April 12, 2014
WASHINGTON: India received foreign exchange remittances worth $70 billion in 2013 from its migratory workforce to retain the top spot in the world amid a broad slowdown caused by regulatory hindrances on both movement of people and capital.
April 12, 2014
WASHINGTON: India received foreign exchange remittances worth $70 billion in 2013 from its migratory workforce to retain the top spot in the world amid a broad slowdown caused by regulatory hindrances on both movement of people and capital.
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), rounded up the Top10 remittance recipient nations, according to a World Bank report released on Friday.
The report, an annual World Bank exercise that underscores the point that remittances are an important source of foreign exchange often surpassing earnings from major exports, said India's $70 billion in remittance receipts in 2013 was "more than the $65 billion earned from the country's flagship software services exports." Such trajectory was even greater in countries such as Nepal, where remittances are nearly double the country's revenues from exports of goods and services, while in Sri Lanka and the Philippines, they are over 50% and 38%, respectively. In Uganda, remittances are double the country's income from its main export of coffee.
In terms of remittances as a share of GDP, the top recipients were Tajikistan (52%), Kyrgyz Republic (31%), Nepal and Moldova (both 25%), Samoa and Lesotho (both 23%), Armenia and Haiti (both 21%), Liberia (20%) and Kosovo (17%).
Authors of the report said recipient countries could do much more to enhance remittances while obliquely criticizing the roadblocks in terms of high costs and increased restrictions on movement of people, including a surge in deportations.
"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 Dilip Ratha, Manager of the Migration and Remittances Team at the Bank's Development Prospects Group, and an authority on remittances. The report also noted that Nigeria is readying a diaspora bond issue to mobilize diaspora savings and boost financing for development.
On its part, the World Bank has launched what it called a KNOMAD (Knowledge Partnership on Migration and Development) initiative to organize, analyze, and make available remittance data given its growing importance to nation economies. "Remittances have become a major component of the balance of payments of nations. 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 and this is what makes World Bank's KNOMAD initiative so important," said Kaushik Basu, Senior Vice President and Chief Economist of the World Bank.
According to the WB report, growth in remittances to the South Asia region has slowed, rising by a modest 2.3 percent to $111 billion in 2013, compared with an average annual increase of more than 13% during the previous three years. The slowdown was driven by a marginal increase in India of 1.7% in 2013, and a decline in Bangladesh of 2.4%. The depreciation of the Indian rupee during 2013 appears to have attracted inflows through a surge in the deposits of non-resident Indians rather than remittances.
The brief notes that while the medium term outlook for remittances is strong, downside risks loom mainly from migrants' return to their home countries as a result of conflict or deportation from host countries. Last year saw an intensification of deportations, with more than 370,000 migrants sent back to their home countries from Saudi Arabia alone in the five months since November 2013.
Courtesy: TNN
