Remittances to low- and middle-income countries are estimated to have reached a staggering $466 billion in 2017, up from $429 billion in 2016, according to a new report by the World Bank and Knomad. As seen in Chart 1, the report estimates that such flows to these countries may well cross $500 billion by 2019.
The steady rise in such flows over the years has led to them dwarfing other kinds of flows. As seen in Chart 2, remittances are now almost three times the size of official development assistance (ODAs) given to low- and middle-income countries. Going by the current trend, these flows may well surpass foreign direct investment (FDI) in these countries in 2018.
As seen in Chart 3, the top remittance receiver in 2017 was India ($69 billion), followed by China ($64 billion), the Philippines ($33 billion), Mexico ($31 billion) and Nigeria ($22 billion). But as a percentage of GDP, the top remittance receivers in 2017 were the Kyrgyz Republic (35 per cent), Tonga (33 per cent), Tajikistan (31 per cent), Haiti (29 per cent) and Nepal (21 per cent) as shown in Chart 4.
Among the countries of origin of international migrants, India ranks first. It is followed by Mexico, Russia, China and Bangladesh (Chart 5). On the other hand, the United States continued to be the most preferred destination for international migrants, followed by Germany, Saudi Arabia, Russia and the United Kingdom (Chart 6).
While at the aggregate level, the cost of remitting money has dipped of late, it actually varies from migrant corridor to corridor. For example, as seen in Chart 7, the cost of remitting money from Singapore or Malaysia to India is significantly lower than the cost of remitting money from Thailand or Japan to India.
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Sources: Migration and Remittances — Recent Developments and Outlook, World Bank Group and KNOMAD, April 2018