DUSHANBE, November 21, 2012, Asia-Plus — 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, according to a new World Bank brief on global migration and remittances.
The report notes 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, released on November 20.
However, despite the growth in remittance flows overall to developing countries, the continuing global economic crisis is dampening remittance flows to some regions, with Europe and Central Asia and Sub-Saharan Africa especially affected.
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), Kyrgyzstan (29 percent), Lesotho (27 percent), Moldova (23 percent), Nepal (22 percent), and Samoa (21 percent).
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.
Remittance flows to Europe and Central Asia are estimated at a virtually unchanged $41 billion, although the region is projected to make a robust recovery in remittance flows in 2013.
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.
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 Migration and Development Brief also notes that the promise of mobile remittances has yet to be fulfilled, despite the skyrocketing use of mobile telephones throughout the developing world. Mobile remittances fall in the regulatory void between financial and telecom regulations, with many central banks prohibiting non-bank entities to conduct financial services. Central banks and telecommunication authorities, thus, need to come together to craft rules relating to mobile remittances.
The Brief also discusses the implementation of the new remittance regulations in the United States and Europe and concludes that these regulations are likely to lower remittance costs in the long run by increasing competition and improving consumer protection.
