Nigeria, developing nations to record 5% growth in remittances

The World Bank has hinted that remittances by international migrants from developing countries may grow by as much as 5 per cent in 2014 despite rising forced migration due to violence and conflict. It also hinted that the number of persons displaced globally due to conflicts rose to over 73 million during the year.

In its migration and development briefing at the ongoing annual meetings of the IMF and World Bank Group in Washington DC, USA, the bank said officially recorded remittances to developing countries are expected to reach $435 billion this year, an increase of 5 per cent over 2013, a growth rate that is substantially faster than the 3.4 per cent growth recorded in 2013, driven largely by remittances to Asia and Latin America.

This is even as it projects that remittances to developing countries will continue climbing in the medium term to reach an estimated $454 billion in 2015.

It also estimates that global remittances, including those to high-income countries would hit $582 billion this year and rise to $608 billion next year.

With $21 billion in remittances, according to the World Bank, Nigeria remains the highest beneficiary of the inflows from across the world even as observers believe that it should be higher this year.

According to the bank, such remittances remain an important and stable source of private inflows to developing countries, as they bring in large amounts of foreign currency that help sustain the balance of payments. In 2013, remittances were significantly higher than foreign direct investment (FDI) to developing countries (excluding China) and were three times larger than official development assistance.

The brief notes that the global average cost of sending remittances continued its downward trend in the third quarter of 2014, falling to 7.9 per cent of the value sent, compared to 8.9 per cent a year earlier although it admitted that the cost of sending money to Africa remains high, exceeding 11 per cent.

India, with the world’s largest emigrant stock of 14 million people, will remain in the top spot this year, attracting about $71 billion in remittances. Other large recipients are China ($64 billion), the Philippines ($28 billion), Mexico ($24 billion), Nigeria ($21 billion), Egypt ($18 billion), Pakistan ($17 billion), Bangladesh ($15 billion), Vietnam ($11 billion) and Ukraine ($9 billion).

As a share of GDP (2013), the top recipients of remittances were Tajikistan (42 per cent), Kyrgyz Republic (32 per cent), Nepal (29 per cent), Moldova (25 per cent), Lesotho and Samoa (24 per cent each), Armenia and Haiti (both 21 per cent), The Gambia (20 per cent) and Liberia (18 per cent).

In a special analysis on forced migration, the brief notes that forced migration due to conflict is at its highest level since World War II, affecting more than 51 million people. An additional 22 million people have been forced to move due to natural disasters, bringing the total affected by forced migration to at least 73 million, according to the latest available data.

“Despite the encouraging outlook for remittance flows, the circumstances of many migrants are troubling. With so many people on the move against their will and many others undertaking desperate and dangerous journeys, it is clear that more effort is needed to make migration safer and cheaper by exploring economically viable policy options,” said Dilip Ratha, Lead Economist, Migration and Remittances, at the World Bank’s Development Prospects Group and Head of the Global Knowledge Partnership on Migration and Development (KNOMAD).

Forced migration is typically viewed as a humanitarian issue that affects growth, employment and public spending for both origin and destination countries. The issue needs to be examined also through a development lens, says the brief. It is a major challenge in several regions.

Pakistan and Iran top the world list of refugee host countries, as millions of people from neighbouring Afghanistan remain displaced after more than 35 years of conflict. At the end of 2013, nine out of 10 refugees were being hosted in developing countries.

It noted, however, that the war in Syria has displaced half the country’s population, with three million refugees crossing borders and 6.5 million people displaced internally.

In sub-Saharan Africa, internal conflict (including renewed instability in South Sudan and Boko Haram activities in Nigeria) together with persistent drought in the Horn of Africa, are resulting in increased forced migration in the region.

Notwithstanding, it pointed out that growth in remittances to sub-Saharan Africa was picking up modestly this year.

Officially recorded remittances to developing countries are expected to reach $435 billion this year, an increase of 5 per cent over 2013. The growth rate this year is substantially faster than the 3.4 per cent growth recorded in 2013, driven largely by remittances to Asia and Latin America.

Remittances to developing countries will continue climbing in the medium term, reaching an estimated $454 billion in 2015.

Global remittances, including those to high-income countries, are estimated at $582 billion this year, rising to $608 billion next year.

“Remittances to developing countries grew this year by 5 per cent. Remittance inflows provided stable cover for substantial parts of the import bill for such countries as Egypt, Pakistan, Haiti, Honduras and Nepal. India and China lead the chart with projected remittance inflows of, respectively, $71 and $64 billion in 2014. In addition, India and the Philippines benefit from having migrants with the most diverse destination spread, thereby creating buffers against regional shocks. Given the growing importance of this sector, the World Bank’s Migration and Development Brief has become an essential tool for global development policy experts,” said Kaushik Basu, Senior Vice President and Chief Economist of the World Bank Group.

The brief notes that the global average cost of sending remittances continued its downward trend in the third quarter of 2014, falling to 7.9 percent of the value sent, compared to 8.9 percent a year earlier. However, the cost of sending money to Africa remains stubbornly high, exceeding 11 percent.

Remittance flows are expected to grow robustly to almost all regions of the developing world, except Europe and Central Asia, where the conflict in Ukraine and associated sanctions are contributing to an economic slowdown in Russia, home to a large number of migrants from the region. The East Asia and Pacific and South Asia regions will continue to attract the largest remittance flows.

India, with the world’s largest emigrant stock of 14 million people, will remain in the top spot this year, attracting about $71 billion in remittances. Other large recipients are China ($64 billion), the Philippines ($28 billion), Mexico ($24 billion), Nigeria ($21 billion), Egypt ($18 billion), Pakistan ($17 billion), Bangladesh ($15 billion), Vietnam ($11 billion) and Ukraine ($9 billion).

 

In a special analysis on forced migration, the brief notes that forced migration due to conflict is at its highest level since World War II, affecting more than 51 million people. An additional 22 million people have been forced to move due to natural disasters, bringing the total affected by forced migration to at least 73 million, according to the latest available data.

“Despite the encouraging outlook for remittance flows, the circumstances of many migrants are troubling. With so many people on the move against their will and many others undertaking desperate and dangerous journeys, it is clear that more effort is needed to make migration safer and cheaper by exploring economically viable policy options,” said Dilip Ratha, Lead Economist, Migration and Remittances, at the World Bank’s Development Prospects Group and Head of the Global Knowledge Partnership on Migration and Development (KNOMAD).

Forced migration is typically viewed as a humanitarian issue but affects growth, employment and public spending for both origin and destination countries. The issue needs to be examined also through a development lens, says the brief.

The war in Syria has displaced half the country’s population, with 3 million refugees crossing borders and 6.5 million people displaced internally. Most Syrian refugees have fled to neighboring Lebanon, Turkey and Jordan, joining millions of Iraqi and Palestinian refugees already there. In 2014, Syrians overtook Afghans as the second largest refugee group, outnumbered only by Palestinian refugees.

In Sub-Saharan Africa, internal conflict (including renewed instability in South Sudan and Boko Haram activities in Nigeria) together with persistent drought in the Horn of Africa, are resulting in increased forced migration in the region.

Source : SunOnline

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