WB: India remains top in remittances in 2013

During 2013, remittance flows were generally robust in all regions except LAC, and the Middle East and North Africa (MENA), where 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. However, both countries retained their rankings in the top 10 remittance-receiving countries globally, according to the World Bank’s latest issue of the Migration and Development Brief.

India remained in 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 ($17 billion), Pakistan ($15 billion), Bangladesh ($14 billion), Vietnam ($11 billion) and Ukraine ($10 billion).

In terms of remittances as a share of GDP, the top recipients were Tajikistan (52 percent), Kyrgyz Republic (31 percent), Nepal and Moldova (both 25 percent), Samoa 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,” said DilipRatha, Manager of the Migration and Remittances Team at the Bank’s Development Prospects Group.

Nigeria is readying a diaspora bond issue to mobilize diaspora savings and boost financing for development.

Continued efforts are required to lower the cost of sending money through official channels, although inroads are being made. During the first quarter, the global average cost for sending money fell to 8.4 percent of the transaction value, compared with 9.1 percent a year earlier. However, the average cost of remittances to Sub-Saharan Africa has remained stubbornly high at around 12 percent. Also, South-South remittances, which are on the rise, are in many cases either not permitted or very costly due to outward exchange controls in many developing countries, such as Gambia, Ghana and Venezuela.

The closure of bank accounts of money transfer operators serving Somalia and other fragile countries is also worrying, notes the brief. Remittances provide a lifeline to ‘fragile and conflict-affected situations’ where they are more than 5 times larger than foreign aid, foreign direct investment and other sources of international finance. More needs to be done to ensure that anti-money laundering and combating the financing of terrorism (AML/CFT) regulations do not unduly undermine development objectives and harm the poor.

“As development experts debate the post-2015 agenda, they also need to turn their attention to reducing the high cost of migration, particularly exorbitant fees paid by low-skilled workers to recruitment agents to secure jobs overseas,” said Ratha.

Recognizing the close links between migration and development, the World Bank Group is deepening its engagement on the issue. Central to its involvement is its leading role in establishing and advancing the Global Knowledge Partnership on Migration and Development (KNOMAD) program, which is envisaged as a hub of knowledge and policy expertise on migration. KNOMAD’s work program is undertaken through 12 thematic working groups: data; skilled labor; low-skilled labor; integration issues in host communities; policy and institutional coherence; security; migrant rights and social aspects of migration; demography; remittances; diaspora resources; environmental change; and internal migration. It also covers four cross cutting themes: gender, monitoring and evaluation, capacity building, and public perceptions.