Expats send USD351bn home

BUSINESS

A new World Bank report says remittance flows from people living outside their country of birth topped USD351 billion to developing countries this year. More than 215 million people live outside their countries of birth.

The report says remittance flows to developing countries are expected to total USD351 billion this year, and worldwide remittances, including those to high-income countries, will reach USD406 billion. By 2014, remittances to all countries will reach USD515 billion and to developing countries USD441 billion. Lower remittance costs are helping drive this growth, the report said.

The top global recipients of remittances were India, China, Mexico and the Phillipines; followed by Pakistan, Bangladesh, Nigeria, Egypt and Lebanon.

Nigerians living abroad remitted USD11 billion this year.

Remittance flows to Sub-Saharan Africa showed 7.4% growth, while growth slowed in North Africa.

“Despite the global economic crisis that has impacted private capital flows, remittance flows to developing countries have remained resilient, posting an estimated growth of 8 percent in 2011,” said Hans Timmer, Director of the Bank’s Development Prospects Group. “Remittance flows to all developing regions have grown this year, for the first time since the financial crisis.”

There are, however, some serious downside risks to the Bank’s outlook for international remittance and migration flows, said the bank. Persistent unemployment in Europe and the US is affecting employment prospects of existing migrants and hardening political attitudes toward new immigration. Volatile exchange rates and uncertainty about the direction of oil prices also present further risks to the outlook for remittances.  

More recently, some of the GCC countries, which are critically dependent on migrant workers, are considering tighter quotas for migrant workers to protect jobs for their own citizens.

“Such policies may impact remittance flows to developing countries in the longer term,” said Dilip Ratha, Manager of the Bank’s Migration and Remittances Unit and a co-author of the Migration and Development Brief. “But in the medium-term the risk of disruption to these flows is relatively low.”

The report noted that in several small low-income countries, remittances exceed a fifth of GDP and provide the largest source of foreign exchange. It said the remittances sent home by migrants to developing countries are three times the size of official development assistance and represent a lifeline for the poor.