A new World Bank report on global migration and remittances says remittance flows to the developing world are expected to exceed earlier estimates and total 406 billion dollars this year, an increase of 6.5 per cent over the previous year.
This was contained in a press release by the World Bank made available to the Ghana News Agency on Wednesday.
According to the World Bank's press statement remittances to developing countries are projected to grow by 7.9 per cent in 2013, 10.1 per cent in 2014 and 10.7 per cent in 2015 to reach 534 billion dollars in 2015.
It said worldwide remittances, including those to high-income countries, were expected to total 534 billion dollars in 2012, and projected to grow to 685 billion dollars in 2015.
The release, however, said despite the growth in remittance flows to developing countries, the continuing global economic crisis was dampening remittance flows to some regions, with Europe and Central Asia and Sub-Saharan Africa especially affected, while South Asia and the Middle East and North Africa (MENA) were expected to fare much better than previously estimated.
It stated that the top recipients of officially recorded remittances for 2012 were India (70 billion dollars), China (66 billion dollars), the Philippines and Mexico (24 billion dollars each), and Nigeria (21 billion dollars). Other large recipients include Egypt, Pakistan, Bangladesh, Vietnam, and Lebanon.
The statement said as a percentage of Gross Domestic Product, the top recipients of remittances in 2011, were Tajikistan (47 per cent), Liberia (31 per cent), Kyrgyz Republic (29 per cent), Lesotho (27 per cent), Moldova (23 per cent), Nepal (22 per cent), and Samoa (21 per cent).
The release cited Hans Timmer, Director of the Bank’s Development Prospects Group as saying: "Although migrant workers are, to a large extent, adversely affected by the slow growth in the global economy, remittance volumes have remained remarkably resilient, providing a vital lifeline to not only poor families but a steady and reliable source of foreign currency in many poor remittances recipient countries."
It said regions and countries with large numbers of migrants in oil exporting countries continued to see robust growth in inward remittance flows, compared with those whose migrant workers were largely concentrated in the advanced economies, especially Western Europe.
The Bank explained that South Asia, MENA and East Asia and the Pacific regions, with large numbers of workers in the Gulf Cooperation Council (GCC) countries, were seeing better-than-expected growth in remittances.
If further stated that for South Asia, remittances in 2012 were expected to total 109 billion dollars, an increase of 12.5 per cent over 2011; East Asia and Pacific region, were estimated to attract 114 billion dollars, an increase of 7.2 per cent over 2011; while MENA is expected to receive 47 billion dollars, an increase of 8.4 per cent over the previous year.
According to the statement, remittances to Latin America and the Caribbean were supported by a recovering economy and an improving labor market in the United States but moderated by a weak European economy.
It noted that the region would see a modest growth of 2.9 percent in 2012, totaling an estimated 64 billion dollars.
"In contrast, remittances are expected to remain flat to Europe and Central Asia and Sub-Saharan Africa regions, mainly because of the economic contractions in high-income European countries. Remittance flows to Europe and Central Asia are estimated at a virtually unchanged 41 billion dollars and 31 billion dollars to Sub-Saharan Africa this year, although both regions are projected to make a robust recovery in remittance flows in 2013," the World Bank said.
The release quoted Dilip Ratha, Manager of the Bank's Migration and Remittances Unit, and lead author of the Migration and Development Brief as saying: "Migrant workers are displaying tremendous resilience in the face of the continuing economic crisis in advanced countries. Their agility in finding alternate employment and cutting down on personal expenses has prevented large scale return to their home countries."
It said going forward, the Bank expected continued growth in remittance flows to all regions of the world, although persistent unemployment in Europe and hardening attitudes towards migrant workers in some places present serious downside risks.
It said another obstacle to growth of remittance flows was the high cost of sending money, which averaged 7.5 per cent in the third quarter of 2012 for the top 20 bilateral remittance corridors and 9 percent for all countries for which cost data are available.
"The average remittance cost for Sub-Saharan Africa was 12.4 per cent, the highest amongst all developing regions," the Bank added.
It stated that the Migration and Development Brief also indicated that the promise of mobile remittances had yet to be fulfilled, despite the skyrocketing use of mobile telephones throughout the developing world.
It said mobile remittances fall in the regulatory void between financial and telecom regulations, with many central banks prohibiting non-bank entities to conduct financial services.
It said Central banks and telecommunication authorities need to come together to craft rules relating to mobile remittances.
The release also said the report cited the implementation of the new remittance regulations in the United States and Europe and concluded that those regulations were likely to lower remittance costs in the long run by increasing competition and improving consumer protection.
"The global community has made progress in three out of four areas of the global remittances agenda – data, remittance costs, and leveraging remittances for capital market access for countries. Progress, however, has been slow in the area of linking remittances to financial access for the poor. There is great potential for developing remittance-linked micro-saving and micro-insurance schemes and for small and medium enterprise (SME) financing," it said.
The release stated that as a key player in the migration and remittances arena, the World Bank is working on a new initiative, the Global Knowledge Partnership on Migration and Development (KNOMAD), which aimed at facilitating multidisciplinary debate and discussion on migration issues, developing policy options, and assisting sending and receiving countries implement pilot policies.
It said the Bank also continued to make considerable strides in developing financing instruments for leveraging migration and remittances for national development purposes.
"Diaspora bonds can be a powerful financial instrument for mobilizing diaspora savings to finance specific public and private sector projects, as well as to help improve the debt profile of the destination country. The Bank has also set up a Diaspora Bond Task Force to provide technical assistance to countries interested in implementing diaspora bonds for financing development projects," the release stated.