Romania Economy Watch
Here's one for your bookmarks. Browsing for information on remittances into Romania I came across "Romanian Migration to Spain - Motivation, Networks and Strategies" by Ana Bleahu, which is a working paper (careful PDF) from the Institute for Quality of Life at the Romanian Academy, Bucharest. The document is a mine of information, and very readable for the insight it offers on the actual motivations of the migrants.
The paper also includes this very revealing chart, which just about says it all I think.
Perhaps it is worth recalling at this point Spain and Italy have been the principal destinations for Romanian migrants, and that the number of Romanians in Spain has increased in the following fashion:
(more explanation of this in this post) while the number of Romanians in Italy has increased as follows:
And while I'm up here posting, here's a reminder of the volume of remittances these Romanians are sending home (as measured by the World Bank, who openly recognise that this is minimum data, since accurate information here is virtually impossible to come by).
I think the conclusion we can draw here is that - even while accepting that the number of Romanians working in Spain and Italy increased significantly in 2005 and 2006, the very steep increase in the chart is more a by-product of the fact that the post 2004 data while still inadequate is nonetheless a big improvement on what was available earlier. Another way of looking at this is to take the current transfers item in the monthly balance of payments data published by the National Bank of Romania.
While this data has little validity in absolute terms - since it includes other kinds of transfer - in relative terms it can give us a much better appreciation of how the remittances situation has evolved over the years than the World Bank data can. It will also give us some sort of proxy indicator to track as we move forward. Be all this as it may, the world bank estimate the 2006 volume to have been some 4.1% of GDP, and that is very large, and with significant macroeconomic consequences as we are currently seeing. I think what no-one had thought about before was the way in which these remittances could be treated as an income stream and used to finance mortgage borrowing to fuel construction, with all the distortionary consequences we are now observing.