Indians working across the globe sent home $62.7 billion last year, making India the top remittance-receiving country, surpassing China, according to a UN report, writes Yoshita Singh.
The ‘One Family at a Time’ study by the UN International Fund for Agricultural Development (IFAD) said about 200 million migrants globally sent more than $445 billion in 2016 as remittances to their families, helping to lift millions out of poverty.
Remittance flows have grown over the last decade at a rate averaging 4.2 percent annually, from $296 billion in 2007 to $445 billion in 2016.
The study is the first-ever of a 10-year trend in migration and remittance flows over the period 2007-2016. It said 80 percent of remittances are received by 23 countries, led by India, China, the Philippines, Mexico and Pakistan.
The top 10 sending countries account for almost half of annual flows, led by the U.S., Saudi Arabia and Russia.
The study said India was the top receiving country for remittances in 2016 at $62.7 billion, followed by China ($61 billion), the Philippines ($30 billion) and Pakistan ($20 billion).
In the decade between 2007 and 2016, India surpassed China to become the top receiving country for remittances. In 2007, India was on the second spot, behind China, with $37.2 billion in remittances as compared to $38.4 billion for China.
The study said Asia is the highest originating region with 77 million migrants; with 48 million remaining within the region. Over the past decade, remittances to Asia and the Pacific increased by 87 percent, reaching $244 billion, while migration grew by only 33 percent in comparison.
Asia remains the main remittance-receiving region, with 55 percent of the global flows and 41 percent of total migrants. It is projected that an estimated $6.5 trillion in remittances will be sent to low and middle-income countries between 2015 and 2030.
The study added that the amount of money migrants send to their families in developing countries has risen by 51 percent over the past decade – far greater than the 28 percent increase in migration from these countries.
This dramatic increase in the amount of money migrants send home to their families in developing countries is helping to lift millions out of poverty and in attaining the Sustainable Development Goals (SDG), the study said.
“About 40 percent of remittances $200 billion are sent to rural areas where the majority of poor people live,” said Pedro de Vasconcelos, manager of IFAD’s Financing Facility for Remittances and lead author of the report, adding that the money is spent on food, health care, better educational opportunities and improved housing and sanitation.
“Remittances are therefore critical to help developing countries achieve the Sustainable Development Goals (SDG),” de Vasconcelos said.
Currently, about 200 million migrant workers support some 800 million family members globally. In 2017, an expected one-in-seven people globally will be involved in either sending or receiving the more than $450 billion in remittances, according to the report.
Migration flows and remittances are having large-scale impacts on the global economy and political landscape. Total migrant earnings are estimated at $3 trillion annually, approximately 85 percent of which remains in the host countries.
The money sent home averages less than one per cent of their host’s GDP. Taken together, these individual remittances account for more than three times the combined official development assistance (ODA) from all sources, and more than the total foreign direct investment to almost every low-and middle-income country.
The report makes several recommendations for improving public policies and outlines proposals for partnerships with the private sector to reduce costs and create opportunities for migrants and their families to use their money more productively.
“As populations in developed countries continue to age, the demand for migrant labor is expected to keep growing in the coming years,” de Vasconcelos said.
“However, remittances can help the families of migrants build a more secure future, making migration for young people more of a choice than a necessity,” he added.
Despite the decade-long trend, IFAD President Gilbert Houngbo noted the impact of remittances must first be viewed one family at a time.
“It is not about the money being sent home, it is about the impact on people’s lives. The small amounts of $200 or $300 that each migrant sends home make up about 60 percent of the family’s household income, and this makes an enormous difference in their lives and the communities in which they live,” Houngbo said.