NEW DELHI: Migrants from developing countries sent $404 billion in remittances to their home countries last year, according to the World Bank (WB). India led the list with $70 billion, followed by China at $60 billion and the Philippines, $25 billion.
In its Migration and Development Brief, the World Bank expects this year’s remittance flow to developing countries to increase by 7.8 percent to $436 billion, and to $526 billion in 2016 despite more deportations from some host countries.
Global remittances, including those to high-income countries, are estimated at $581 billion this year from $542 billion in 2013. This is seen rising to $681 billion in 2016.
Remittances remain a key source of external resource flows for developing countries, far exceeding official development assistance and more stable than private debt and portfolio equity flows, the bank said.
For many developing countries, remittances are an important source of foreign exchange, surpassing earnings from major exports, and covering a substantial portion of imports.
For example, in Nepal, 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 percent and 38 percent, respectively.
In India, remittances last year were $70 billion, more than what the country earned from its flagship software services exports while in Uganda, remittances are double the country’s income from its main export of coffee, the bank said.
“Remittances have become a major component of the balance of payments of nations. India led the chart of remittance flows, receiving $70 billion last year, followed by China with $60 billion and the Philippines with $25 billion,” World Bank Senior Vice President and Chief Economist Kaushik Basu said.
There was no doubt that these flows act as an antidote to poverty and promote prosperity, he said.
Other large recipients were Mexico ($22 billion), Nigeria ($21 billion), Egypt ($ 17 billion), Pakistan ($15 billion), Bangladesh ($14 billion), Vietnam ($11 billion) and Ukraine ($10 billion).
In terms of remittances as a share of gross domestic product, the top recipients were Tajikistan (52 percent), Kyrgyz Republic (31 percent), Nepal and Moldova (both 25 percent), Samoa and Lesotho (both 23 percent), Armenia and Haiti (both 21 percent), Liberia (20 percent) and Kosovo (17 percent).
The bank noted 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.