration 
Flows’4. 

3. 

Provision of assistance to pilot projects in the area of migration with an impact 
on development  

Since 2001, the Community has provided financial support, within the framework of the now 
discontinued  budget  line  B7-667,  to  various  preparatory  actions  for  cooperation  with  third 
counties in the area of migration and asylum. A number of these preparatory actions seek to 
maximise the impact of migration on the development of countries of origin of migrants, by 
facilitating and enhancing the various types of contribution – financial contributions, but also 
skills or other forms of know-how – which migrants can make to these countries.  

For  instance,  several  projects  seek  to  facilitate  the  involvement  of  migrants  residing  in  EU 
Member States in development-friendly activities in their countries of origin, usually with a 
view  to  helping  them  set  up  or  participate  in  small  scale  entrepreneurial  activities  there.  In 
several of these projects migrants’ organisations in EU Member States play an important role 
in  mobilising  and  supporting  potentially  interested  migrants.  Some  projects  are  oriented 
toward the permanent return of interested migrants to their country of origin while others are 
not.  Some  of  these  projects  also  include  a  component  for  making  it  easier  for  SMEs  in 
countries of origin of migrants to reach out to markets in the EU. Other projects worth noting 
include an initiative for developing alternative, inexpensive remittance channels based on new 
technology (debit cards and use of automatic teller machines – ATMs); a project for assisting 
countries  in  the  Mediterranean  area  and  Africa  to  develop  mechanisms  for  encouraging 
development-friendly forms of labour migration; and two projects for facilitating the return of 
Afghan  nationals  to  their  country  for  contributing  to  the  reconstruction  effort.  The  vast 
majority  of  these  projects  are  still  underway,  and  it  is  therefore  too  early  to  draw  definitive 
conclusions. An independent evaluation of budget line B7-667 will be carried out; its results 
will certainly help to identify the activities that this type of instrument can usefully support.  

On the basis of these three years of preparatory actions, the Aeneas programme, for technical 
and  financial  assistance  to  third  countries  in  the  areas  of  asylum  and  migration,  was 
established  in  March  2004  (for  the  period  2004-2008  with  a  total  budget  of  €  250  million). 
This programme aims to support third countries’ efforts in better managing migratory flows in 
all  their  dimensions  (legal  and  illegal  migration,  readmission  and  reintegration  of  migrants, 
trafficking in human beings, international protection of refugees and displaced persons). It is 
intended  to  be  applicable  to  any  third  country  of  interest  for  the  Community.  In  particular, 
article  2.2  provides  indications  on  the  types  of  actions  that  could  be  undertaken  in  order  to 
foster closer linkages between migration and development: 

•  development  of  actions  aimed  at  maintaining  links  between  local  communities  in  the 
country of origin and their legal emigrants and facilitating the contribution of migrants to 
the social and economic development of communities in their country of origin, including 
facilitating the use of remittances for productive investments and development initiatives, 
as well as providing support to micro-credit programmes; 

4 

Communication  from  the  Commission  to  the  Council  and  the  European  Parliament  establishing  a 
framework programme on Solidarity and Management of Migration flows for the period 2007-2013 - 
COM(2005) 123, 6.4.2005) 

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•  facilitation  of  dialogue  and  exchange  of  information  between  the  institutions  of  the  third 

country and the nationals of that country who are considering emigrating; 

•  support for targeted socio-economic reintegration of returnees into their country of origin, 
including  training  and  capacity-building  aimed  at  facilitating  their  integration  into  the 
labour market. 

The first call for proposals (2004) was closed on 30 March 2005 and allowed the submission 
of 83 projects.  

4. 

Mainstreaming  migration  into  development  policy  and  assistance  to  third 
countries  

Since  the  2002  Communication,  significant  steps  have  been  taken  to  mainstream  migration 
issues into development policy and Community  assistance  to third  countries. In  many cases 
this can contribute to improving the impact of migration on development. 

A dialogue  on migration issues,  also  touching  sometimes on development aspects, has been 
going on with a number of third countries in the EU’s neighbourhood, in the framework of the 
relevant  bodies  and  in  a  spirit  of  partnership.  Migration  is  also  increasingly  part  of  the 
dialogue between the EU and ACP countries, both in a bilateral and regional context. In this 
context,  all  Country  Strategy  Papers,  which  constitute  the  framework  under  which 
Community  assistance  to  its  developing  country  partners  is  programmed,  were  reviewed  to 
assess  whether  there  was  a  case  for  addressing  migration  issues.  Although  the  dialogue  on 
migration  issues  has  just  started  with  some  countries,  it  has  already  contributed  to  a  better 
understanding  of  the  migration  and  development  dimension  and  allowed  a  number  of 
developing countries to highlight issues such as the mobilisation of diasporas as priorities that 
should be the focus of Community assistance in the future.  

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INITIATIVES AND RECOMMENDATIONS FOR FOSTERING CHEAP, FAST AND SECURE 
WAYS TO TRANSFER REMITTANCES 

ANNEX 2: 

Over the past few years, the cost of sending remittances over a number of corridors5 has come 
down significantly in some parts of the world. For example, in Latin America, according to 
the Inter-American Development Bank (IDB), average costs have almost halved from around 
15 % at the end the 1990s to 7.9 % by February 2004. Still, such rates cannot be called cheap. 
In  addition,  progress  is  far  from  uniform  and  the  high  cost  of  remitting  –  especially  if 
compared with the cost for intra-Euro zone transfers – certainly remains an obstacle to higher 
remittance flows through formal channels. The efforts the EU will make in this area are in line 
with  the  commitments  taken  by  the  G8  at  the  Sea  Island  Summit  in  June  2004  to  ensure  a 
decrease in the cost of remittances6.  

The  Commission  believes  that  action  is  needed  in  the  five  areas  that  are  addressed  in  this 
annex7.  Moreover,  as  financial  institutions  are  key  actors  in  the  area  of  remittances,  the 
Commission  will  propose  to  the  European  organisations  representing  this  sector  to  discuss 
various  aspects  relating  to  remittances,  in  the  context  of  the  on-going  dialogue  within  the 
framework of the European Payments Council. 

1. 

Improving available data on remittance flows and services 

Policy  on  remittances  needs  to  be  based  on  accurate  data.  Unfortunately,  this  is  at  present 
rarely available. Remittance flows through informal channels8 are almost never covered, and 
there  are  indications  that  formal  flows  are  often  grossly  under-estimated.  In  addition,  most 
Member  States  do  not  provide  a  breakdown  of  remittance  flows  by  receiving  country. 
Improved data would need to cover informal flows, to address the underestimation of formal 
flows9,  and  to  provide  a  detailed  breakdown  of  bilateral  flows.  Finally,  the  development  of 
specific  studies,  such  as  longitudinal  surveys,  and  ensuring  more  comparability  of 
international  statistics  would  allow  the  development  of  policies  that  are  better  targeted  and 
adapted to the situation. More information is also needed about the ways in which money is 
being  transferred  and  the  reasons  for  doing  so.  Household  surveys  could  be  an  important 
instrument  in  providing  that  knowledge10.  Initiatives  in  this  area  are  already  being  prepared 

5 

6 

7 

8 

9 
10 

The  notion  of  ‘corridor’  refers  to  pairs  of  countries  –  a  country  that  is  the  source  of  remittances  and 
another country which receives them. 
‘Reduce  the  cost  of  remittance  services  through  the  promotion  of  competition,  the  use  of  innovative 
payment  instruments,  and  by  enhancing  access  to  formal  financial  systems  in  sending  and  receiving 
countries. In some cases, remittance costs between sending and receiving countries have been reduced 
by up to 50 % or more. G8 countries believe that similar reductions of high costs could be realised in 
the case of other countries’. 
In development terms it would make sense to apply all improvements in the transfer of remittances to 
all other retail financial flows from developed countries to developing countries, not only to those flows 
involving migrants. 
i.e.  those  channels  whose  flows  are  not  officially  recorded,  either  because  the  money  is  transferred 
physically  by  the  migrant  him/herself  or  by  another  person  he  or  she  has  entrusted  with  this  task,  or 
because  they  are  performed  by  money  transfer  operators  that  are  not  officially  registered.  On  certain 
corridors, it is estimated that informal flows exceed formal ones in volume. 
In particular by including transfers by workers residing in a country for less than one year. 
In compliance with relevant EC legislation on personal data protection in cases where such data would 
need to be included in the surveys.  

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with  regard  to  remittance  flows  from  the  EU  to  Latin  America,  as  a  follow-up  to  the 
Conclusions of the Guadalajara Summit. Work in this area should be co-ordinated with other 
institutions and international organisations active in this field11. In addition, it would also be 
useful  to  know  more  about  the  various  types  of  use  of  remittances  in  countries  of  origin 
(consumption, investment or savings, and, in the latter case, the type of savings vehicles) and 
the respective share of the various economic activities for which remittances are used, in the 
case of investment. 

Collecting and publishing better data has at least two functions: firstly, it helps policy-makers 
to take informed decisions; secondly, data on flows in particular remittance corridors can act 
as a wake-up call to the financial industry that there are business opportunities out there. The 
experiences of Turkish banks in Germany, Greek banks in countries of Greek emigration or, 
more  recently,  Spanish  banks  vis-à-vis  the  Latin  American  communities  residing  in  Spain 
show that banking institutions, once aware of the potential market represented by remittances, 
can become quite competitive actors in these markets, thus fostering competition. 

In the framework of the Inter-Agency Task Force on International Trade in services, the UN-
Technical  Subgroup  on  Movement  of  Natural  Persons  will  carry  out  work  on  developing  a 
new definition of remittances within the balance of payments framework, and on developing a 
statistical  framework  for  the  measurement  of  the  economic  impact  of  the  movement  of 
persons.  The  Technical  Subgroup  recommends  changing  the  definition  of  “workers´ 
remittances”  to  a  broader  concept  of  personal  transfers,  which  includes  all  household  to 
household transfers.  

Official  data  on  remittance  flows  is  patchy,  often  of  mediocre  quality  and  does  not  reflect 
alternative  remittance  channels.  The  Commission  will  launch  initiatives  to  improve  the 
collection  of  data  to  better  understand  the  size  of  migrant  remittance  flows.  In  particular,  it 
will raise with Member States the possibility of reporting on remittance data by destination.  

In  collaboration  with  institutions  such  as  the  World  Bank,  it  will  also  promote  household 
surveys which are able to capture informal remittance channels, focusing on selected bilateral 
“remittance corridors”.  

In addition, it will launch studies to gather better information on the remittance industry, its 
cost structures, possible indicators of a lack of competition and technical inefficiencies.  

Such studies could shed light on possible ways to improve competition and realise efficiency 
gains.  They  should  include  the  identification  of  main  channels  by  destination  (different 
channels  are  relevant  for  different  countries  of  origin),  as  well  as  of  the  cost  of  a  typical 
remittance  through  the  different  relevant  channels  and  analyses  of  the  cost  structure  of 
remittance providers and their margins. 

11 

As  far  as  the  Mediterranean  region  is  concerned,  the  EIB-managed  FEMIP  (Facility  for  Euro-
Mediterranean  Investment  and  Partnership)  has  recently  launched  a  study  on  workers’  remittances  in 
eight  Mediterranean  Partner  Countries.  Its  purpose  is  to  identify  the  constraints  of  sending  funds  to 
Mediterranean  countries,  to  provide  innovative  solutions  to  facilitate  these  flows  and  mobilize 
additional savings, as well as to promote their impact on economic development in recipient countries.  

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2. 

Increasing transparency 

A  relatively  simple  but  potentially  forceful  measure  to  increase  competition  is  to  make  the 
information on the costs and other conditions – including the exchange rates used – that apply 
to each remittance channel more widely available to the public. Increasing the transparency of 
the  remittance  market  will  enable  potential  remitters  to  make  better  informed  choices.  A 
number of Member States have taken active steps to improve transparency in the remittance 
market12. 

The Commission is planning to adopt a proposal for a Directive on payment services which 
will increase competition and enhance transparency by requiring payment service providers to 
make  charges  (including  exchange  rate  conversions)  and  other  conditions  (e.g.  execution 
times) fully transparent to customers. It will also require Member States to establish a register 
of all authorised payment institutions (including money transfer operators), to be updated on a 
regular basis and publicly available for consultation, in particular online.  

The Commission also calls on Member States to encourage initiatives aimed at providing any 
additional and relevant information to migrants and  will foster  a dialogue  amongst  Member 
States with a view to identifying best practices in this field.  

It will also give consideration to supporting the setting-up of a Europe-wide website providing 
information on the cost and conditions applying to the various remittance channels, including 
conventional ones. 

Such  initiatives  will  make  it  easier  for  potential  clients  to  compare  the  various  options 
available. In addition to benefiting migrants,  they  would allow  comparisons across Member 
States and help reveal limited competition or other market inefficiencies. 

The  Commission  also  supports  joint  efforts  by  the  Committee  on  Payment  and  Settlement 
Systems  of  the  Bank  for  International  Settlements  (BIS)  and  the  World  Bank  to  define 
remittance principles. Applied by money transfer operators on a voluntary basis, they would 
make  it  easier  for  remittance  senders  to  understand  what  service  they  can  expect  for  their 
money. 

Pre-departure  information  initiatives  in  countries  of  origin,  as  provided  for  example  in  the 
Philippines, could also contribute to more transparency. 

3. 

Improving the legal framework for remittances  

*  On  the  EU  side,  Article  56  of  the  EC  Treaty  already  facilitates  remittance  flows  by 
providing for freedom of capital movements between the EU and third countries. However, it 
is also necessary to ensure that no disproportionate requirement is placed on money transfer 
operators  (MTOs).  Whereas  some  countries  only  impose  light  registration  requirements  on 
MTOs, others operate licensing systems and some even impose the same requirements as on 
banking institutions, a step that does not appear justified in terms of prudential risk, since the 
money transfer business typically does not involve any lending. A lighter hand in regulating 
would  allow  a  number  of  presently  informal  MTOs  to  be  appropriately  regulated,  thus 

12 

For example the United Kingdom has sponsored a remittance product survey covering six countries of 
origin of migrants (‘Sending money home? A survey of remittances products and services in the United 
Kingdom’). Some information on this initiative is available on www.sendmoneyhome.org. 

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retaining  their  advantages  in  terms  of  cost,  speed  and  reliability  while  addressing  public 
authorities’ legitimate security concerns. This would help foster competition on the market for 
formal remittance services. 

Even within the EU with its largely integrated financial markets, the regulation of remittance 
services varies substantially from one country to another. The Commission plans to foster the 
creation of a level playing field with harmonised licensing provisions throughout the Union. 
The forthcoming proposal for a Directive on payment services will ensure that money transfer 
operators are subject to appropriate regulatory requirements, harmonised throughout the EU 
and adapted to their specific risk profile.  

Whilst ensuring that MTOs are subject to anti-money laundering/terrorist financing measures, 
this regulatory regime will establish a level playing field for the provision of payment services 
in the internal market and thus foster competition. The Commission has extensively consulted 
all stakeholders in preparing the draft Directive. 

In  addition,  the  Commission  will  support  an  exchange  of  information  on  market  initiatives 
aimed at lowering the cost of remittance flows. 

More  generally,  other  steps  that  increase  competition  and  encourage  new  entrants  into  the 
remittance  market  are  highly  beneficial.  For  example,  exclusive  agreements  that  tie  up 
existing large-scale retail networks – such as national post offices – to a given MTO should be 
reconsidered, as they unduly limit competition. 

* On the side of recipient countries, a number of regulations can act in a direct or indirect way 
as  obstacles  to  remittance  flows.  For  example  taxes  on  remittance  flows  will  reduce  the 
amount of formal remittances; restrictions on capital movements or dual exchange rates will 
also  favour  informal  channels  of  remittance  transfer;  and  insufficient  competition  in  the 
banking sector can be a contributory factor in making remittance payments expensive. 

The Commission is willing to discuss with interested developing countries ways to overcome 
obstacles to  remittance flows  and to consider, where appropriate, whether specific technical 
assistance to improve their financial and economic infrastructure could be made available by 
the Community in the framework of its programmes, as well as by the European Investment 
Bank.  

The  Commission  will  also  continue  to  coordinate  efforts  with  those  Member  States  that 
provide similar types of assistance to developing countries. 

4. 

Improving the technical framework for remittances  

A  first  issue  in  this  respect  is  the  potential  for  creating  links  between  EU  payment  systems 
and those of developing countries which are the source of significant migration flows to the 
EU.  This  could  draw  on  the  experience  acquired  by  the  EU  in  setting-up  a  Pan  European 
Automated  Clearing  House  for  retail  payments  for  the  introduction  of  the  euro.  There  is 
already  a  precedent  in  this  area,  with  the  establishment  of  an  automated  clearing  house 
between the United States and Mexico. Some EU Member States are currently looking at the 
feasibility of similar schemes, and the Commission wishes to take part in such efforts. 

The proposal for a Directive on payment services (see above), by supporting the creation of 
EU-wide infrastructure for the provision of payment services, will in itself make it easier to 

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reach the critical mass that might make it profitable to link EU payment systems with those of 
third countries. 

In  addition,  a  number  of  schemes  involving  the  use  of  state  of  the  art  technology13  are 
currently being developed. The Commission believes that such systems can offer a potential, 
even  though  illiteracy  and  technological  shortfalls  could  limit  their  relevance  in  some 
developing countries. 

The  Commission  will,  in  the  light  of  market  developments  and  with  the  involvement  of 
private  operators,  further  consider  the  possibility  of  providing,  within  the  framework  of  the 
Aeneas programme, financial support to pilot projects fostering the use of new technologies 
with a view to providing cheap, easily available competitive remittance services that open up 
economic opportunities in developing countries.  

5. 

Improving access to banking/financial services 

In  sending  countries,  apart  from  transparency  (see  point  2.  above),  the  main  issue  is 
facilitating  the  access  of  migrants  to  banking  services.  Better  information  about  remittance 
flows  may  increase  financial  institutions’  interest  for  migrants  as  potentially  interesting 
customers. Several Spanish banks have taken significant steps to attract migrants, for example 
by opening off-hours banking facilities and hiring staff from the main migrant communities. 
But  public  authorities  can  have  a  role  to  play  in  facilitating  this  change  of  mindset,  as  was 
indeed the case in Spain. Measures to improve the financial inclusion of migrants should be 
inspired by good practice in the EU and beyond. 

In  recipient  countries,  insufficient  access  of  the  rural  population  and  the  poor  to  banking 
services often remains a critical issue, as banking networks rarely extend beyond large cities. 
Solutions include partnerships between ‘mainstream’ banking institutions and those networks 
that are present in rural areas, i.e. micro-finance institutions or post offices. Already effective 
or  planned  partnerships  such  as  those  between  Spanish  financial  institutions  and  Latin 
American micro-finance institutions or between French and African institutions seem to point 
to the way forward. At the same time, recipient countries should look at regulatory obstacles 
that  often  make  it  difficult  or  impossible  for  micro-finance  institutions  to  team  up  with 
mainstream institutions, including those that prevent the emergence of real competition in the 
banking sector.  

The  Commission  will  raise  the  issue  of  the  access  of  migrants  to  financial  services  in  its 
contacts  with  relevant  stakeholders.  It  is  also  ready  to  consider  –  in  partnership  with  the 
countries concerned – initiatives aimed at improving access to banking and financial services 
in  developing  countries,  with  a  focus  on  the  possible  role  of  micro-finance  institutions.,  as 
well as appropriate accompanying measures (information activities, etc.).  

13 

In  particular  money  transfers  involving  credit  or  debit  cards  and  allowing  unbanked  beneficiaries  to 
withdraw  the  transferred  money  from  ATMs.  Other  novel  systems  are  based  on  mobile  phone 
technology. 

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INITIATIVES AND RECOMMENDATIONS FOR FACILITATING THE CONTRIBUTION OF 
REMITTANCES TO THE DEVELOPMENT OF MIGRANTS’ COUNTRIES OF ORIGIN 

ANNEX 3: 

The  discussion  of  this  issue  raises  an  important  caveat.  Whereas  remittances  do  constitute 
very  important  financial  flows  to  developing  countries,  they  have  a  specific  characteristic 
when compared with other types of flow: they are private money.  

The  Commission  believes  that  respecting  the  private  nature  of  remittances  must  be  the 
overarching  principle  underlying  Community  policy  in  this  area.  The  objective  in  this  area 
should  therefore  be  to  open  opportunities  for  migrants  who  wish  to  use  part  of  their 
remittances for any form of investment supporting development. 

In addition, remittance flows are influenced by a number of factors on which policy makers 
have  little  influence.  For  example,  the  composition  of  migration  will  matter  as  much  as  its 
size  for  determining  the  size  of  remittance  flows.  Migrants  remit  money  to  those  who  are 
close  to  them,  usually  members  of  their  family  who  stayed  behind.  This  is  why  family 
reunion, for instance, tends to lead to a reduction in the volume of remittances from the EU to 
Turkey  and  North  Africa.  Looking  ahead,  the  retirement  of  the  first  generation  of  migrants 
will  also  affect  remittance  flows  to  the  Mediterranean  region.  Another  example  of  the 
importance  of  the  composition  of  migration  flows  relates  to  the  fact  that  highly  skilled 
migrants  tend  to  send  a  smaller  proportion  of  their  income  home.  Therefore,  selective 
immigration schemes can also affect remittance flows.  

This being said, there are a number of ways in which a policy mix, which should be country 
specific, can support such objectives. In this respect, specific attention needs to be paid to so-
called  collective  remittances,  i.e.  the  transfers  that  migrants  make  collectively  for 
philanthropic  purposes  via  their  organisations  in  the  country  of  residence,  also  known  as 
Hometown Associations (HTAs). 

The Commission believes that action can be considered in the following four areas: 

1. 

Improving the investment climate and fostering good governance  

There  is  significant  evidence  that  no  incentive  system  will  be  as  effective  in  persuading 
migrants  –  as  indeed  any  other  investor  –  to  invest  part  of  their  remittances  in  business 
activities  in  their  home  country  as  a  sound  investment  climate.  This  entails  simplified 
business procedures, a transparent bureaucracy, a functioning judicial system that guarantees 
the rule of law and property rights, absence of corruption as well as a sound macro-economic 
framework and good quality infrastructure. All these factors also impact on brain drain, return 
and retention, three issues that are discussed in other parts of this Communication. Promoting 
these  and  other  aspects  of  good  governance  is  above  all  a  responsibility  for  developing 
countries  themselves,  but  donors  can  and  should  play  a  supportive  role.  The  approach  the 
Commission  proposes  to  follow  in  these  areas  will  be  further  explored  in  the  forthcoming 
review of the EU Development Policy Statement14. 

14 

Proposal  for  a  joint  Council/EP/Commission  statement  on  EU  Development  Policy,  the  ‘Brussels 
Consensus’, July 2005. 

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2. 

Extending financial intermediation in developing countries15 

Not all migrants are willing and/or able to become entrepreneurs – especially where, as they 
remain  in  their  country  of  residence,  they  would  have  to  manage  their  investment  from  a 
distance. However, the Commission believes that there are ways to make it easier for migrants 
to contribute to the development of their country of origin, while reaping fair rewards for their 
hard-earned savings. The establishment of an efficient system of financial intermediation can 
play a key role in encouraging migrants or their relatives back home to entrust their savings to 
financial institutions. This could lead to a better allocation of resources promoting productive 
investment  and  therefore  result  in  welfare  gains  for  the  country  or  region  of  origin.  In  a 
number  of  developing  countries,  especially  in  Africa,  there  is  reportedly  a  ‘financing  gap’ 
between micro-finance loans on the one hand (typically up to a few hundred euros) and loans 
to large SMEs (from a few tens of thousand euros upward), with small enterprises finding it 
difficult to obtain loans in the region of a few thousand euros. Guarantee mechanisms could 
play  a  useful  role  in  this  respect.  In  addition,  there  are  in  some  cases  rules  that  make  it 
difficult  for  micro-finance  institutions  to  offer  a  full  range  of  financial  services  to  poor  or 
rural people. Addressing them would make it easier to ‘bank the unbanked’ and therefore help 
maximise the potential of remittances (for example by enabling recipients to have access to 
savings instruments). In addition to the assistance already being provided to some developing 
countries in developing their financial service sectors, the Commission could consider further 
assistance  in  this  area.  Community  assistance  in  making  micro-finance  institutions  more 
active  in  the  area  of  remittances  will  need  to  take  into  account  the  ongoing  work  by  other 
donors. 

The Commission is willing to look – in partnership with the countries concerned and, where 
relevant, in cooperation with the EIB – at possibilities to enhance financial intermediation in 
developing  countries,  including  through  facilitating  partnerships  between  micro-finance 
institutions and mainstream financial institutions. 

Although  the  EC  cannot  fund  credit  lines/revolving  funds  and  guarantee  funds  for 
microfinance  operations,  including  those  involving  migrants,  the  Commission  is  ready  to 
consider partnerships in these areas with interested IFIs, including the EIB, provided that an 
upfront agreement can be reached with such institutions and under the condition that they take 
full responsibility for the operational implementation of the credit line/guarantee fund.  

3. 

Collective remittances and co-funding schemes 

Hometown  Associations  (HTAs)  can  play  an  important  role  in  helping  allocate  part  of  the 
savings of individual migrants towards initiatives that either are directed towards productive 
activities  (industry,  agriculture)  or  at  least  play  a  role  in  improving  the  living  conditions  of 
people  in  communities  of  origin,  for  example  via  the  financing  of  small-scale  local 
infrastructure (water sanitation, health infrastructure, etc.). There is now significant evidence 
that,  in  order  for  such  efforts  to  bear  fruit,  migrants’  organisations  and  the  relevant  local 
communities need to be at the origin of the projects. Support from local authorities and other 
donors  can  however  be  an  asset.  Co-funding  to  top  up  the  efforts  of  migrants  is  sometimes 
provided  by  public  authorities,  either  from  the  receiving  country16  or  from  the  country  of 

15 
16 

This is closely linked to the issues addressed under point 5 of Annex 2. 
This type of scheme is an important component of the co-development policy that has been devised by 
France. In particular, programmes to support initiatives by migrants from Senegal and Mali residing in 

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origin  (this  is  the  case  of  the  ‘tres  por  uno’  scheme,  initiated  by  the  State  of  Zacatecas  and 
later emulated in other Mexican States).  

Following an evaluation of the sustainability, relevance and effectiveness of the pilot projects 
funded  under  former  budget  line  B7-667  (cf.  Annex  1),  the  Commission  will  consider  the 
possibility of providing funding in the context of the appropriate budget lines to joint projects 
by  diaspora  organisations  –  preferably  from  two  or  more  Member  States  –  and  local 
organisations interested in supporting local development.  

It  also  invites  Member  States  which  run  similar  schemes  or  consider  doing  so  to  exchange 
experiences and best practices. 

4. 

Incentive-based policies 

Many countries of origin have developed special incentive schemes to encourage migrants to 
invest part of the funds they remit in savings vehicles that are used for funding development-
friendly infrastructure or productive activities, such as Government bonds or savings accounts 
offering privileged interest-rates. The record of such incentive schemes is somewhat mixed, 
however,  and  the  Commission  does  not  wish  to  recommend  this  sort  of  action,  given  the 
variety of possible schemes. Nonetheless it is clear that the governments of countries of origin 
of migrants should refrain from creating or maintaining disincentives to such investments (i.e. 
treating them less favourably than purely domestic investments). 

France in their country of origin are underway. In Italy and Spain similar schemes – often initiated at 
regional  or  city  level  (Italy)  or  at  the  level  of  regional  communities  (Spain)  –  have  been  launched  to 
support  projects  in  various  countries.  In  the Netherlands, migrants’  projects are  supported  via  the  so-
called ‘Front Office’ facility, which is managed on behalf of the Dutch government by five co-financing 
NGOs. The Community has also provided support to such projects in the framework of budget line B7-
667 (cf. Annex 1). 

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INITIATIVES AND RECOMMENDATIONS FOR FACILITATING THE INVOLVEMENT OF 
DIASPORAS IN HOME COUNTRY DEVELOPMENT 

ANNEX 4: 

As  part  of  transnational  communities  linking  countries  of  origin  and  countries  of  residence, 
diasporas17 can make an important contribution to the development of their home countries. 
The various ways in which their possible forms of contribution – remittances, skill or know-
how transfers, etc. – can be facilitated are addressed in the various sections of Chapter 2 and 
the relevant annexes. This annex, however, looks at how – if appropriate – public authorities 
can  encourage  diaspora  members  to  become  more  involved  in  the  development  of  their 
country or region of origin. 

Of  course,  it  is  up  to  each  diaspora  member  to  decide  whether,  to  what  extent  and  in  what 
form  (s)he  wishes  to  contribute  to  the  development  of  his/her  country  of  origin.  Public 
policies in this area can only provide incentives, facilitate and be responsive to people’s own 
initiatives.  

The  Commission  believes  that  action  in  this  area  should  concentrate  on  the  following  three 
sets of issues: 

1. 

Helping developing countries map their diasporas and build links with them 

A key difficulty that sending and receiving country governments are often faced with in terms 
of dealing with the diaspora is precisely knowing the diaspora. There is therefore a case for a 
policy  to  support  the  creation  of  databases  of  the  skills  available  in  a  given  country’s  or 
region’s diaspora abroad, where interested members can register. A number of projects along 
these lines have already been launched – for example a database where skilled members of the 
Senegalese  diaspora  abroad  can  register  their  interest  in  contributing  to  the  country’s 
development and provide details of their skills – and such initiatives could be used as sources 
of inspiration by other countries. Another example is the support provided by Italy to Egypt18 
or  to  Ghana  and  Ethiopia  (via  the  MIDA-Italy  programme,  managed  by  the  International 
Organisation for Migration), to improve their links with their respective diasporas, notably in 
Italy. 

In addition, governments in receiving countries that would like to involve foreign diasporas in 
their  work  with  developing  countries,  or  to  support  their  initiatives,  are  faced  with  the 
additional  difficulty  of  identifying  ‘the  right  interlocutors’  among  the  various  organisations 
representing  diasporas.  France,  for  example,  has  addressed  this  problem  by  encouraging 
diaspora organisations involved in the development of countries of origin to pool their efforts 
within  the  framework  of  an  umbrella  organisation,  FORIM19.  Other  Member  States  are 

17 

18 
19 

For the purposes of this Communication, we use a broad definition of the diaspora. The diaspora from a 
given  country  therefore  includes  not  only  the  nationals  from  that  country  living  abroad,  but  also 
migrants who,  living  abroad,  have  acquired  the  citizenship  of  their  country  of  residence  (often  losing 
their original citizenship in the process) and migrants’ children born abroad, whatever their citizenship, 
as long as they retain some form of commitment to and/or interest in their country of origin or that of 
their  parents.  In  some  extreme  cases,  such  as  the  Chinese  diaspora,  people  may  still  feel  part  of  a 
country’s diaspora even though their family has been living in another country for several generations. 
Cf. the website http://www.emigration.gov.eg 
Forum des organisations de solidarité internationale issues des migrations. 

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moving  in  the  same  direction,  for  example  the  Netherlands,  which  has  set  up  a  ‘National 
Ethnic  Minorities  Consultative  Committee’  (LOM),  which  groups  together  seven  ethnic 
minority organisations and which will in future be consulted on important development policy 
initiatives,  or  Germany’s  GTZ,  which  has  taken  steps  to  build  a  working  relationship  with 
organisations  representing  the  diaspora.  The  UK  is  also  taking  steps  in  the  same  direction, 
through support to an umbrella organisation (Connections for Development). 

The Commission will consider supporting efforts initiated by source countries at national or 
regional  level  to  set  up  databases  where  members  of  diasporas  interested  in  contributing  to 
home  countries’  development  can  register  on  a  voluntary  basis,  and  more  generally  to 
maintain links between these countries’ and their diasporas, in coordination with other donors. 

The Commission invites those Member States that do not already do so to identify and engage 
diaspora  organisations  which  could  be  suitable  and  representative 
in 
development policy and/or possible initiators of development projects in countries of origin. It 
would  also  welcome  steps  by  the  organisations  representing  diasporas  involved  in  the 
development  of  countries  of  origin  to  set  up  a  mechanism  that  could  ensure  appropriate 
representation of their interests at EU level, in particular as far as policies of interest to these 
countries are concerned. 

interlocutors 

2. 

The role of young people 

Helping young people from migrant communities maintain some form of relationship with the 
country of origin of their parents can both contribute to their integration – by helping avoid a 
sense  of  not  belonging  anywhere  –  and  encourage  them  to  maintain  a  commitment  to  the 
development of that country20, for example by encouraging them to visit it and get acquainted 
with the challenges it faces. Community policy, based on existing intra-EU experience, could 
play a role in this respect. 

In  addition  to  already  existing  initiatives,  notably  by  local  authorities  in  the  framework  of 
twinning schemes, which should be encouraged, the Commission will assess the feasibility of 
youth  exchange  schemes  focused  in  particular  on  migrant  communities,  based  on  the 
experience gathered with existing intra-EU schemes.  

3. 

Integration and citizenship 

Integration of migrants is much more than just a part of a diaspora mobilisation policy; it is 
one  of  the  central  pillars  of  EU  immigration  policy,  and  its  main  features  are  covered  in  a 
number  of  recent  policy  documents21.  This  policy,  by  allowing  migrants  to  feel  that  their 
cultural  identity  is  recognised  and  valued,  should  encourage  them  to  remain  committed  to 
their  country  of  origin  and  those  they  have  left  behind.  In  addition,  it  is  also  increasingly 
being recognised that migrants’ personal involvement in the development of their country of 
origin in turn facilitates their integration in the country of residence. The Commission is about 

20 

21 

Even  if  there  is  evidence  that  second-generation  diaspora  members  have  forms  of  commitment  that 
differ  from  those  of  the  first  generation:  skill  transfers  or  productive  investment  tend  to  replace 
remittances. 
In particular the Common Basic Principles adopted by the Council on 19 November 2004. In addition, 
there is Community legislation already in force on various important issues such as the rights of long 
term  residents,  family  reunification,  and  the  fight  against  discrimination,  racism  and  xenophobia.  A 
handbook on integration for policy-makers and practitioners was also published in November 2004, and 
further  efforts  will  be  undertaken  to  encourage  exchanges  of  experiences  between  Member  States.  In 
addition, a second Annual Report on Migration and Integration will soon be published. 

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to propose new orientations in the area of integration, by way of a Communication that will be 
adopted simultaneously with this Communication. 

ANNEX 5: 

INITIATIVES AND RECOMMENDATIONS FOR FOSTERING  
CIRCULAR MIGRATION AND BRAIN CIRCULATION 

The  development  of  new,  faster  modes  of  transportation  and  communication  as  well  as  the 
emergence of transnational communities mean that circular migration, in which migrants tend 
to  go  back  and  forth  between  the  source  country  and  the  destination  country,  and  return 
migration will become increasingly widespread. From a development standpoint this is good 
news,  as  circular  and  return  migration  offer  a  significant  potential  for  both  source  and 
destination countries, the migrant and his/her relatives in the country of origin. Return, even 
temporary, is likely to lead to the transfer of skills, know how and/or new cultural attitudes. 
Both  circular  migration  and  return  can  help  mitigate  the  impact  of  brain  drain.  Both  also 
foster brain circulation, which can be defined for the purpose of this Communication as the 
possibility  for  developing  countries  to  draw  on  the  skills,  know-how  and  other  forms  of 
experience gained by their migrants – whether they  have  returned  or  not  –  and  members  of 
their diaspora abroad. However, there are still obstacles to circular migration and to the return 
of  migrants  to  their  country  of  origin.  Removing  them  would  help  liberate  the  potential  of 
brain circulation for development.  

The Commission believes that action is necessary in the four following areas: 

1. 

Managed migration as an instrument of brain circulation 

The Commission recently published a Green Paper on an EU approach to managing economic 
migration22,  the  aim  of  which  is  to  actively  contribute  to  the  on-going  debate  on  the  most 
appropriate form of Community rules for admitting economic migrants.  

The  Green  Paper  stresses  the  need  for  the  Community  to  manage  migration  flows  in 
cooperation  with  countries  of  origin,  thereby  taking  into  account  the  challenges  they  face– 
including  brain  drain  in  particular  –  and  their  needs.  It  specifically  asks  the  question  of 
whether  preference,  in  terms  of  admission,  should  be  granted  to  certain  third  countries  and 
how23. 

As a result of the comprehensive debate launched by the Green Paper, which culminated with 
a  hearing  organised  on  14  June  2005,  the  Commission  will  present,  by  the  end  of  2005,  a 
policy plan on legal migration. This plan will include ideas on how the joint management of 
economic  migration  flows  between  countries  of  origin  and  destination  can  contribute  to 
improving the benefits of migration for the development of countries of origin 

22 
23 

COM(2004) 811, 11.1.2005 
Bilateral  agreements  between  a  country  of  destination  and  a  country  of  origin,  aimed  at  joint 
management of economic migration flows – as concluded by some EU Member States with a number of 
third countries – are one possible way in which such preferences can be granted. 

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2. 

Maximising the potential of temporary migration 

Temporary  migration  –  sometimes  even  seasonal  migration  –  is  becoming  an  increasingly 
popular way of meeting the demand for unskilled or relatively low skilled labour in a number 
of Member States. Whilst it is true that such temporary migration has limited advantages in 
terms  of  skills  enhancement,  especially  as  far  as  low-skilled  workers  are  concerned,  its 
potential  positive  impact  on  development  or  at  least  poverty  alleviation  should  not  be 
dismissed too quickly. It can help relieve excess labour supply in developing countries, and 
the  remittances  which  workers  send  to  their  relatives  often  represent  a  significant  share  of 
families’  overall  income  –  especially  since  temporary  migrants  tend  to  remit  more  than 
longer-term migrants as a percentage of their income.  

Policies  to  maximise  the  developmental  impact  of  temporary  migration,  in  addition  to  the 
general  recommendations  on  remittances24,  should  focus  on  encouraging  circular  migration, 
by giving a priority for further temporary employment to workers who have already worked 
under  such  schemes  and  have  returned  at  the  end  of  their  contract,  and  also  on  offering 
appropriate rewards to participating migrants. This could for instance build on the experience 
of  some  Member  Starts  in  reimbursing  pension  contributions  at  the  end  of  the  worker’s 
contract  or  include  the  payment  by  the  country  of  residence  of  a  top  up  on  the  worker’s 
savings.  Taking  into  account  the  results  of  the  debate  on  the  Green  Paper  on  economic 
migration, the Commission will also examine the possibility of defining a general framework 
for  the  entrance  and  short-term  stay  within  the  common  area  of  seasonal  migrants.  The 
Commission will continue discussions with Member States, social partners and civil society 
on these issues.  

In  addition,  temporary  migration  linked  to  the  cross-border  provision  of  services  is  also 
starting to feature highly on the international trade policy agenda, within the framework of the 
General  Agreement  on  Trade  in  Services  (GATS  –  the  so-called  Mode  4),  with  a  focus  on 
skilled labour. However the numbers of people covered by Mode 4 commitments, or taking 
advantage of them, are extremely small in comparison with the numbers of other temporary 
migrants or of long-term migrants. 

Whilst Mode 4 is only one form of temporary migration - and is essentially an aspect of trade 
rather  than  migration  policy  –  it  may  offer  insights  into  the  development  of  temporary 
migration  schemes  that  would  help  both  to  maximize  brain  circulation  in  the  interests  of 
developing countries and contribute to well managed migration through clear rules on period 
and  purpose  of  stay.  The  Community  is  promoting  an  approach  to  Mode  4  which  adopts 
common  terminology  and  transparent  arrangements  governing  the  categories  of  people 
covered and length of stay. This model could be built on for the further development of Mode 
4.  

In addition, the Commission already proposed in March 2004 a Recommendation concerning 
the  facilitation  of  issuing  conditions  for  uniform  short  stay  visas  for  researchers  from  third 
countries travelling within the EU for the purpose of carrying out scientific research. 

24 

Cf. section 2.1. in the main text and Annexes 2 and 3. 

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3. 

Facilitating return migration 

The  return  of  migrants  to  their  country  of  origin  can  have  a  significant  positive  impact  in 
development  terms,  provided  that  it  is  well  prepared  and  that  the  migrant  is  an  active 
protagonist in his/her own return, with a project – entrepreneurial for example – (s)he intends 
to carry out. While schemes to assist the return of migrants will usually be focused on legal 
migrants, they should not necessarily be reserved to them. The experience of the French “aide 
à la réinsertion” scheme shows that such schemes sometimes offer an ‘honourable way out’ to 
migrants whose migration project has failed, including some illegal migrants. 

A  number  of  general  lessons  can  be  drawn  from  the  various  return  schemes  that  have  been 
developed,  notably  at  the  level  of  EU  Member  States25,  by  the  Community26  and  by 
international organisations such as the International Organisation for Migration (IOM). A first 
lesson  is  that  financial  support  is  not  enough  to  make  return  a  success27.  Advice  and  other 
forms  of  non-financial  assistance,  both  before  and  after  the  migrant’s  return,  play  an 
indispensable  role,  especially  when  the  migrant  –  who  does  not  necessarily  have  directly 
relevant experience – intends to start his/her own business in the country of origin. Another 
lesson  is  that  migrants  are  often  reluctant  to  envisage  a  return  to  their  home  country  unless 
they have some guarantee that they will be able to continue to travel back and forth between 
the country of origin and the (former) country of destination. This is obviously the case when 
the  migrant  plans  to  continue  some  form  of  business  activity  in  his/her  former  country  of 
residence, but such a possibility can also play the role of an insurance mechanism, especially 
when  the  migrant  –  be  he  or  she  a  former  refugee  or  asylum  seeker  or  not  –  comes  from  a 
country  whose  future  stability  –  economic  or  political  –  remains  problematic.  This  problem 
can  be  addressed,  at  least  on  a  temporary  basis,  by  granting  the  returnee  a  multi-entry  visa 
allowing him/her to return to his/her former country of residence. A number of Member States 
have taken steps in this direction. Another possibility that has similar effects is to maintain the 
validity of the returning migrant’s residence permit for a certain amount of time after his/her 
return.  Such  a  system  exists  in  Denmark,  where,  in  addition,  refugees  potentially  willing  to 
return to their country of origin are given the possibility of returning temporarily to assess the 
situation  and  prospects  before  they  make  a  final  decision  to  return,  and  refugees  and  their 
families who return voluntarily are allowed to go back to Denmark within one year of their 
return. 

The  Commission  will  invite  Member  States  and  other  interested  stakeholders  to  share  their 
experience of the elaboration and management of assisted return programmes and of support 
of  countries  of  origin  with  the  successful  reintegration  of  return  migrants.  Within  this 
framework, it will examine relevant short-term visa policy issues. 

A number of practical steps should also be taken to facilitate the return of migrants to their 
country of origin: 

25 

26 
27 

An interesting example is the scheme run by the ‘Gothenburg Initiative’ (Göteborg Initiativet), an NGO 
supported by the City of Gothenburg and the Swedish authorities, which has devised a scheme whereby 
willing  refugees,  notably  from  Bosnia  and  Herzegovina  and  Somalia,  living  in  Gothenburg  are  being 
supported in developing self-employing business activities upon returning to their country of origin.  
Especially the Afghanistan return scheme (cf. point 2 of Annex 1). 
In addition, exclusively financial support might attract purely opportunistic applicants with no serious 
interest in developing and implementing a personal project for a successful return. 

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•  Member States should ensure that the pensions obtained in a migrant’s former country of 
residence  can  be  paid  to  him/her  in  the  country  of  origin  after  his/her  return;  or  that  the 
contributions made by a migrant and by his/her employers into public pension schemes can 
be paid back to him/her as a lump sum upon his/her return to the country of origin in cases 
where the total amounts paid are not enough to entitle him/her to a pension. 

•  Steps  should  be  taken  to  ensure  that  a  migrant’s education and qualifications  received in 
the country of destination can be easily recognised by authorities in the country of origin, 
as this will facilitate his/her professional integration upon returning28. 

•  Member  States  could  offer  the  possibility  for  financial  institutions  to  open  up  special 
savings accounts accessible to migrants intending to return to their home country at the end 
of  their  work  experience.  These  products  could  benefit  from  a  favourable  tax  treatment, 
and the Member State of residence could also grant an interest rate subsidy and/or a bonus 
at the time of return. 

•  As far as researchers and other skilled professionals are concerned, it is essential that they 
can, upon return, continue to have exchanges with their former colleagues. Fellowships for 
returning researchers and instruments such as web portals to allow continuous interactions 
within  trans-national  research  communities  are  among  the  instruments  that  will  be 
supported under the 7th Framework Programme on R&D29. 

The  Commission  will  look  at  the  possibility  of  proposing  measures  in  areas  such  as  the 
transferability of pension rights, the recognition of qualifications or mechanisms to ensure that 
researchers  or  other  professionals  who  have  worked  in  the  EU  can  keep  in  touch  with  their 
former colleagues to facilitate voluntary returns and help them reintegrate successfully. 

4. 

Temporary or virtual return 

Migrants do not necessarily need to return permanently to their country of origin to contribute 
usefully  to  its  development.  Indeed,  temporary  return  appears  as  a  promising  way  in  which 
diasporas can be mobilised in favour of countries of origin (cf. section 2.2. in the main text). 
Obviously, it is up to individual diaspora members to decide whether and how they want to 
get  involved.  However,  available  evidence  shows  that  many  diaspora  members  are  already 
active,  and  many  more  would  be  willing  to  follow  suit  provided  that  more  appropriate 
conditions were in place. This is where public policy can play an important role. 

28 

29 

Conversely,  steps  to facilitate  the  recognition of  the  skills  acquired by migrants  outside  of  the  EU, if 
feasible,  could  make  it  easier  to  fully  use  their  potential  and  avoid  the  risk  of  ‘brain  waste’.  The 
development of co-operation with a number of third countries – notably the EU’s immediate neighbours 
–  in  the  area  of  education  could  allow  for  some  progress  in  this  respect,  at  least  as  far  as  formal 
qualifications (diplomas) are concerned. 
Moreover, the Commission has already issued, as part of the package on the admission of third country 
nationals to carry out scientific research in the European Community - COM(2004) 178, 16.3.2004 -, a 
draft recommendation encouraging Member States to ‘promote the international mobility of researchers 
from  third  countries  needing  to  travel  frequently  within  the  European  Union  by  issuing  them  with 
multiple  entry  visas’.  In  addition  to  ensuring  brain  circulation,  such  measures  can  also  contribute  to 
limiting  the  brain  drain  of  scientists  from  developing  countries  (cf.  section  2.4.  in  the  main  text  and 
Annex  6),  by  lowering  the  disadvantages  for  researchers  of  residing  and  working  in  developing 
countries. 

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There are several ways in which temporary return can allow diaspora members to contribute 
to the development of their country or region of origin. Short or medium term secondments of 
scientists, doctors, engineers or other qualified professionals in institutions in their countries 
of origin can enable them to share their skills and knowledge with those who have remained 
“at  home”.  Diaspora  skills  databases  (see  point  1  in  Annex  4)  can  enable  authorities  or 
institutions  in  countries  to  tap  into  the  available  skills  potential.  International  organisations 
such as IOM (with the Migration for Development in Africa programme – MIDA) and UNDP 
(with  the  Transfer  of  Knowledge  through  Expatriate  Nationals  scheme  –  TOKTEN)  have 
developed significant expertise in this area, and the activities they manage are often supported 
financially by one or several EU Member States30 or the Community. In this case, temporary 
return  can  be  complemented  or  in  some  cases  replaced  by  “virtual  return”,  relying  on 
electronic  communications  (for  example,  via  distance  learning,  a  University  professor  in  an 
EU Member State can also teach to students in a University in his/her country of origin, where 
(s)he could also be physically present for a couple of months each year). 

The  Commission  proposes  to  build  upon  existing  experience  in  temporary  or  virtual  return 
programmes  and  extend  it,  where  necessary,  to  other  parts  of  the  developing  world.  It  will 
also  look  at  the  possible  support  that  could  be  provided  to  e-learning  schemes  within  the 
framework  of  Community  programmes  on  information  and  communication  technologies 
(ICT).  

Furthermore, initiatives will be taken within the framework of the 7th Framework Programme 
on Research and Development to facilitate networking between foreign researchers working 
in the EU – especially those working in areas of direct interest to developing countries – and 
research organisations in their countries of origin.  

The  Commission  will  also  look  at  how  to  ensure  that  the  residence  rights  in  the  EU  of 
diaspora  members  who  decide  to  engage  in  such  activities  are  not  affected  by  temporary 
returns to countries of origin.  

Temporary return, and more generally circular migration, can also allow migrants or diaspora 
members  who  have  succeeded  in  business  activities  in  the  EU  to  set  up  additional  business 
activities – either directly connected or not to their main activity in the EU – in their country 
of origin, thereby actively contributing to the latter’s development through innovation and job 
creation.  The  work  conducted  by  the  Commission  in  the  area  of  ethnic  entrepreneurship31 
shows that migrants and more generally persons of foreign origin are often likelier than other 
people  to  engage  in  entrepreneurial  activities.  They  therefore  constitute  an  important  skills 
potential  for  their  countries  of  origin,  provided  that  appropriate  policies  are  implemented. 
Their  knowledge  of  both  the  country  of  origin  and  the  country  of  residence  can  be  an 

30 

31 

For instance, a MIDA project for the Great Lakes region was funded by Belgium, and another project 
for Ghana was funded by the UK and the Netherlands. 
Following preparatory work, a Commission study on ‘Promoting Ethic Minority Entrepreneurs’ is about 
to be carried out in the framework of the Multi-annual programme for enterprise and entrepreneurship 
2001-2005. In addition, the Commission’s Action Plan on Entrepreneurship - COM(2004) 70, presented 
on  11  February  2004  -  foresees  a  key  action  on  «Providing  tailor-made  support  for  ethnic  minority 
entrepreneurs»  and  commits  the  Commission  to  collaborate  with  national  and  regional  authorities  to 
address those areas where the needs of ethnic entrepreneurs are still insufficiently met, namely access to 
finance and entrepreneurial networks. It foresees that the Commission will encourage networks among 
policy-makers and seek the active involvement of representative bodies of ethnic minorities for building 
a better dialogue at EU, national and regional level.  

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important business asset, in particular for marketing in the EU products from the country of 
origin32  –  or  even  the  country  itself  as  a  tourist  destination.  Some  initiatives  have  been 
developed with a view to facilitating the investments of such people in their country of origin, 
for example a project – funded under EC budget line B7-667 – to help highly skilled members 
of the Moroccan diaspora in France set up innovative start-ups in Morocco. 

The  Commission  will  continue  to  make  support  available  in  future,  under  the  Aeneas 
programme, to projects by which migrants or diaspora members set up sustainable economic 
activities  in  countries  of  origin,  with  a  preference  for  projects  in  third  countries  involving 
diasporas  in  two  or  more  Member  States.  Such  projects  should  be  coherent  with  the 
development strategy of the third country concerned. 

In  addition,  it  will  further  study  the  ways  in  which  interested  entrepreneurs  from  migrant 
communities can contribute to the development of their country of origin, the obstacles they 
face in doing so and the policies that should be followed to overcome these obstacles.  

Perhaps  more  importantly,  in  addition  to  direct  financial  support  for  such  involvement  of 
diaspora  members,  public  authorities  can  also  contribute  to  such  efforts  by  removing  a 
number of obstacles, in particular by: 

•  in the public sector, offering the possibility for secondments to institutions in developing 

countries for migrants or diaspora members wishing to engage in such activities; 

•  in the private sector, removing legal obstacles to unpaid sabbatical leaves and encouraging 
businesses to enable their employees of foreign origin to take unpaid leave for engaging in 
such activities33; 

•  in  both  cases,  ensuring  that  the  persons  in  question  can  continue  to  contribute  to  and 
benefit from social security schemes, in particular health insurance and pension schemes. 

The Commission will foster the identification of best practices in areas such as secondments 
or  sabbatical  leaves,  and  the  related  social  security  aspects,  that  can  facilitate  temporary 
return,  as  part  of  the  dialogue  to  be  launched  with  Member  States  as  a  follow-up  to  this 
Communication. 

32 

33 

Migrants and more generally diasporas can therefore play an important role in helping their countries of 
origin  take  advantage  of  the  important  trade  concessions  granted  by  the  Community  to  developing 
countries, notably in the context of the ‘Everything But Arms’ (EBA) initiative, and which at present 
are far from being fully used by beneficiary countries.  
This  issue  may  be  raised  by  the  Commission  with  the  Social  Partners  in  the  framework  of  the 
discussions underway on Corporate Social Responsibility. 

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INITIATIVES AND RECOMMENDATIONS FOR MITIGATING THE ADVERSE EFFECT OF 
BRAIN DRAIN ON DEVELOPING COUNTRIES 

ANNEX 6: 

Whereas  there  are  many  cases  where  migration  is  profitable  for  countries  of  origin,  it  can 
cause  damage  in  specific  situations.  This  is  particularly  so  when  emigration  leads  to 
significant skills shortages in sectors that are essential for the social or economic development 
of the countries in question. Such cases are best documented in the healthcare and education 
sector  and  the  worst  affected  countries  appear  to  be  in  Africa  and  in  the  Caribbean,  but 
problems could also appear in other sectors or parts of the world. The phenomenon of brain 
drain affects particularly poorer countries because emigrants tend to have a better education 
than those who stay at home (the greater the distance, the greater the difference tends to be) 
and  because  selective  immigration  policies  in  developed  countries  have  contributed  to  the 
acceleration of the emigration of skilled professionals.  

It  must  be  noted  that  education  abroad  can  also  contribute  to  brain  drain  if  students  do  not 
return at the end of their studies. This phenomenon can become self-sustaining if emigration, 
by  depriving  universities  of  their  best  students,  leads  to  lower  quality  levels,  encouraging 
further emigration. 

While there is no such thing as a ‘right to migrate’, it must be acknowledged that the decision 
to look for and take up employment abroad is largely based on an individual assessment by 
the persons concerned of the costs and benefits of such a choice. Public policies often have 
little influence on this decision. In addition, Member States retain significant competences in 
the  area  of  economic  migration  and  there  are  obvious  limits  to  the  scope  for  Community 
action  in  this  area.  The  Commission  believes,  however,  that  action  in  this  area  should 
encompass the following issues: 

1. 

Improving the evidence base 

The sensitivity to brain drain-type problems varies enormously from country to country and 
from  sector  to  sector.  Whereas  some  developing  countries  suffer  from  very  significant 
shortages of critical skills, others have an excess supply of these skills34, and some even have 
a deliberate policy of exporting skilled people, often trained in specialised, private educational 
institutions. Any sensible policy on mitigating brain drain should therefore be based on sound 
data at sectoral and country (or even sub-national, in the case of large countries) level. 

The Commission, in collaboration with other interested organisations and donors, is willing to 
support efforts by interested developing countries to improve their knowledge of their labour 
markets, including shortages or excesses of skills at sectoral level. This would serve as a basis 
for countries to devise responses to the identified problems, in the framework of their poverty 
reduction strategies.  

The  Commission  is  ready  to  support  such  responses,  in  the  framework  of  its  assistance  to 
these countries. In addition, it would also make such information available to Member States, 

34 

In other words, a situation where there are not enough suitable employment opportunities for graduates. 
In such situations the emigration of skilled professionals can be characterised as ‘brain overflow’ rather 
than as brain drain. 

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so  as  to  help  them  steer  their  recruitment  policies  in  a  way  that  does  not  harm  the 
development of countries of origin, as well as to the general public. 

As  an  example  of  possible  responses,  the  Commission  is  currently  preparing  a  separate 
Communication on 'Addressing the Crisis in Human Resources for Health', which will aim to 
prepare a set of innovative responses to human resource crisis in developing countries, within 
the broader health context of these countries, and building upon the framework set out in this 
Communication.  

2. 

Disciplining recruitment 

The  issue  of  limiting  recruitment  of  qualified  professionals  from  developing  countries 
suffering from severe skills shortages in key sectors was raised previously by the Commission 
in the December 2002 Communication. While it is not desirable to prevent individual would-
be  migrants  from  looking  for  suitable  employment  in  the  EU,  there  is  a  case  for  limiting 
active recruitment by or on behalf of EU employers in those developing countries and sectors 
that  suffer  from  severe  skills  shortages.  Especially  at  a  time  when  the  need  for  skills  in 
developed countries is expected to increase, a situation where recruitment is carried out at the 
expense  of  development  objectives  must  be  avoided.  One  Member  State,  the  United 
Kingdom,  has  developed  a  voluntary  instrument  in  the  healthcare  sector35  and  there  is 
therefore  already  some  experience  in  the  EU.  In  addition,  the  World  Health  Assembly  has 
called for international action in this area36.  

It is the Commission’s view that isolated action by one or a  few  countries is unlikely to be 
very effective if other developed countries do not show the same degree of self-discipline. 

The Commission encourages Member States to develop mechanisms such as codes of conduct 
to limit active recruitment in cases where it would have significantly negative repercussions 
for targeted developing countries, especially in the healthcare sector, and to coordinate their 
respective efforts in this area.  

The  Commission  will  also  strive  to  persuade  other  important  destination  countries  to  work 
towards similar arrangements. The possibilities for a global approach to recruitment policies 
should be explored and this issue be raised in the appropriate international fora, such as the 
WHO. 

The  orientations  which  the  Commission  will  issue  as  a  follow-up  to  its  Green  Paper  on 
economic migration could also further contribute to the debate on disciplining recruitment37. 

3. 

Helping developing countries replenish their skills base 

For  source  countries  the  phenomenon  of  brain  drain  often  represents  a  loss  of  significant 
investment in training and education, at least when the people who migrate have been trained 
by  public  sector  institutions.  It  is  difficult,  from  a  human  rights  perspective,  to  restrict 
people’s  mobility  by  preventing  them  from  looking  for  better  paid  employment  or  better 

35 

36 

37 

A  revised,  strengthened  version  of  the  Code  of  conduct  on  recruitments  in  the  healthcare  sector  was 
issued in December 2004. 
‘International  migration  of  health  personnel:  a  challenge  for  health  systems  in  developing  countries’. 
Resolution adopted by the 57th World Health Assembly on 22 May 2004. 
See Section 2.3 of the main text and Annex 5. 

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living and working conditions elsewhere38. However, the question arises whether destination 
countries  could  not,  in  one  way  or  another,  help  developing  countries  that  suffer  from 
significant skills shortages as a result of migration to replenish their skills base.  

Some  Member  States  are  already  providing  financial  support  for  the  training  of  health 
professionals  in  developing  countries  where  they  have  been  actively  recruiting.  In  the 
Commission’s view this type of ‘compensation-schemes’ should not be viewed as a substitute 
for  a  policy  for  disciplining  recruitment.  However,  the  Commission  encourages  Member 
States  to  consider  skill  replenishment  schemes  in  countries  that,  as  a  result  of  brain  drain 
processes, need to upgrade their healthcare and/or education human resource basis. 

4. 

Better use of existing skills resources within the EU 

An  obvious  response  to  the  phenomenon  of  brain  drain  is  for  the  EU  to  better  use  its  own, 
existing skills resources. In this respect, the Lisbon strategy’s general objective of raising the 
activity  rate  in  the  EU  offers  a  first  response.  At  a  more  specific  level,  a  well  designed 
integration  policy39  should  also  make  it  easier  for  the  EU  to  tap  into  the  partly  unused 
potential represented by the migrants already residing in the EU. However, the maintenance 
by many Member States of transitional restrictions on the free movement of workers from the 
new Member States can also act in some cases as an obstacle to the optimal use of available 
skills resources40 in the enlarged EU. This would appear to militate in favour of a relaxation 
of temporary restrictions on free movement of workers from the new Member States. 

5. 

Fostering institutional partnerships 

It is often difficult for developing countries seeking to encourage skilled professionals to stay 
in these countries rather than to emigrate or to encourage their return to compete against the 
wages and working conditions available in developed countries. Still, wages are only part of 
the  equation  and  the  Commission  believes  that  providing  such  professionals  with  career 
prospects and an adequate infrastructure could play an important role in changing the working 
conditions. Nowhere is this truer than in the research area. 

Fostering partnerships between institutions in the EU and in interested developing countries 
or region could play a role in addressing the causes of brain drain. In each case the precise 
mix of measures to be put in place would depend on a preliminary assessment of the country 
or region’s specific problems and needs. Measures could include support for the creation of 
partnerships  between  scientific  or  university  institutions  in  developing  countries  and  in  the 
EU to conduct research activities jointly41. 

Other  forms  of  partnerships  between  research  institutions,  universities,  hospitals  or  other 
bodies in developing countries and EU Member States to mitigate brain drain could include 

38 

39 
40 

41 

Even  though  some  developing  countries  have  devised  a  number  of  partial  solutions.  Indian  medical 
students,  for  example,  are  obliged  to  spend  a  certain  amount  of  time  working  in  rural  or  poor  areas 
before they get their diploma.  
Cf. point 3 of Annex 4. 
However,  consideration  must  also  be  taken  of  the  fact  that  some  of  the  new  Member  States  may 
themselves be suffering from a situation of brain drain in specific sectors, as a result of an outflow of 
skilled labour to the EU-15 or other developed countries. 
Support  to  such  partnerships  is  already  an  important  component  of  EU  policy  on  research  and 
development and will be further developed under the upcoming 7th Framework Programme. 

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‘shared  work  schemes’  in  which  scientists,  researchers,  doctors,  technicians  or  other 
professionals from developing countries would share their work between an institution in their 
country of origin (University, hospital, research centre, etc.) and a partner institution in an EU 
Member State42. The possibility of providing Community support to such schemes could be 
assessed, notably in the framework of the 7th Framework Programme on R&D.  

6. 

Development  cooperation  as  a  source  of  employment  opportunities  for  skilled 
professionals in developing countries. 

Tens  of  thousands  of  skilled  professionals  from  developed  countries  are  employed  in  the 
elaboration,  management  and  implementation  of  ODA-funded  assistance  projects  in 
developing  countries.  If  a  significant  number  of  these  professionals  could  be  replaced  by 
nationals from the beneficiary countries or regions, this would create important employment 
opportunities for these nationals. Most donors have already taken some steps in this direction, 
but more can be done.  

The Commission believes that donors, in the context of OECD/DAC, could usefully review 
the  operational  mechanisms  of  their  technical  assistance  programmes  with  the  specific 
objective of assessing whether stronger incentives for the employment of skilled professionals 
from developing countries by implementing bodies could be introduced.  

With regard to projects funded by the European Development Fund (EDF) in ACP countries, 
article 26 of Annex IV of the Cotonou Agreement already provides that, ‘in respect of service 
contracts,  given  the  required  competence,  preference  shall  be  given  to  1)  experts  …  from 
ACP States where tenders of equivalent economic and technical quality are compared…”. 

42 

Such schemes constitute one possible form of ‘circular migration’ (see section 2.3 in the main text and 
Annex 5). 

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COMMISSION INTENTIONS WITH REGARD TO THE FOLLOW-UP OF THIS 
COMMUNICATION 

ANNEX 7 

1. 

Dialogue with Member States 

Once the Council has adopted Conclusions on the implementation of this Communication, the 
Commission is in favour of initiating a multidisciplinary dialogue with and between Member 
States  on  migration  and  development,  in  which  Member  States’  Ministries  dealing  with 
migration in its various aspects – Development, Employment, External Relations, and Justice 
and Home Affairs – would be represented. This dialogue would aim at reinforcing coherence 
between the two policy areas. Its tasks would be threefold: 

•  informing  Member  States  on  the  implementation  of  this  Communication  in  general  and 

more specifically on progress on a number of initiatives taken in this context; 

•  serving as a forum to exchange experiences and practices in the various areas covered by 

this Communication; 

•  and, in doing so, contributing to improve overall coherence of these activities, in particular 

to maximise EU leverage at the global level. 

This  dialogue  could  be  complemented  by  an  electronic  forum  for  communication  between 
members and an internet portal, also open to all interested parties, which would help access 
the  various  studies  and  research  papers  on  issues  related  to  the  migration  and  development 
nexus  prepared  by  or  on  behalf  of  the  Member  States,  EU  institutions  or  international 
organisations.  This  would  help  ensure  that  the  significant  amount  of  already  available 
information is best used and avoid duplications.  

At a later stage, this internet portal could be extended to include identified best practices in 
the various areas covered by this Communication. 

2. 

Dialogue with Third Countries 

As developing countries are directly affected by EU policy on migration and development, the 
Commission  will  continue  to  integrate  migration  related  topics  in  the  dialogue  with  these 
countries. A number of the orientations presented in this communication and its annexes will 
require  further  debate  and  cooperation  with  interested  developing  countries,  either 
individually  or  as  members  of  regional  groupings.  These  dialogues  should  use  the  existing 
institutional frameworks43.  

Policy initiatives, including assistance projects, should be based on an analysis of the situation 
of  the  country  or  group  of  countries  concerned  and  designed  and  carried  out  in  a  spirit  of 

43 

For  example  the  dialogues  with  individual  ACP  countries  provided  for  in  Article  8  of  the  Cotonou 
Agreement, the bodies set up under the Association or Cooperation Agreements, or the mechanisms of 
the Euro-Mediterranean Partnership. Another example, is that of the countries of South East Asia, with 
whom  the  new  bilateral  agreements  which  will  be  concluded  will  provide  for  a  "comprehensive 
dialogue  on  all  migration-related  issues”  which  could  be  used  for  addressing  migration  and 
development issues, among others. 

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partnership  with  these  countries.  Where  appropriate,  issues  linked  to  the  migration  and 
development nexus should also be reflected in the relevant country strategy papers (CSPs) or 
regional strategy papers (RSPs).  

The  Commission  also  proposes  the  establishment  of  a  Migration  Profile  (MP)  for  each 
interested developing country. Such a document would bring together all information relevant 
to  the  design  and  management  of  an  effective  policy  on  migration  and  development44.  This 
could  help  define  a  policy  response  which  would  tailor  to  the  situation  and  needs  of  the 
country  or  countries  concerned  the  instruments  presented  in  a  generic  manner  in  this 
Communication and its annexes. (the proposed MP is further described in Annex 8). 

In addition, the Commission is ready to discuss with interested developing countries and their 
regional groupings the possibility and appropriateness of better reflecting – where appropriate 
– issues related to the migration and development nexus in Poverty Reduction Strategy Papers 
(PRSPs). 

3. 

Cooperation with international organisations 

In  devising  and  implementing  strategies  to  maximise  the  contribution  of  migration  to 
development,  EU  institutions  should  take  proper  account  of  the  work  already  done  by  a 
number of international organisations in these areas and the expertise available there in order 
to avoid duplications of efforts. In addition, the Commission does not necessarily possess the 
specialist expertise available in these organisations. The Commission will therefore reinforce 
its on-going dialogue on issues of migration and development with organisations such as the 
World Bank, ILO, UNHCR, the OECD, UNDP or IOM.  

4. 

Other stakeholders 

The  Commission  will  maintain  a  dialogue  with  non-governmental  actors,  including  social 
partners, on issues related to migration and development. In particular, it will welcome efforts 
by  diaspora  organisations  engaged  in  the  development  of  countries  of  origin  to  set  up 
mechanism or structures to ensure their representation at EU level45. This should help these 
organisations express their views on the issues and initiatives set out in this Communication 
and its annexes and to contribute actively to its follow-up. 

44 

45 

Including aspects such as the gender dimension of migration, refugee aspects or the factors that might 
facilitate illegal migration, smuggling and trafficking. 
Cf. point 1 of Annex 4. 

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ANNEX 8: 

MIGRATION PROFILES 

Given the impact of initiatives in the area of migration and development, an evidence-based 
approach which takes into account the realities of developing countries is necessary. In order 
to  develop  a  tailor-made,  partnership  approach  for  interested  developing  countries,  a  better 
understanding  of  the  migration  situation  and  related  issues  is  a  pre-condition.  With  this  in 
mind  the  Commission  proposes  the  establishment  of  a  Migration  Profile  (MP)  for  each 
interested  developing  country.  Such  a  document,  which  would  be  prepared  by  the 
Commission  in  cooperation  with  the  relevant  country,  would  bring  together  all  information 
relevant to migration and development, thus allowing for a more appropriate policy approach 
and contributing to a better understanding of the results of the policies implemented. 

Each  MPs  would  aim  to  gather  information  on  issues  such  as  the  labour  market  situation, 
unemployment  rates,  labour  demand  and  supply  and  present  or  potential  skill  shortages  by 
sector and occupation, skills needs in the country, skills available in the diaspora, migration 
flows,  incoming  and  outgoing  financial  flows  linked  with  migration,  including  migrant 
remittances, as well as relevant gender aspects and those related to minors.  

MPs  would  also  include  an  overview  of  the  policy  framework  of  the  country  considered, 
including legal instruments relevant to migration. An overview of relevant projects and other 
initiatives in the country could also be included. They should  finally  aim to assess both the 
short-  and  long-term  impact  on  developing  countries'  labour  markets  of  various  relevant 
migration-related policies, if possible at a sectoral and occupational level. 

A large  amount  of  information required for devising MPs is already available, although not 
from  a  single  source  and  not  systematically  for  each  country.  MPs  would  provide  a 
framework  for  bringing  existing  information  from  different  sources  together  in  a  structured 
manner.  In  the  beginning,  MPs  would  be  incomplete,  but  by  revealing  the  gaps  in  the 
available information, they would make it easier to fill these gaps as time went on. 

Besides this factual information MPs should also review the results of analyses of the various 
areas that are relevant for migration policy. They would  help respond to  challenges such as 
how to deal with skills shortages or on the contrary labour surpluses, how to tap into the skills 
of  the  diaspora  or  how  to  maximise  inflows  of  remittances  and  make  more  productive  use 
thereof. 

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