India leading recipient of Middle East remittances

India is the leading recipient of remittances from the Middle East, contributing to the $52 billion (Dh190.8 billion) the South Asian country received in 2008.

A study conducted by the Migration and Remittances Team at the World Bank said the top-ten recipients of remittances among developing countries are India, China, Mexico, the Philippines, Poland, Nigeria, Romania, Egypt, Bangladesh and Vietnam. These countries represent nearly 60 per cent of the $328 billion remitted to developing countries in 2008.

The flow to the developing countries is expected to decline by 7.3 per cent this year to $304 billion before an expected recovery  next year. According to the World Bank study, Europe and Central Asia are expected to suffer a 15 per cent decline, the largest this year among developing regions.

 

Remittances to the Middle East and North Africa are also expected to decline by 6 per cent, followed by South Asia at 4 per cent. The decline is intensified by the global financial crisis, unpredictable movements in exchange rates, and tightened immigration controls in worker-destination countries.

Many major destinations like the United States, United Kingdom, Australia, Malaysia and Russia have recently reduced the annual quotas or imposed tougher standards for immigrant workers.

"Remittances provide a lifeline to many poor countries. Although they remain resilient, even a small decline of 7 or 10 per cent can pose significant hardships to the people and to governments, especially those facing external financing gaps," said Dilip Ratha, Lead Economist in the Development Prospects Group of the World Bank.

"Reducing remittance fees and developing innovative tools to leverage remittances for financial inclusion and capital market access should be a part of our response to the financial crisis," he added.