India tops the remittance recipient chart again
According to the World Bank's 'Migration and Development Brief', India continues to remain the largest recipient of remittances in the world. In 2015, India received $69 billion in remittances, a billion less than the $70 billion received by it in 2014. Global remittances to developing countries rose by 0.4% to $431.6 billion from $430 billion in 2014, the slowest since the 2008 financial crisis.
What are remittances?
Remittances are the funds transferred by immigrants to their home country. For developing countries, remittances form an important component of the nation's foreign exchange earnings.
Global trend of remittances
The major remittance receiving nations include India ($69 billion), China ($64 billion), Philippines ($28 billion), Mexico ($25 billion) and Nigeria ($21 billion). These nations accounted for about half of the global remittance to the developing nations. In South Asia, while the remittance growth rate slowed for Pakistan, Bangladesh, and Sri Lanka, it increased for Nepal. The remittances contracted by 20% for Central Asia.
How are remittances helpful?
According to Augusto Lopez-Claros, Director of the World Bank's Global Indicators Group, "Remittances are an important and fairly stable source of income for millions of families and of foreign exchange to many developing countries". A slowdown in remittances in Central Asian nations may impact nutrition, access to education and healthcare for poor families. Remittances also contribute significantly in coping with natural disasters.
Reasons for decrease in remittances to India
Remittances from oil exporting sources such as Russia and West Asia have slowed down due to falling oil prices. This has affected remittances to various countries including India.
Remittances expected to rise in 2016
Global remittances including those to developed nations contracted by 1.7% from $592 billion in 2014 to $581.6 billion in 2015. The report is hopeful that the remittances have bottomed out in 2015 and will recover in 2016. The cost of sending remittances has declined by 0.6% to 7.4% in 2015 vis-a-vis 2014. However, the cost remains highest for Sub-Saharan Africa at 9.5%.
