DUSHANBE, February 2, 2009, Asia-Plus — In a reported released on January 29, the World Bank lead economist Dilip Ratha said that notwithstanding the global economic slump, developing economies are expected to witness steady flow of remittance this year, even as private flows are expected to fall by 40-50 per cent,
Remittance flows to developing countries are expected to remain resilient compared to private flows which are expected to fall by 40-50 percent in 2009,” Ratha said in a blog posting on the World Bank website.
Although new flow of migrants are falling, remittances are persistent over time. As per the latest World Bank data, the migrant stocks are not getting affected.
“Remittances are sent by cumulated flows of migrants over the years, not only by the new migrants of the last year or two,” the World Bank said.
Besides, in the past, migrant flows have represented “some two per cent of migrant stocks in the United States, four per cent in the EU15 countries and about five per cent in Gulf Cooperation Council countries,” the World Bank added.
Elaborating further Ratha said remittances are a small part of migrants” incomes, and migrants typically continue to send remittances when hit by income shocks drawing down their savings, working longer hours, and even cutting into consumption in order to send remittances.
Besides, due to increasing anti-immigration sentiments and tighter border controls, especially in the US and Europe, the duration of migration appears to have increased and in that case they would continue to send remittances, Ratha added.
We will recall that an article entitled “Outlook fro Remittances Flows 2008-2010” authored by Dilip Ratha, Sanket Mohapatra and Zhinei Xu (November 2008) noted that after several years of strong growth, remittance flows to developing countries began to slow down in the third quarter of 2008. This slowdown is expected to deepen further in 2009 in response to the global financial crisis. Officially recorded remittance flows to developing countries are estimated to reach $283 million in 2008, up 6.7 percent from $265 billion in 2007; but in real terms, remittances are expected to fall from 2 percent of GDP in 2007 to 1.8 percent in 2008. In 2009, remittances are expected to fall by 0.9 percent (or at the worst case, no more than 6 percent).
Remittance flows to Tajikistan, Moldova and Kyrgyzstan are expected to decline in 2009-2010; however these flows will remain positive as the remittance source countries in the region are expected to experience a more modest slowdown compared to the United States and Europe
