January 2011, Volume 18, Number 1
WB: Remittances Up
The World Bank estimated that migrants sent $325 billion to developing countries in 2010, up from $307 billion in 2009. India received $55 billion in remittances in 2010; China $51 billion; Mexico $23 billion; and the Philippines, $21 billion; Bangladesh was the fifth largest developing country recipient with $11 billion.
The World Bank projects rising remittances to developing countries, $346 billion in 2011 and $374 billion in 2012.
Remittances did not fall as much as expected in 2008-09 because net migration from developing to industrial countries remained positive. Most migrants in industrial countries remained there. Further, migrants abroad reduced their living costs in order to maintain remittance payments. Thus remittances did not fall as much as expected. Migrants employed in Gulf countries such as Saudi Arabia continued to remit despite the recession.
Sub-Saharan African countries, among those least affected by the 2008-09 global recession, received an estimated $22 billion in remittances in 2010. Data for individual African countries are not fully reliable, and there are often major discrepancies between IMF remittance estimates and central bank reports. For example, the IMF estimated $125 million in remittances to Ghana in 2008, while the Ghana central bank estimated $1.6 billion.
Some governments with budget deficits and disaporas are issuing diaspora bonds, hoping to attract money from nationals abroad even when other lenders are reluctant to lend. Governments issuing diaspora bonds can provide tax and other breaks to citizens abroad who invest, including lower passport renewal fees. Other countries, including El Salvador, have been able to borrow money at lower cost by assuring lenders that sufficient remittances will arrive to repay the loan.
Mobile telephones and the internet are reducing the cost of sending small sums over national borders. The World Bank estimated that the cost of sending $200 internationally fell from $19.60 in 2008 to $17.40 in 2010. The US-Mexican remittance corridor is one of the cheapest, while sending small sums over national borders is much more expensive in Sub-Saharan Africa and between New Zealand and Pacific Islands.
Many poor Africans make remittance transfers within countries by transferring minutes of calling time to the recipient. Some mobile phone operators are trying to develop minute-transfer programs that can be used by migrants in one country to send calling time to recipients in other countries.