Last week, the U.N. General Assembly, in collaboration with the International Organization for Migration, held its Second High-Level Dialogue on International Migration and Development in New York. As expected, the highlight of the event was a strong call to the development community to step up efforts in harnessing the strategic role migrants can play in achieving development outcomes in their home countries.
A day before the event, the World Bank released a report on remittance flows. Notably, the report estimates money transfers to the developing world are expect to reach $414 billion this year and exceed half a trillion dollars by 2016. Remittances sent by migrants to their home countries have grown almost 30 percent from $303 billion in 2009 to $389 billion last year — more than three times higher than the $125.9 billion in projected net official development assistance for 2012.
For the eighth consecutive year, India and China are the top recipients of remittances worldwide. They also receive about one-third of remittances to the developing world, with 2013 money transfers expected to reach $131 billion combined.
Check out this Devex slideshow to see which developing countries are estimated to receive the highest amounts of officially recorded remittances this year.
The report notes that regional trends in remittance flows to the developing world are largely determined by the economic conditions of the migrants’ host countries. Latin America and the Caribbean, for example, are heavily dependent on the stability of the U.S. economy. Remittances to developing countries in Europe and Central Asia, whose migrants work mainly in oil-rich Russia, are sensitive to fluctuations in oil prices.
But despite the projected upward trend for remittances to the developing world, the cost of sending money to these countries remains at about 9 percent of the amount to be transferred. Analysts contend that high transfer fees limit financial gains that developing economies could enjoy from remittances. In a bid to maximize the benefits of remittances to development financing, G-20 leaders who met in Russia last month pledged to reduce remittance costs to 5 percent over the next five years.
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