More Remittances to Developing Countries in 2014

Fri, Apr 18, 2014

By publisher

4 MIN READ

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World Bank report predicts an increase in remittances to developing countries this year despite deportation of international migrants by their host countries

|  By Anayo Ezugwu  |  Apr. 28, 2014 @ 01:00 GMT

THE World Bank Group has predicted an increase of 7.8 percent in the bank’s remittances to developing countries in 2014. The bank said that the flow of remittances to developing countries will rise to $436 billion in 2014 from the 2013 volume of $404 billion. This forecast is contained in the bank’s latest issue of the Migration and Development brief released on April 12, on the bank’s website during the 2014 Spring Meetings held in Washington DC, United States.

The expected increase in flows to developing countries this year, according to the World Bank, would be maintained in the next few years despite deportations of international migrants from some host countries. Moreover, it said that remittances would rise to $516 billion in 2016. The report puts estimated global remittances, including those to high-income countries, at $581 billion in 2014 from $542 billion in 2013, adding that it might rise to $681 billion in 2016. For sub-Saharan Africa, flows grew by 3.5 percent in 2013 to reach $32 billion, with Nigeria accounting for about $21 billion or 65.6 percent of flows to the region. The flows to the region are forecast to rise to $41 billion in 2016.

The strong showing of Nigeria in the league of high remittance-recipient countries has encouraged its economic authorities to plan a Diaspora bond to mobilise savings and boost financing for development. The World Bank noted that remittances had increasingly become a key source of external resource flows for developing countries, far exceeding official development assistance from the advanced economies.

It equally maintained that remittances had become more stable than private debt and portfolio equity flows in recent times. “Remittances have become a major component of the balance of payments of nations. India led the chart in remittance flows, receiving $70 billion last year, followed by China with $60 billion, the Philippines with $25 billion, Mexico with $22 billion, and Nigeria with $21 billion. There is no doubt that these flows act as an antidote to poverty and promote prosperity. Remittances and migration data are also barometers of global peace and turmoil,” the report stated.

According to the report, “this is what is making the World Bank’s Global Knowledge Partnership on Migration and Development, KNOMAD, initiative organise, analyse and make available these data.” Dilip Ratha, manager, Migration and Remittances Team at the World Bank’s Development Prospects Group, noted that while the medium term outlook for remittances remained strong, downside risks loomed mainly from migrant’s return to their home countries as a result of conflict or deportation from host countries. The year 2013 saw the intensification of deportations, with more than 370,000 migrants sent back to their home countries from Saudi Arabia alone in five months since November 2013.

In the US, over 368,000 people, mostly migrants seeking entry into the country, were deported to their home countries in Latin America and the Caribbean, particularly Mexico, El Salvador, Guatemala and Honduras. However, remittance flows in 2013 were generally robust in all regions except Latin America and the Caribbean, the Middle East and North Africa. While the two largest remittance-recipient countries, Mexico and Egypt saw declines in remittance inflows due in part to removals and deportations from the US and Saudi Arabia, respectively.

India remained on the top spot, with $70 billion in remittances in 2013. Other large recipients were China ($60 billion), the Philippines ($25 billion), Mexico ($22 billion), Nigeria ($21 billion), Egypt figure was ($17 billion) Pakistan ($15 billion), Bangladesh ($14 billion), Vietnam ($11 billion), and Ukraine ($10 billion). In terms of remittances as share of GDP, the top recipients were Tajikistan (52 percent), Kyrgyz (31 percent), Nepal and Moldova (both 25 percent), Samia and Lesotho (both 23 percent), Armenia and Haiti (both 21 percent), Liberia (20 percent) and Kosovo (17 percent). “In addition to the large annual flows of remittances, migrants living in high income countries are estimated to hold savings in excess of $500 billion annually. These savings represent a huge pool of funds that developing countries can do much more to tap into,” Ratha said.