India was the highest recipient of international remittances in 2018, receiving US$79 billion, said the World Bank in its latest report on global remittances. Over the last three years, India registered a significant flow of remittances from $62.7 billion in 2016 to $65.3 billion 2017.
The latest edition of the World Bank’s Migration and Development report shows that India was followed by China ($67 billion), Mexico ($36 billion), the Philippines ($34 billion), and Egypt ($29 billion).
The Bank noted that remittances to India in 2018 grew by more than 14 percent, probably due to increased financial help flowing in from migrants during the flooding disaster in Kerala, the state with the largest inflow of migrant remittances in India.
In Pakistan, remittance growth was moderate (7%), due to significant declines in inflows from Saudi Arabia, its largest remittance source. In Bangladesh, remittances showed a brisk uptick in 2018 (15%).
According to the report, remittances to low-and middle-income countries reached a record high of $529 billion in 2018, an increase of 9.6 percent over the previous record high of $483 billion in 2017.
Global remittances, which include flows to high-income countries, reached $689 billion in 2018, up from $633 billion in 2017, the global lender said in its report. The Bank said, remittances to South Asia grew by 12 percent to $131 billion in 2018, outpacing the 6 percent growth in 2017.
The upsurge in global remittance was driven by stronger economic conditions in the United States and a pick-up in oil prices, which had a positive impact on outward remittances from the six-nation Gulf Cooperation Council (GCC) bloc that includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.
However, the Bank rued that the global average cost of sending $200 remained high, at around 7 per cent in the first quarter of 2019. Reducing remittance costs to 3 percent by 2030 is a global target under United Nations’ Sustainable Development Goal (SDG). Remittance costs across many African corridors and small islands in the Pacific remain above 10 percent.
Remittances are on track to become the largest source of external financing in developing countries. The high cost of money transfers reduce the benefits of migration. Renegotiating exclusive partnerships and letting new players operate through national post offices, banks, and telecommunications companies will increase competition and lower remittance prices.