World Bank says remittances to developing countries to hit over $400b in 2012
The World Bank says developing countries will receive more than $400 billion in remittances this year, 2012.
The Bank said this in a press release citing a new Brief on Global Migration and Remittances.
According to the Bank, remittance flows to the developing world are expected to exceed earlier estimates and total $406 billion this year, an increase of 6.5 percent over the previous year.
It indicated that remittances to developing countries are projected to grow by 7.9 percent in 2013, 10.1 percent in 2014 and 10.7 percent in 2015 to reach $534 billion in 2015.
Worldwide remittances, including those to high-income countries, are expected to total $534 billion in 2012, and projected to grow to $685 billion in 2015, according to the latest issue of the Bank’s Migration and Development Brief.
The Brief noted that the top recipients of officially recorded remittances for 2012 are India ($70 billion), China ($66 billion), the Philippines and Mexico ($24 billion each), and Nigeria ($21 billion). Other large recipients include Egypt, Pakistan, Bangladesh, Vietnam, and Lebanon.
As a percentage of GDP, the top recipients of remittances, in 2011, were Tajikistan (47 percent), Liberia (31 percent), Kyrgyz Republic (29 percent), Lesotho (27 percent), Moldova (23 percent), Nepal (22 percent), and Samoa (21 percent), it said.
Despite the growth in remittance flows overall to developing countries, however, the Bank said the continuing global economic crisis is dampening remittance flows to some regions, with Europe and Central Asia and sub-Saharan Africa especially affected, while South Asia and the Middle East and North Africa (MENA) are expected to fare much better than previously estimated.
According to the Brief, regions and countries with large numbers of migrants in oil exporting countries continue to see robust growth in inward remittance flows, compared with those whose migrant workers are largely concentrated in the advanced economies, especially Western Europe.
Thus, South Asia, MENA and East Asia and Pacific regions, with large numbers of workers in the Gulf Cooperation Council (GCC) countries, are seeing better-than-expected growth in remittances, it said.
The Brief indicated that for South Asia, remittances in 2012 are expected to total $109 billion, an increase of 12.5 percent over 2011; East Asia and Pacific region, is estimated to attract $114 billion, an increase of 7.2 percent over 2011; while MENA is expected to receive $47 billion, an increase of 8.4 percent over the previous year.
Remittances to Latin America and the Caribbean are supported by a recovering economy and an improving labor market in the United States but moderated by a weak European economy. The region will, thus, see a modest growth of 2.9 percent in 2012, totaling an estimated $64 billion, it added.
In contrast, however, it noted that remittances are expected to remain flat to Europe and Central Asia and sub-Saharan Africa regions, mainly because of the economic contractions in high-income European countries. Remittance flows to Europe and Central Asia are estimated at a virtually unchanged $41 billion and $31 billion to sub-Saharan Africa this year, although both regions are projected to make a robust recovery in remittance flows in 2013.
Commenting, Dilip Ratha, Manager of the Bank’s Migration and Remittances Unit and lead author of the Migration and Development Brief, said migrant workers are displaying tremendous resilience in the face of the continuing economic crisis in advanced countries.
“Their agility in finding alternate employment and cutting down on personal expenses has prevented large scale return to their home countries.
Going forward, the Bank expects continued growth in remittance flows to all regions of the world, although persistent unemployment in Europe and hardening attitudes towards migrant workers in some places present serious downside risks,” he said.
The Brief identified the high cost of sending money as an obstacle.
Another obstacle to growth of remittance flows is the high cost of sending money, which averaged 7.5 percent in the third quarter of 2012 for the top 20 bilateral remittance corridors and 9 percent for all countries for which cost data are available. The average remittance cost for sub-Saharan Africa was 12.4 percent, the highest amongst all developing regions, it said.
By Emmanuel K. Dogbevi