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June 15, 2017 | 13:30 | Dubai
Indians working across the globe sent home USD 62.7 billion last year, making India the top remittance-receiving country surpassing China, according to a UN report, ‘Sending Money Home’.
Over the past decade, remittances to Asia and the Pacific increased by 87 per cent, reaching US$244 billion, while migration grew by only 33 per cent in comparison. Asia remains the main remittance-receiving region, with 55 per cent of the global flows and 41 per cent of total migrants. Top receiving countries include India (US$63 billion), China (US$61 billion), the Philippines (US$30 billion) and Pakistan (US$20 billion). Reliance on remittances, as measured by percentage of GDP, is highest in Nepal (32 per cent), Tajikistan (29 per cent) and the Kyrgyz Republic (26 per cent). Reliance is high even for more populated countries such as the Philippines (10 per cent), Sri Lanka (9 per cent) and Bangladesh (8 per cent).
Until recently, remittances were literally accounted for in the errors and omissions columns of central banks and international financial institutions. While trade, investment and other forms of capital flows were all carefully recorded and reported, the mostly informal transfer of small amounts of money between migrant workers and their families back home went unnoticed – “hidden in plain sight.” But not anymore. Over the past decade, the scale and scope of remittances, which directly touch the lives of 1 billion people on earth, has become apparent, and with the notable exception of most sub-Saharan countries, is now becoming well documented. What still remains to be done is to leverage the impact of this global phenomenon by providing remittance families with more options to use their hard-earned money productively. Today, remittances “count,” and so do the people who send and receive them.
Trends in population, migration and remittances
Globally, over the period 2007-2016, the rate of remittance growth was greater than the rate of migration growth, which in turn was greater than the rate of population growth. Over this period, remittances increased by 51 per cent, while migration increased by 28 per cent and population in countries of origin increased by 13 per cent. Asia is the most dynamic region for both remittance flows and migration growth, while these trends were stable in Europe, reflecting a slight decline in population growth.
Asia is also the main remittance-receiving region, with the largest migrant population abroad. European receiving countries and Africa remain the most remittance-reliant economies, with remittances representing close to 3 per cent of their GDP. During the past decade, remittances grew at 4.2 per cent annually on average, notwithstanding significant slowdowns after the 2008 financial crisis and in 2015-2016 due to reduced oil revenues and currency fluctuations.
Source: International Fund for Agricultural Development (IFAD). IFAD is an international financial
institution and a specialized United Nations agency based in Rome – the UN’s food and agriculture hub.