CAIRO: Developing countries are expected to receive over $350 billion in remittances this year, while high-income countries are expected to see inflows of $406 billion, according to the latest briefing on global migration and remittances by the World Bank.
Although the global economic slowdown has reduced the number of job opportunities for migrant workers, global remittances are expected to remain on a path of growth, the World Bank confirms. In fact, global remittances are predicted to reach $51 billion by 2014.
“Despite the global economic crisis that has impacted private capital flows, remittance flows to developing countries have remained resilient, posting an estimated growth of 8 percent in 2011,” said Hans Timmer, director of the bank’s Development Prospects Group.
“Remittance flows to all developing regions have grown this year, for the first time since the financial crisis.”
Overall, remittance flows to four out of the six World Bank-designated developing regions grew faster than expected.
The numbers rose 11 percent to Eastern Europe and Central Asia, 10.1 percent to South Asia, 7.6 percent to East Asia and Pacific, and 7.4 percent to Sub-Saharan Africa, despite difficult economic situations in European destinations for African migrants.
However, growth has slowed in remittance flows to Latin America and the Caribbean at 7 percent, due to continuing weaknesses in the US economy.
The Middle East and North Africa (MENA) region witnessed the slowest growth at 2.6 percent as a result of the social and political unrest hitting the region in the wake of the Arab uprisings.
In the coming years, the bank foresees continued growth in remittance flows increasing by 7.3 percent in 2012, 7.9 percent in 2013 and 8.4 percent in 2014.
Furthermore, according to data collected by the World Bank, Egypt, Lebanon, Pakistan, Nigeria, and Bangladesh are among the world’s largest migrant remittance recipients.
Egypt and Lebanon will each collect $8 billion in remittances this year; while Pakistan and Bangladesh each expect $12 billion and Nigeria, $11 billion.
Topping the lists, however, is India, which expects $58 billion this year, while China comes in second with an expected $57 billion, Mexico $24 billion and the Philippines $23 billion.
The top 10 countries that receive migrant remittances as a share of their GDP are Tajikstan, Lesotho, Samoa, Moldova, Kyrgyz Republic, Nepal, Tonga, Lebanon, Kosovo and El Salvador.
In Tajikstan, migrant remittances make up as much as 31 percent of GDP, while for Lesotho it makes up to 29 percent, Samoa 25 percent and Moldova 23 percent.
“The distribution of emigrants across the destination countries and the economic and employment prospects for migrants in these destinations influence remittance flows to developing countries,” the World Bank report pointed out.
The report observed several trends, noting that, for example, the US is “by far the largest source of remittances for developing countries in the Latin America region, with Western Europe, primarily Spain, coming a distant second.”
Asia, on the other hand, had a more diversified relationship with migration destinations and remittances sources, showing that a significant share of South Asia’s remittances comes from the six GCC countries.
“High oil prices have helped provide a cushion for remittances to Central Asia from Russia and to South and East Asia from the Gulf Cooperation Council (GCC) countries,” a statement released by the bank stated.
“Also, a depreciation of currencies of some large migrant-exporting countries, including Mexico, India and Bangladesh, created additional incentives for remittances as goods and services in these countries became cheaper in US dollar terms.”
Data also showed that while Western European migrant destinations are the main source of remittances for the Europe and Central Asia region, about a third of the region’s remittances came from developing countries such as Russia, for example.
However, the bank’s outlook for international remittance and migrant flows has a serious “downside.”
“Persistent unemployment in Europe and the US is affecting employment prospects of existing migrants and hardening political attitudes toward new immigration,” the bank’s statement read. “Volatile exchange rates and uncertainty about the direction of oil prices also present further risks to the outlook for remittances.”
As a result, the bank pointed out that some of the GCC countries, which are heavily reliant on migrant workers, are expected to enforce tighter quotes and restrictions in order to protect jobs of their own citizens.
“Remittance flows would receive a further boost if the global development community achieves the agreed objective of reducing global average remittance costs by 5 percentage points in five years,” the bank stated.
