Remittances are the monies that migrants return to the country of origin. If labor is considered an export, than remittances are that part of the payment for exporting labor services that returns to the country of origin.

Three streams of money flowing into countries are included in remittances, and published annually by the IMF in its Balance of Payments Statistics Yearbook:

worker remittances are the value of monetary transfers sent home from workers abroad more than one year,

compensation of employees (previously labor income) are the gross earnings of foreigners residing abroad for less than 12 months, including the value of in-kind benefits such as housing and payroll taxes

migrant transfers are the net worth of migrants who move from one country to another--the value of IBM stock owned by a migrant who moves from France to Germany gets transferred in international accounting from France to Germany.

Total remittances--the sum of workers remittances, compensation of employees, and migrants transfers--increased from less than $2 billion in 1970 to $70 billion in 1995. Growth in total remittances was erratic from year to year. Remittances doubled between 1974 and 1975, and continued rising sharply in the mid-1970s, as workers poured into Middle Eastern oil exporting nations. Total remittances were flat in the early 1980s, resumed their growth in the late 1980s, and then stablilized in the 1990s at $60 to $70 billion; remittances were $67 billion or more in 1990, 1994, and 1995.

Between 1970 and 1995, total remittances were almost $1 trillion. Almost two-thirds of total remittances over the past 15 years were worker remittances, 25 percent were compensation of employees, and almost 10 percent were migrant transfers. The worker remittances share of total remittances peaked in the early 1980s at over 70 percent.

It should be emphasized that remittance data are generally under reported, and that the IMF estimates the remittances accruing to countries that report late or do not report, so that published world and regional remittances are larger than those reported for individual countries. For example, worker remittance credits for Asia in the 1995 Yearbook are reported to be $11 billion, even though the sums for the listed countries total $3.3 billion, with no remittances listed for India and Pakistan.

The country receiving the most worker remittances--from those abroad more than 12 months-- in 1995 was Portugal, with $3.8 billion, followed by Mexico ($3.7 billion), Turkey ($3.3 billion), and Egypt ($3.2 billion). Egypt received the largest single year amount of workers' remittances--$6.1 billion in 1992.

Developing countries received $35 billion in workers remittances in 1995, up from $31 billion in 1994. Eight developing countries accounted for half of 1995 workers remittances--Mexico ($3.7 billion), Turkey ($3.3 billion), Egypt ($3.2 billion), Brazil ($2.9 billion), Morocco ($1.9 billion), Bangladesh ($1.2 billion), Yemen ($1.1 billion), and El Salvador ($1.1 billion). 1995 data for three countries that traditionally receive over $1 billion in remittances are missing, but Pakistan had $1.7 billion and Jordan $1.1 billion in remittances in 1994, and India $2.9 billion in 1992.

Five countries paid 80 percent of workers remittances in 1995--Saudi Arabia $16.6 billion, US $12.2 billion, Germany $5.3 billion, France $3.1 billion, and UK $2.7 billion. Kuwait paid $1.8 billion, and Oman $1.3 billion in workers remittances in 1995.

Compensation of employees--what the IMF termed labor income until 1995--are funds transferred to countries of origin by nationals who have been abroad less than 12 months. Compensation of employees was $25 billion in 1995, including $4.9 billion sent to the Philippines, $4.4 billion each to France and Germany, and $1.7 billion each to Thailand and Italy. Migrants transfers were $9.5 billion in 1995, with Russia receiving $2.3 billion, New Zealand $1.7 billion, Israel $1.4 billion, and Australia $1.3 billion--these four countries accounted for two-thirds of migrant transfers.

Since some labor-exporting countries report workers remittances, and others report compensation of employees, it may be better to examine total remittances. For example, Mexico reported $3.7 billion in workers' remittances in 1994, and $650 million in compensation of employees, while the Philippines reported $440 million in workers' remittances, and $3 billion in compensation of employees.

Total remittances show that France received more from residents abroad than any other country in 1994, largely because France received $3.7 billion in compensation of employees. The top five countries in total remittances--France, Mexico, Portugal, Egypt, and the Philippines--accounted for about one-third of total remittances in 1994, and the top 10--these five plus Greece, Turkey, Italy, Brazil, and Pakistan--accounted for almost half of total remittances. The US and the UK are in the IMF data base, but the US had $160 million in compensation of employees reported for 1995, the UK zero, and Germany $4.4 billion.

There are several other ways to examine remittances, including the ratio of remittances to merchandise exports, and remittances per capita. In 1994, island places such as Cape Verde were most likely to have remittances exceed exports--by 16 to 1 in Cape Verde--and remittances exceeded exports in the Dominican Republic. Total remittances per capita were highest in New Zealand, $411, followed by Portugal, $407, and St Kitts, $385.

Remittances are very important for many island economies, as well as for populous nations including Egypt, Bangladesh, and Pakistan. In 1994, total remittances were equivalent to more than 100 percent of merchandise exports for the Dominican Republic, over 75 percent of merchandise exports in Egypt, El Salvador, and Jordan, more than 50 percent of merchandise exports in Yemen and Greece, and 25 percent or more of merchandise exports in Bangladesh, the Philippines, and Pakistan. In Turkey and Mexico, total remittances were equivalent to 14 and 12 percent of merchandise exports in 1994.