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Remittances: India tops the global chart

October 03, 2013 15:47 IST

Remittances: India tops the global chart

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Lalit K Jha in Washington

India has topped the global chart of remittances with a whopping $71 billion in remittances in 2013, just short of three times the foreign direct investment it received in 2012, according to a revised World Bank forecast.

Top recipients of officially recorded remittances for 2013 are India (with an estimated $71 billion), China ($60 billion), the Philippines ($26 billion), Mexico ($22 billion), Nigeria ($21 billion), and Egypt ($20 billion), the report issued on Wednesday said.

Other large recipients include Pakistan, Bangladesh, Vietnam and Ukraine.

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Image: Indians sit with their faces painted with the colours of the Indian national flag as they celebrate Holi in Bhopal.
Photographs: Raj Patidar/Reuters

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Remittances: India tops the global chart

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As a percentage of GDP, the top recipients of remittances, in 2012, were Tajikistan (48 per cent), Kyrgyz Republic (31 per cent), Lesotho and Nepal (25 per cent each) and Moldova (24 per cent).

"These latest estimates show the power of remittances," said Kaushik Basu, Senior Vice President and Chief Economist of the World Bank.

"For a country like Tajikistan they constitute half the gross domestic product. For Bangladesh remittances provide vital protection against poverty. In terms of volume, India, with $71 billion of remittances, tops the global chart.

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Image: Tourists stroll on The Great Wall lined with red umbrellas at Si Ma Tai, north of Beijing.
Photographs: Reuters

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Remittances: India tops the global chart

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“To put this in perspective, this is just short of three times the FDI it received in 2012," he said.

"Remittances act as a major counter-balance when capital flows weaken as happened in the wake of the US Fed announcing its intention to reign in its liquidity injection programme.

Also, when a nation's currency weakens, inward remittances rise and, as such, they act as an automatic stabiliser," Basu said.

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Image: A Filipino boy blows a horn made of cardboard to attract customers.
Photographs: Romeo Ranoco AVD/PN/Reuters

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Remittances: India tops the global chart

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According to World Bank estimates, India and China alone will represent nearly a third of total remittances to the developing world this year.

Remittance volumes to developing countries, as a whole, are projected to continue growing strongly over the medium term, averaging an annual growth rate of nine per cent to reach $540 billion in 2016.

Global remittances, including those to high-income countries, are estimated to touch $550 billion this year, and reach a record $707 billion by 2016, the Bank said.

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Image: Tajik women sell bread in a street market.
Photographs: Reuters

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Remittances to the developing world are expected to grow by 6.3 per cent this year to $414 billion and are projected to cross the half-trillion mark by 2016, the report said.

"Remittances are the most tangible and least controversial link between migration and development," said Dilip Ratha, Manager of the Migration and Remittances Team at the Bank's Development Prospects Group.


Image: A Vietnamese woman buys conical hats called 'non' from a sidewalk vendor in Hanoi.
Photographs: Reuters

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