The World Bank’s Migration and Development Brief reveals that India has retained its top position as the highest remittance-receiving country, with its diaspora sending $79 billion back home in 2018. This article presents an overview of the key findings from this report, focusing on the increasing trend in remittances globally, regional and country-wise remittance stats, the high costs associated with remitting money, and the brief’s recommendations to reduce these costs.
Key Findings: Increase in Remittances
The Brief points out an upward trajectory in remittances towards low- and middle-income countries, registering a record high in 2018. Global remittances, including those towards high-income countries, totaled $689 billion in 2018, up from $633 billion in 2017. More specifically, officially recorded remittance flows to low- and middle-income countries reached $529 billion in 2018, reflecting a 9.6% increase over the previous high of $483 billion in 2017. Remittances are projected to rise further to $550 billion in 2019, becoming the leading source of external financing for these countries.
Regional and Country-wise Stats
The growth in remittance inflows varied from region to region. For instance, East Asia and the Pacific saw almost 7% growth, while South Asia witnessed a 12% surge, reaching $131 billion in 2018. This significant rise is attributed to the robust economy and employment situation in the United States and a revival in outward flows from certain Gulf Cooperation Council (GCC) countries and the Russian Federation.
Table of Remittances for Top Five Countries
| Country | Remittances in 2018 |
|---|---|
| India | $79 billion |
| China | $67 billion |
| Mexico | $36 billion |
| The Philippines | $34 billion |
| Egypt | $29 billion |
In the context of individual countries, India received the highest remittances, followed by China ($67 billion), Mexico ($36 billion), the Philippines ($34 billion), and Egypt ($29 billion). In the case of Pakistan, remittance growth was modest at 7%, due to a substantial decrease in inflows from Saudi Arabia, its main remittance source. Conversely, Bangladesh saw a strong upturn in remittances in 2018 (15%).
High Remittance Costs
Remitting money globally is not cheap. The global average cost of sending $200 hovered around 7% in Q1, 2019. Particularly for African regions and small Pacific islands, remittance costs frequently exceed 10%. With banks and post offices being the most expensive remittance channels, charging an average fee of 11% and over 7% respectively, the need to curtail remittance costs is apparent. The Sustainable Development Goal (SDG) 10.7 aims to bring down remittance costs to 3% by 2030.
About World Bank’s Migration and Development Brief
The Migration and Development Brief is prepared by the Development Economics (DEC) group, the primary research and data entity at the World Bank. It provides timely updates on important developments in the areas of migration, remittance flows, and related policies twice a year.
Understanding Remittances
Usually, remittances are financial or in-kind transfers made by migrants to their families or friends back in their country of origin. They consist chiefly of cash or in-kind personal transfers between resident and non-resident households, and income earned by workers employed in a foreign country for a temporary period. While remittances aid in stimulating economic growth in recipient countries, over-reliance on them can also become a concern.
