Members of the development community have lauded the potential remittances could have on reducing poverty in developing countries. But a new World Bank report notes several barriers to the growth of remittance flows.
Among the challenges include the high cost of sending money overseas. Remittances to sub-Saharan Africa are expected to remain “virtually unchanged” this year, according to the report. This could be due to sub-Saharan Africa being the “most expensive region to send remittance to.” Remittance cost to the region in the third quarter of 2012 was at 12.4 percent of the transferred amount, the report notes.
The report also indicates that while many people in developing countries have access to mobile phones, the “promise of mobile remittances has yet to be fulfilled.” Only 20 percent of 130 mobile banking operators offered international remittance services as of early 2012.
Progress “has been slow in the area of linking remittances to financial access for the poor,” World Bank Migration and Remittances Unit Manager and lead author of the report Dilip Ratha said in a press release.
Despite these constraints, the report projects remittances to developing countries will grow in the next three years, reaching as much as $534 billion in 2015.
This and other trends in remittances and migration will form part of the discussions at the Global Forum on Migration and Development, which runs Nov. 21-22. The annual event is attended by policymakers, nongovernmental organizations and migration experts.
This year, participants of the forum, which will take place in Pailles, Mauritius, will focus on migrants’ contribution to development. Some of the speakers include U.N. Secretary-General Special Representative for Migration and Development Peter Sutherland, International Organization for Migration Director General William Lacy Swing, and Catherine Wiesner, U.S. deputy assistant secretary for population, refugees and migration.
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About the author
Jenny Lei Ravelo@JennyLeiRavelo
Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.