Global remittances, which include flows to high-income countries, grew 7 per cent to USD 613 billion last year, from USD 573 billion in 2016, the bank said.
India retained the top position as recipient of remittances with its diaspora sending about USD 69 billion back home last year, the World Bank said today. Remittances to India picked up sharply by 9.9 per cent, reversing the previous year’s dip, but were still short of USD 70.4 billion received in 2014. In its latest Migration and Development Brief, the World Bank estimated that officially recorded remittances to low-and middle-income countries reached USD 466 billion in 2017. This was an increase of 8.5 per cent over USD 429 billion in 2016. Global remittances, which include flows to high-income countries, grew 7 per cent to USD 613 billion last year, from USD 573 billion in 2016, the bank said.
The stronger than expected recovery in remittances is driven by growth in Europe, Russia and the US. The rebound in remittances, when valued in US dollars, was helped by higher oil prices and a strengthening of euro and ruble, it added. India continued to top in terms of receiving remittance, and was followed by China (USD 64 billion), the Philippines (USD 33 billion), Mexico (USD 31 billion), Nigeria (USD 22 billion), and Egypt (USD 20 billion). The Bank said remittances to South Asia grew a moderate 5.8 per cent to USD 117 billion. Reversing previous year’s sharp decline (8.9 per cent in 2016), remittances to India in 2017 picked up sharply by 9.9 percent, the bank said. As against USD 62.7 billion in 2016, it received USD 69 billion last year.
The upsurge is likely to continue into 2018 on the back of stronger economic conditions in advanced economies (particularly the US) and an increase in oil prices that should have a positive impact on the GCC countries. However, flows to Pakistan and Bangladesh were both largely flat in 2017, while Sri Lanka saw a small decline (-0.9 per cent). In 2018, remittances to the region will likely grow modestly by 2.5 percent to USD 120 billion. Pakistan received USD 20 billion in remittances, whereas Bangladesh received USD 13 billion. Remittances are expected to continue to increase in 2018, by 4.1 per cent to reach USD 485 billion. Global remittances are expected to grow 4.6 per cent to USD 642 billion in 2018. The Bank said, the global average cost of sending USD 200 was 7.1 per cent in the first quarter of 2018, more than twice as high as the Sustainable Development Goal target of 3 per cent.
Sub-Saharan Africa remains the most expensive place to send money to, where the average cost is 9.4 per cent. Major barriers to reducing remittance costs are de-risking by banks and exclusive partnerships between national post office systems and money transfer operators. These factors constrain the introduction of more efficient technologies-such as internet and smartphone apps and the use of crypto currency and blockchain-in remittance services. “While remittances are growing, countries, institutions, and development agencies must continue to chip away at high costs of remitting so that families receive more of the money.
Eliminating exclusivity contracts to improve market competition and introducing more efficient technology are high-priority issues,” said Dilip Ratha, lead author of the Brief and head of KNOMAD. In a special feature, the Brief notes that transit migrants-who only stay temporarily in a transit country-are usually not able to send money home. Migration may help them escape poverty or persecution, but many also become vulnerable to exploitation by human smugglers during the transit. Host communities in the transit countries may find their own poor population competing with the new-comers for low-skill jobs, it said.