These countries are the world’s biggest remittance recipients, data collected by the World Bank reveals.
Remittances are quickly rising as the largest source of external financing in developing countries, according to the World Bank’s report published in 2019.
Leading the way is India, accounting for $78.6 billion of the remittances received in 2018, the period from which the data for the 2019 report was collected.
Other countries in the lead are China ($67.4 billion), Mexico ($35.7 billion), the Philippines ($33.8 billion), and Egypt ($28.9 billion).
Regionally, the largest share of remittances came from the East Asia and Pacific, with $143 billion of the total recorded to have been received in the region. South Asia also took a huge share of the 2018 total at a massive $131 billion.
An incredible growth in remittances has been recorded in Europe and Central Asia in recent years. For 2018, it registered an 11 percent growth. This succeeds the massive 22 percent growth in 2017. The World Bank said that this quick growth is driven by outbound remittances from countries like the U.S., Spain, Russia, and Poland.
For 2018, global remittances reached a record-breaking $689 billion, a significant improvement from the $633 billion from the previous year.
A huge chunk of the global remittances were received by low- and middle-income countries, accounting for roughly 77 percent of the total in 2018.
The World Bank said that this growth can be attributed to the stronger economy and employment in the U.S. along with the outward flows in some Gulf Cooperation Council (GCC) countries and Russian Federation bouncing back for 2018.
They also expect that remittance flows among low- and middle-countries will rise as the largest source of external financing for the years to come.
Under the Sustainable Development Goal (SDG) 10.7, which is to ‘facilitate orderly, safe, and responsible migration and mobility of people, including through implementation of planned and well-managed migration policies,” the global target by the end of this decade is to bring down remittance costs by three percent.
Right now, commonly used channels like banks (11% average fee) and post offices (7% average free) continue to have large remittance fees. Such large fees are hurdles in ensuring a smooth migration for the people.
Globally, the average cost of sending $200 is also high, at around seven percent for QI 2019. This can go as high as 10 percent for countries in Africa and the Pacific.
In order to support the growth in remittances, Dilip Ratha, lead author of the World Bank’s latest Migration and Development Brief, recommended the renegotiation of exclusive partnerships with money transfer operators and increasing competition by allowing new players to operate through national remittance channels. These steps, according to him, will help bring down remittance costs.
Another key driver of growth mentioned by the World Bank is the reduction of recruitment costs for migrant workers.
“Millions of low-skilled migrant workers are vulnerable to recruitment malpractices, including exorbitant recruitment costs. We need to boost efforts to create jobs in developing countries and to monitor and reduce recruitment costs paid by these workers,” according to Michal Rutkowski, Senior Director of the Social Protection and Jobs Global Practice at the World Bank.